CIVIL AND public servants should be offered a redundancy package, the Minister for Finance, Brian Lenihan, said last night.
Speaking during a debate on a Fine Gael private members' motion criticising the Government's record on the economy, the Minister said HSE administrative staff will be offered such a scheme and added: "I would like to see such a programme applied in the wider public service as well. The Government is determined to secure maximum value for money in our public services."
The Minister's statement is further evidence of the scale of the cutbacks being considered by the Government as it copes with falling tax revenues, and global uncertainty.
Last July, the Minister indicated that 5,000 job vacancies would have to be left unfilled in the effort to cut payroll costs by 3 per cent, along with overtime bans and other cost-saving measures.
At that time, he stated his preference for a redundancy package in the wider civil and public service, but his decision to repeat the message in the Dáil last night so close to the budget is a clear sign of intent.
The Government would be able to borrow the money under European Union rules, without breaching the EU growth and stability pact, if the cuts led to major reforms in the public system.
The Cabinet is set to discuss the issue when it meets in Government Buildings on Sunday, although any savings from a State redundancy scheme would not be felt for 18 months or more.
In addition, the experience of such schemes in the State sector in the past has not been good, with many of those who left with lump sums being rehired on contracts.
However, the Government has very limited room for manoeuvre if it fails to achieve significant wage savings, since wages consume 60 per cent of its budget.
Since 2002, the numbers of employees in the health service and education have risen by nearly 40 per cent, while local authorities now employ over one-fifth more in the same period.
Meanwhile, Taoiseach Brian Cowen has left the country to address the UN General Assembly, despite Fine Gael's unprecedented refusal to offer him a "pair" for this afternoon's vote on the Opposition's economic motion. A number of other Ministers have been forced to cancel or postpone international meetings.
However, the Government should easily win the vote, given its comfortable majority.
