Wednesday, 17 February 1988
Dáil Eireann Debate
Mr. Desmond: asked the Minister for Finance the number of persons in each Government Department and State agency who accepted voluntary redundancy in 1987; the average lump sum payment involved; the average severance payment; the average annual pension entitlement; and the number who have accepted voluntary redundancy in January 1988 to date and the Department or State agency involved.
Mr. Cullen: asked the Minister for Finance the total number of persons who have applied for the voluntary redundancy package in the public service, by agency and by Department; the total number of applications which have been refused; the total number of applications now pending; and the criteria which are being applied in deciding to accept or refuse applications.
Mr. Durkan: asked the Minister for Finance the total number of applications  received in response to the Government's early retirement-voluntary redundancy scheme; whether the number of applications received will in fact correspond with budgetary projections for same as outlined in the Programme for National Recovery; the total number of applications received in respect of each Government Department and/or subsidiary bodies thereof; the proportion of (a) outdoor staff and (b) administrative staff involved under each heading; and if he will make a statement on the matter.
Eligibility for the early retirement scheme was initially confined to persons working in areas where developments had made particular groups of staff surplus to the needs of the public service but was subsequently extended to the over-50s in most areas of the public service. Within these broad parameters it is a matter for local management in the first instance to determine how widely the terms of the scheme will be offered in particular organisations and the criteria to be applied in deciding whether or not to accept applications.
The approach adopted in any particular area of the public service will depend on the circumstances of that area including the financial allocation within which they must operate and whether they have staff surplus to requirements. In the case of the Civil Service for which I have direct responsibility, the terms of the scheme allow local management to refuse applications from persons serving in key positions in their organisations. In order to do so, however, they require the express approval of my Department.
(4) Whether an applicant in a situation where one of the above criteria applies has specialist or technical qualifications and/or experience for which it is not feasible to compensate by redeployment.
My Department are under instructions to facilitate applicants wherever possible. In pursuit of this policy, Departments wishing to refuse applications have, in many instances, been advised by my Department to defer doing so pending efforts to secure a replacement.
Information on the numbers and categories of applications received in the public service is not available in my Department. In relation to the number of people who have accepted the voluntary redundancy and early retirement terms, I am circulating a tabular statement showing the number of employees who have left under the scheme in 1987 and in 1988 to date, by sector, and the average costs involved for 1987. Briefly, 1,135 employees left the public service — including local authorities — in 1987 at an average total severance cost of £10,182. Figures are not yet available on average annual pension entitlements for all of the sectors involved. A further 1,611 employees have left in 1988 to date. As I indicated in my Budget Statement last month, the redundancy terms will continue to be available during 1988. Public Service Redundancies in 1987 and in 1988 to date.
|Sector||Number who left in 1987||Average retirement lump sum||Average redundancy payment||Average severance gratuity||Average short service gratuity||Average total cost||Average annual pension||Number who have left in 1988 to date|
|Non-Industrial Civil Service||40||14,919||242||895||97||16,152||5,384||263|
|Industrial Civil Service||45||3,266||2,154||1,185||488||7,093||n.a.||55|
|Health Agencies & Local Authorities||888||5,693||534||1,437||1,341||9,005||n.a.||936|
|Non-Commercial State Bodies||162||14,392||325||808||499||16,024||4,500||357|
Note: The 1987 data record average payments made in respect of officers accepting voluntary redundancy in 1987 in each of these sectors. Not all of these payments, which are made in the first instance by the employing organisations, would have been recouped from the Vote for Public Service Early Retirement Payments in 1987.
Mr. Desmond: Will the Minister agree that before a major policy decision of that nature was taken involving not less than £10 million last year and between £80 million and £100 million this year, the effect of such a strategy on the operations of the public service and the cost thereof, in the public interest it would have been very wise to undertake at least a basic cost benefit analysis within his own Department?
Mr. MacSharry: As the Deputy will be aware from his few years in Government, which ended less than 12 months ago, the cost of public service pay has been one of the major factors in relation to overall expenditure. When you seek to curtail and reduce expenditure, public service pay must be reduced. Therefore, instead of having compulsory redundancies, the voluntary approach was adopted and has proved very successful.
