Taxpayers owed €50m from redundancy debts
The Enterprise and Employment Department was warned to get a grip on the situation by the Oireachtas’s Public Accounts Committee (PAC) as job loses are set to spiral this year.
While the state pays 60% of redundancy payments, employers are obliged to meet the rest, but the amount owing has rocketed from €13.5m at the end of 2002 to €48m last year.
With the number of redundancies exploding by 59% to stand at 40,607 in 2008, the outlook for this year is even bleaker as the recession bites deeper.
The Comptroller and Auditor General expressed concern the department had not pursued the debts with sufficient vigour.
A Write-Off Committee set up by the department last April decided €8.5m worth of debts would never be recovered. A recoveries unit was also put into operation from 2007, which department secretary general Sean Gorman said had helped focus efforts to claw money back from employers.
Redundancy payments have emerged as a major drain on state finances with €176m being paid out by taxpayers for the severance packages in 2007.
PAC members also expressed alarm at how concerns regarding practices in the training body Fás had been allowed to fester for four years after an anonymous letter in 2004 alerted the Employment Department to possible wrongdoing at the agency.
Chairman and Fine Gael TD Bernard Allen said it was “incredible” that speedier action was not taken, especially as the department was represented on the board of Fás.
Labour PAC member Tommy Broughan asked why “alarm bells” had not rung for four years.
Mr Gorman said the matter was being dealt with internally by Fás in that time.
