Introduction
The size of the public service grew significantly in the early years of the last decade. By 2008, some 320,000 were employed in the Public Service and by 2009 the gross exchequer pay bill peaked at over €17.5bn. It is perhaps easy to become jaded in our discussion of Public Services pay costs. However, I would ask the House to note that the the total net cost of the public service pay bill will be reduced from 2008 to 2015 by some €3.5 billion, or 20% in 7 years. This reduction is necessary to contribute to the fiscal adjustment targets essential for our economy.
While commenting on public services numbers and the associated pay bill we must always remember that these costs are the price we pay for a civilized society. Public servants educate our children, care for our sick and disabled, clean our streets, and protect our environment. They ensure that our rights are protected and our person, homes and businesses are secure. In the emergency services Garda, Fire & Ambulance crews, and members of the Defence Force willingly place their lives at risk in the service of the State and their fellow citizens. Less dramatic, but no less important, is the role played by public servants in the administration of a complex modern society such as ours.
Citizens expect and demand a wide range of services to ensure their rights are protected and well-being is ensured in such areas as housing, water, transport, food safety and the provision of a social welfare safety net. Businesses require an appropriate regulatory environment in which to operate and flourish. Indeed, without such services, it would be impossible to attract inward investment and international confidence.
In short, the myriad of roles undertaken by the Public Service has ensured that we now have the healthiest, best educated and most innovative population in this country’s history.
As I have stated the Government is committed to reducing public service numbers and producing a more customer focused, efficient, better integrated public service which delivers maximum value for money. This is not being done merely because it is a fiscal imperative it is also been done to ensure that we can continue to enjoy a vibrant modern, forward looking civil society.
Public Service Numbers
The Government must and will continue to give close attention to the State’s finances.
Ireland is committed under the EU-IMF programme to reducing the overall size of the public service. This is also a key element of the Programme for Government. Delivering this reduction will require continued implementation of the moratorium on recruitment with exceptions being limited to only essential posts and the utilization of redeployment as the primary mechanism to fill posts which have been approved. In order to protect frontline services, the Government is committed to making fundamental changes to the way the public service operates. This will inevitably mean changes in the way in which services to the public are delivered.
As Deputies will no doubt be aware, the Government is committed to reducing public service numbers to 282,500 by the end of 2015 as part of its Reform Agenda. Our overriding objective is to have a more customer focused, leaner, more efficient and better integrated public service which delivers maximum value for money.
The establishment of enhanced numbers monitoring systems and multi-annual employment frameworks has strengthened the Government’s capacity to control public service pay and plan future staffing levels.
Today, I am pleased to inform Deputies that significant progress is been made in reducing the numbers employed in the Public Service. The numbers working in the public service have continued to fall, with the provisional outturn for end-2011 now standing at 296,900, which means that we are now at close to the 2005 staffing levels.
This is year-on-year reduction from end- 2010 of over 8,500. The Employment Control Framework ceiling for the public service in 2011 was 301,000. To exceed this target by over 4,000 is impressive.
Public Service Pay Bill
The Public Service pay bill has stabilized and we are now back to 2006 pay levels. This is no small achievement and I recognize the impact this has had on public service workers and their families. I would also like to salute the many people in our public services who are striving daily to deliver a first class service within reduced resources and increased demands.
I am confident that given the number of departures in 2011, together with estimated retirement numbers for 2012, we are on track to meet our target for 2012 of 294,400, exceeding the target set by the previous Government by two years. This will allow us headroom to recruit up to 3,000 staff where necessary to maintain services, mainly in the Health and Education sectors.
Of course, such a reduction in public service numbers will pose challenges. It will require a refocus on business processes and adjustments to the way public servants use available resources. It will require changes to the way individual public servants go about their daily work and greater flexibility in the way services are provided, for example with greater use of technology and shared services. I am certain, however, that our public servants are capable of meeting these challenges. The Croke Park agreement demands a number of specific sectoral and cross-sectoral reforms. Some of these are designed to save money directly. Others are tools to manage and prioritise services as staff numbers fall. Reforms so far delivered include reduced leave, extended working hours, rationalisation of agencies, centralised and shared services, staff relocation and staff redeployment.
Public Service Agreement
The redeployment arrangements contained in the Public Service Agreement 2010 – 2014 (the Croke Park agreement) allow the Government to sustain priority services by providing the Government with an effective and efficient mechanism for allocating staff to the areas of highest priority, without the need to resort to outside recruitment. Where recruitment is necessary, this can and will be undertaken within the parameters of the Government’s numbers and budgetary strategy.
There are some who question the Croke Park Agreement. However, it has provided the framework of co-operation and flexibility to enable us to effect a necessary reduction in the Exchequer pay and pensions bill in a climate of industrial peace. In simple terms it provides an agreed framework to reduce base costs, enhance productivity and support the public service reform agenda. There are real advantages to be state as employer to be able to pursue this ambitious programme without endless industrial strife.
