Review of Public Service Allowances and Premium Payments
The Minister for Public Expenditure and Reform, Brendan Howlin, T.D. today (18th September 2012) published the outcome of the review of public service allowances and premium pay following consideration by Government.
The Minister has also published the business cases submitted to his Department by public sector management.
The Government decision taken today will impact on over half the annual €1.4bn cost of allowances, primarily for new beneficiaries.
The Minister noted that “over 1100 allowances have been notified to his Department, and over 800 business cases were submitted by Departments/Offices for retention of allowances, either in the current or modified format.
The Minister accepted that given the size of the review undertaken that the savings targets for 2012 would not be realised. This would not impact however, on the achievement of the pay bill budget for the year.
Changes in allowance regime
The Minister announced that arising from the review and the proposals he brought to Government the following changes will be made to the public service allowance regime:
a) The annual value in allowances that will not be paid to new beneficiaries is in the region of €475m. The Government has decided that there is no justification or underlying business case for the retention of these allowances.
b) A further range of allowances with an annual value of €245m will be subject to modification to the payment terms to ensure that the State is not over paying or over prolonging payment of such allowances. To allow this review to proceed, the Minister for Public Expenditure and Reform is agreeable, in some instances, to sanction continued payment of such allowances for a strictly time bound period,
c) In addition allowances currently payable to officials who travel outside of Ireland and the UK to represent Ireland at meetings of the EU or other international organisations, or who act as Chairpersons of EU committees (collectively known as Chairpersons and Delegates allowance) are being abolished both for new beneficiaries and existing staff,
The Minister indicated that, for allowances currently held by serving incumbents, sectoral management will begin, or in many cases, continue the process of engaging with Staff Representatives in order to establish the best way of modernising the pay structure and eliminating outdated arrangements, operating through the ambit of the Croke Park Agreement and the established industrial relations bodies.
Wider steps to reduce public sector paybill
The Government has consistently aimed to contain or reduce the pay-related costs of delivery of services. The aim is to reduce the total cost of the Exchequer pay bill by some €3.8 billon in the period from 2009 to 2015 or, to put it another way, a 20% sustainable fall in the cost of employing people to deliver public services by 2015.
The Minister commented that “reform of allowances and overtime is just one element of a sustained programme of cost reduction across the public service. Other measures that have already been put in place to contain or reduce costs include:
Ongoing reduction in Public Service numbers now expected to be 292,000 by end 2012, or 2,000 ahead of target.
Agreement was reached with ICTU earlier in 2012 for the application of a standardised annual leave system across the public service with reduced leave benefits for promotees and new entrants,
The required savings in overtime amounting to some €40m has already been effected by reduced allocations for 2012 and this means that overall expenditure on over time has been reduced by a total of €150m or 30% since 2010.
A recent binding Labour Court finding provides for increased working hours from March, 2013 in many parts of the Local Authority system.
o Appendix A lists indicative classes of allowances proposed to be abolished for new beneficiaries,
o Appendix B lists indicative classes of allowances proposed to be approved for new beneficiaries but subject to review and/or modification, and
o Appendix C lists classes of allowances proposed to be approved for new beneficiaries
Summary details of allowances reviewed
The information in this document has been compiled based on the material made available to the Department. Any gaps, inaccuracies or inconsistencies are reflective of the information returned.