Public sector redundancy plan to cost €440m
Updated: Tuesday, 22 Jan 2013 22:10
The Department of Public Expenditure and Reform has clarified that the cost of a planned targeted redundancy scheme for an extra 4,000 public employees will be €440m, and not €110m as stated earlier.
A spokesperson said that the cost of €110m given earlier is for every 1,000 jobs cut, and not for the total redundancy scheme.
The savings as a result of the cuts will be €200m a year.
The department reiterated that the scheme would pay for itself in two years on a gross basis, and three years on a net basis.
Government ministers have discussed plans for what would be the first targeted voluntary redundancy programme in the public sector.
Minister for Public Expenditure and Reform Brendan Howlin confirmed that the plans were on the agenda at today's Cabinet meeting.
He said certain areas and employees had already been identified as candidates for the scheme.
Under the Government's proposals, public service numbers would fall from 291,000 at present to 287,000 by the end of the year, and to 282,500 by the end of 2014.
The original target was to hit 282,500 by the end of 2015.
Mr Howlin said the first tranche of redundancies would target staff in the health, agriculture and education sectors who were surplus to requirements, and could not be redeployed.
"Where there are people who can't be deployed we can offer them a voluntary package to go," he said.
The scheme will focus on back-office and support areas, as well as management and administrative grades, rather than frontline services.
It is understood the Government expects natural retirements to achieve much of the reduction, but as some staff are being replaced in health and education, they will need a further 2,000 exits in 2013 and again in 2014.
Staff will receive a redundancy package of three weeks' per year of service plus statutory capped at two years' salary - or else half pay until retirement.
There will also be an early retirement element, though pension entitlements will be calculated on the basis of current salary, and not pay rates prior to the Government's imposed pay cut.
The Government stresses that there will be no automatic right to redundancy, with applications subject to ongoing business needs and service provision priorities.
Further staff surpluses are expected to arise over time as shared services are introduced in areas including human resources, finance and payroll.