THE CABINET is today expected to sign off on a major review of spending across all Government departments in a move which could lead to a significant reduction in the number of so-called quangos.
In addition to discussing plans by Minister for Public Expenditure Brendan Howlin for the comprehensive spending review, the special meeting of the Cabinet this evening is also expected to consider proposals to sell off State assets on foot of a report by economist Colm McCarthy.
The new spending review will involve a root and branch examination of expenditure in Government departments and agencies, and will also set out options on how services can be provided in the future.
Sources have suggested that, in addition to quangos, the new spending review could look at the local authority system and, in particular, at reforms which were recommended last year, including a sharing of management functions between different bodies.
Mr Howlin said that while the spending review did not represent “a crude way of saying we are going to eliminate X number of quangos”, it would ask every line department to look at all agencies under its aegis.
“It is to look at the possibility of amalgamating quangos; to see which can be drawn back into the parent agency and to see which we can do without. If there’s a compelling case for a standalone agency, they should share services such as IT and back-office support,” Mr Howlin said.
“The question is not what can the quango do. It’s is it something that’s absolutely imperative and can’t be done by anyone else.”
It is understood that each Government department would be asked to review how it spends its budget and how services were delivered.
A steering group of secretary generals of Government departments will oversee the review process which will then feed into the new economic council made up of senior ministers and into the budgetary process for next year.
The blueprint for the future delivery of Government services, which emerges from the review process, is then expected to form the basis of talks with staff and unions on its implementation.
Minister for Communications, Energy and Natural Resources Pat Rabbitte last night warned public servants’ pay could be cut again unless significant savings were made under the Croke Park Agreement.
“Frankly, the government needs to see tangible progress. We want to avoid, if we can avoid, the question of going back to cut basic pay. Public servants have taken two very serious reductions in their basic pay and we want to avoid that.
"But if we're going to avoid that there have to be significant savings in the area of an end to demarcation, more flexibility, better ways of delivering quality public services by fewer people," Mr Rabbitte told The Week in Politicson RTÉ 1 last night.
Meanwhile, Labour sources have insisted that no more than €2 billion of State assets will be sold off, despite Mr McCarthy’s recommendation to Government of a €5 billion figure.
The Cabinet agenda remained fluid last night but the new document by the author of the “Bord Snip” report is widely expected to be discussed as a non-agenda item.
In the agreed programme for government, the coalition partners said they would “target up to €2 billion in sales of non-strategic State assets drawing from the recommendations of the McCarthy review group on State assets, when available”.
A highly placed Labour source said: “In terms of economic parameters that we agreed, they were agreed with the knowledge of what was proposed by McCarthy, and the figure agreed was €2 billion”. The source insisted there would be “no political shift in the medium term”, adding: “Fine Gael agreed to this”.
Discussions are expected to centre on companies such as Bord Gáis and the ESB, which come under the remit of Mr Rabbitte.
Mr McCarthy would not comment on the report yesterday, but warned about the forthcoming jobs initiative programme, or so-called jobs budget, which is also expected to be discussed at Cabinet today.
“If there are measures in it which reduce Government revenue and increase Government spending they have to be made up elsewhere,” Mr McCarthy told The Irish Times. He said the Government’s focus should be on the pace of deficit reduction.
However, Minister for Enterprise, Jobs and Innovation Richard Bruton, who has responsibility for the jobs budget, described Mr McCarthy’s analysis as “simply wrong”.
Mr Bruton said a “narrow-based strategy that’s just about reducing deficit or letting failed lending of the past limp along in Nama or elsewhere” would not drive recovery.