In addition, where the circumstances require it, the Croke Park Agreement allows for targeted voluntary exit mechanisms in the Public Service. It is envisaged that such mechanisms will only be required when redeployment or up-skilling are not appropriate and a permanent reduction in numbers is required.
Grace Period Retirements
As the Deputies are aware there has been some concern expressed about the ending of the ‘grace period’ towards the end of last month. I am pleased that the considerable work undertaken in all areas of the public service have ensured that the nightmare scenarios depicted by some have not materialised. It was expected that between late 2011 and spring 2012 that some 9,000 public servants would retire. Latest figures suggest we will have exceeded this slightly. Overall there will be approximately 17,000 retirements between 2011 and 2012, which equates to 3 years retirements in 2 years.
I suspect that in many cases deputies misunderstood the extent of the departures in February. In 2012 there will be some 8,000 retirements over the year. What is different this year is that most of the retirements are happening over 2 months rather than over the whole year – on the other hand public service managements have known for over a year that there would be higher staff departures in early 2012. It is always the case that staff retiring in any organization will be among the most experienced, however it is the responsibility of local management to handle ongoing staff turnover.
Sectoral Transition Teams have been put in place to deal with the specific short-term challenges arising from the ending of the grace period. The reports from these Teams indicate that they have given due consideration to the impact of staffing reductions on the various sectors and the most fitting and expeditious ways of managing these.
As they have the most current information on service provision at a local level, each sectoral Transition Team has been directed to actively communicate with the public via whichever means appropriate in order to allay concerns with regard to critical frontline service delivery. Public concerns about service levels are been addressed proactively and the public should and will be kept informed of business continuity arrangements that are in place.
Pension Costs
Much has been made of the fact that Public Service pension costs are set to rise from €2.1billion in 2008 to €3.1billion in 2015, however it should be noted that the €1 billion increase in Exchequer pension costs represents a pensions liability that was due to mature in any event as a
result of the normal retirement of staff recruited 30 to 40 years ago and does not represent a new liability for the Exchequer. There was a significant expansion in many parts of the public service in the 1970’s, influenced among other factors by our accession to the EEC and the introduction of free second level education. It should, therefore, come as no surprise to the House that we would see additional public service pensioners coming on stream in this decade as this cohort of staff reach the end of their careers.
Workforce Planning
The increased number of retirements and the changed nature of Irish society present the Government with the challenge and the opportunity to reshape and reform the public service to meet emerging social needs. This is the central mission of my Department. To help with this task, the Government has established Strategic Workforce Planning groups in the Education, Health Civil Service, Local Authorities, Defence & Justice Sectors. These Workforce Planning Groups will ensure that sectoral employers are developing plans to deal with the operational and strategic consequences arising from the anticipated staff turnover in 2012 and future years on an ongoing basis. The sectoral groups are liaising with the central Strategic Workforce Planning Forum under my Department.
While the primary focus of the numbers policy will remain the reduction in the public service pay bill, there will also be an opportunity, in the coming years to reinforce the upskilling and reforming of the public service. It will be important that longer term workforce planning needs are also addressed with (initially very small scale) recruitment of staff at various levels across the different parts of the public service; measures such as the targeted graduate recruitment competition which is now under way, will address such gaps.
However, I wish to reiterate that in the first instance, responsibility for operational planning will and must rest with the relevant Public Service body and its parent Department.
Reform of the way in which the public service does its business will of course impact on public service customers and will necessitate some alteration of expectations as to how services are accessed and delivered in the modern age.
Frontline Services
In order to mitigate the impact on frontline service provision as far as possible with the co-operation and flexibility of individual public servants, we will fully use the mechanisms set out in Public Service Reform Plan, including the filling of essential posts and the utilisation of redeployment. The Government is committed to making fundamental changes to the way the public service operates to safeguard the delivery of essential services in a way that is in keeping with the needs of a modern society while driving value for money for the citizen.
As I have said repeatedly, this Government is determined to protect frontline services and that is precisely why we are pursuing such an ambitious Programme of Reform. The reality is that without urgent and meaningful reform frontline services will suffer.
We will need to organise and manage the Public Service differently and in some cases we will need to deliver services in a different way to reflect the evolving needs of our citizens.
The public service moratorium on recruitment and promotion will continue with certain limited exceptions, for example in relation to some frontline posts, or statutory positions, etc. where a sufficiently strong business case is made to my Department. In the Health and Education sectors in particular special arrangements are in place for exemptions to the moratorium on recruitment for specified grades or positions.Again I wish to make clear that, it is part of the day to day function of the Boards and Management of all public bodies to assess, budget and plan for current and ongoing staffing requirements within existing resources.
Conclusion
Public services are essential to the functioning of our economy and society. Citizens and businesses expect and demand a modern Public Service, a Public Service that is continually improving and delivering services faster, better and more cost effectively with fewer staff.
It is the intention of this Government to ensure we have such a Public Service for current and future generations