Special public pay allowances face axe

Special allowances for public service workers could be scrapped and incorporated into their core pay, Public Expenditure Minister Brendan Howlin said.

The Labour minister made the remarks ahead of the Cabinet considering a review of over 800 allowances for public service workers.

He also said that up to €600m in savings could be made across departments through efficiencies in procurement. He said departments were being asked to consider outsourcing and sharing services.

But the move to reduce departmental and agency costs was immediately met with opposition by trade unions, who argued that outsourcing work to the private sector would actually cost more.

Mr Howlin said the Government had still to consider a review of 800 allowances for State workers. It is borrowing €1bn a month to pay for all public services.

“I think we need to re-label a lot of allowances as core pay, if they are core pay, in the future,” he said.

He said Education Minister Ruairi Quinn had “radical ideas” about how to restructure teachers’ pay and that the Government might look as well at allowances for gardaí.

He said the Government would publish all the business cases from each department on reviewing allowances.

He released a review of his reform plan yesterday which suggests that between €200m and €600m could be saved, mainly through changes to buying services.

A procurement officer will be appointed at assistant secretary general level to oversee savings.

Finance Minister of State Brian Hayes said some departments were buying the same goods for different prices from the same supplier. Also, there are plans to amalgamate payroll and human resources sections from different departments.

Siptu vice-president Patricia King warned that outsourcing public services would not lead to any considerable savings and would more likely result in higher costs for the exchequer.

The Croke Park deal also provided that management must use direct labour “to the greatest extent possible”. She warned that in some cases outsourcing cost more than providing services through direct labour.