Mr. Durkan: Given the number of applications which have been accepted in the current year to date, will the Minister tell the House whether the projections set out in the Programme for National  Recovery will be achieved as they were part and parcel of the agreement with the social partners? Will the targets be achieved, given the trends already established?
Mr. Durkan: The Minister indicated that he is not in a position to say how many applications he has received. Are the various Departments aware at this stage of the number of applications they have on hand? Will they communicate with the Minister and, if so, when, in relation to the total number they have received, given the importance of this matter?
Mr. MacSharry: We have the total number to date and they are given in the tabular statement. However, I do not have the breakdown of grades as that will be a matter for reply from each individual Department. I understand that there are questions in written form today which will be answered on that basis in so far as the Department of Finance are concerned. The Deputy's question would have been more relevant to individual Departments. It is not the Deputy's fault. I tried to get the information for all the Departments but I am not in a position to do so at present. It is the intention that all that information will be available in a co-ordinated way.
Mr. Desmond: What possessed the Minister to take a sudden decision to  offer the terms of the retirement scheme to people aged 50 and over, to the astonishment of what is left of the Department of the Public Service? What justification does he see in paying a public servant 25 years accelerated pension, in advance, plus a lump sum and severance payment? It is nonsensical in terms of getting rid of thousands of public servants who could be doing their work normally in a productive way, contributing to the economy and to the public service instead of spending £80 million to £100 million on such ridiculous so-called redundancies.
Mr. Noonan: (Limerick East): Apart from the criteria for refusal by the Department of Finance outlined by the Minister, if the number of applicants exceeds the number required for the Minister's purposes, does he reserve the right arbitrarily to refuse people?
Mr. MacSharry: In my original reply I dealt with reasons for refusing to grant voluntary redundancies but I do not think it will come to that. In relation to the Deputy's question, there is tremendous interest all round in this matter. It is not on offer broadly across the Civil Service except for those over 50 years of age, about whom the Deputy was complaining previously. If we do not get sufficient numbers, we will have to think about making the scheme available to people of 45 years of age. Most Members, particularly those who were Ministers 12 months ago, realise that we cannot achieve current savings without tackling the cost of the public sector.
Mr. Desmond: There will be no savings. The Minister did not carry out a cost benefit analysis of that scheme. There will be a minimum expenditure of £100 million and the Minister's Department are shocked at the prospect of that.
Mr. MacSharry: The Deputy appears to be annoyed that we are making progress. In fairness to him, when in Government he was one of the advocates of savings in public expenditure but he did not make much progress. Now that he finds 12 months after he left office great progress is being made he becomes annoyed. He is tripping himself up in venom every time he opens his mouth.
Mr. McDowell: Are the Government willing to make known to the House, either by way of reply to a parliamentary question, in the form of a White Paper or Green Paper or by way of statement, their strategy in regard to the redundancy programme? Will the Government say where they want to see acceptance of voluntary redundancy and where they do not want it? Will the Government identify the areas where voluntary redundancy is being encouraged and the areas where it is being discouraged? In fairness to the public servants involved they are entitled to know the policy that is being pursued. Above all, the House is entitled to know the direction the Government are moving. Is the Minister willing to indicate where they want to see redundancies taking place or is it always to be kept secret?
Mr. MacSharry: We have heard a diatribe from the Deputy four or five times in the past 12 months on this issue. Deputy McDowell deserves a response to his sensible question. I should like to tell him that when I took office on 10 March last in a number of areas in the public service, such as the Land Commission which had been abolished, officials were sitting around with nothing to do. Our Government decided to change the land tax office and, consequently, there were more staff with little or nothing to do.
Mr. MacSharry: It was because such officials were in this position that we introduced the voluntary redundancy-early retirement scheme. Whether that will call for the production of a White Paper remains to be seen but following the announcement of the scheme in July, and judging by the way it has operated since, I do not think public servants do not understand how it will operate. I am surprised to hear that some Members do not know how it will be implemented.
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