A minimum of 17,358 public sector jobs would be eliminated and all social welfare payments would be reduced by 5%, writes ARTHUR BEESLEY.
A “MINIMUM” of 17,358 public sector jobs would be eliminated and all social welfare payments would be reduced by 5 per cent under proposals from “An Bord Snip Nua” to cut a total of €5.3 billion from the annual cost of running the State.
The expenditure review group, chaired by UCD economist Colm McCarthy, calls for a lower standardised universal child benefit payment and curtailments to the eligibility for many other welfare payments.
Although the group says the education and health systems should bear the overwhelming burden of the job cuts, the biggest financial cut would come from the social welfare budget. This would be cut by €1.85 billion from €21 billion.
The group says there is a clear case for social welfare rates to be “adjusted downwards” in line with economic developments, pay reductions and lower prices in the wider economy. The general 5 per cent reduction in all social welfare rates would save €850 million in a full year. “This would effectively preserve living standards for affected groups relative to 2008.”
To save €513 million, the group calls for the introduction of a new standardised monthly child benefit payment of €136. This cuts by €30 the monthly payment for the first two children in a family and cuts by €67 the payment for each successive child.
The group says €100 million could be saved by phasing out “second” welfare payments such as the half-rate carers’ allowance, the half-rate illness benefit and the half-rate jobseeker’s benefit.
While a further €100 million could eventually be saved by scrapping double-payments for community employment schemes, existing beneficiaries would not be affected while on their current placements.
Hospital and other medical fees should be increased, the group says, and there should be new charges such as a €5 prescription fee for medical-card holders. In addition, the group wants to impose a €500 annual charge for every child using the school transport scheme.
Many of the savings could, if agreed, be delivered next year, the group says.
It calls for new benchmarking review of public sector pay. For the first time, the review should have a mandate to compare Irish pay with the pay for equivalent jobs abroad and be empowered to recommend pay cuts “where the facts warrant this”.
Citing the public sector recruitment embargo, routine retirements from and the existing voluntary severance scheme, the group says that more than 17,000 job cuts can be achieved without any compulsory redundancies.
“Initial reductions are the minimum that must be achieved,” the group says.
However, large numbers of staff would have to be redeployed between Government departments and other parts of the public service to meet that objective. This would require trade union consent to change existing rules and procedures.
In addition, the group says the Government should consider how best to secure an “appropriate contribution” from public service pensioners in light of acute weakness in the public finances. It also says the age at which people qualify for State occupational and social welfare pensions should be revised upwards to account for longevity increases.
The discontinuation of the social insurance benefit for dental, optical treatment and hearing aids would save €92 million and and grading the jobseeker’s allowance by age would save €70 million. A review of rent supplements could save of €35 million.
The elimination of 6,168 health jobs would save an annual total of €300 million, amounting to a cut of 5.4 per cent in the total number of staff in the sector. The group’s ultimate objective is to see cuts totalling €1.23 billion from the €15 billion health budget.
Further “efficiencies” at the Health Service Executive would save a cumulative average of €90 million a year, yielding a total of €275 million by the end of 2012.
These include a review of overtime payments and the end of “unnecessary demarcation” between grades that prevents nurses from carrying out routine procedures performed by non-consultant hospital doctors.
The group says a further €370 million could be saved by inviting tenders from general practitioners and pharmacists to provide services under the general medical services (GMS) scheme.
Other measures would increase the cost of healthcare to many patients. To save €70 million for the Exchequer, for example, medical card holders would pay €5 in respect of all prescriptions under the GMS and long-term illness schemes.
An increase to €125 from €100 in the monthly eligibility threshold for the Drugs Payment Scheme would save €37 million. To save €6 million, public hospital inpatient charges will rise 20 per cent and standard accident and emergency charge at hospitals would rise to €125.
The elimination of 6,930 eduction jobs will cut 7.3 per cent from total employment in the sector, the group says.
Measures to save a total of €734.9 million include €150 million in savings from staffing “efficiencies” in the primary and post-primary sectors, €100 million from the cost of substitution and supervision arrangements and €50 million from a review of teachers’ management allowances.
The group suggests a further €140 million in efficiencies at third level, including a reduction of 2,000 academic and non-academic staff in universities and institutes of technology.
Increased “staffing” schedules would save €30 million at primary level and €50 million in non fee-paying secondary schools. A cut in primary special needs assistants would save €60 million and a reduction in English language support teachers would save €21 million. The group would reduce by €25 million the State’s support for fee-paying schools, resulting in a 21 per cent increase in private school fees.
There would be 1,140 staff reductions from the agricultural sector, 594 in the environmental area and 540 in the justice area.
The Department of Community, Rural and Gaeltacht Affairs should be closed and its functions moved to other departments, the group says, and the Department of Arts, Sport and Tourism should be “critically examined” in light of the extensive saving being sought.
Numerous State agencies would be rationalised, key regulatory agencies among them, and bodies such as the National University of Ireland, the Western Development Commission, the Irish Film Board and Sports Campus Ireland would be scrapped.
Ireland’s network of embassies and consulates would be reduced from 76 to 55 and almost 40 ambassador posts would be switched to a lower pay grade.
In addition, half of all Garda stations would close. The report also says the Law Reform Commission should be abolished and convened only on a temporary basis.