Public banking system ruled out; Severance package agreed for 30 Gardaí

The Government has ruled out setting up a system of community banking for consumers on the basis that post offices and credit unions are already prevalent in areas.

Finance Minister Paschal Donohoe will release a report this week on research into the public banking model. The examination was part of a Programme for Government commitment.

A spokesman for the Government said a decision was taken not to proceed with the community banks as many areas have existing post offices and credit unions.

Mr Donohoe and his Cabinet colleague, Rural Affairs Minister Michael Ring, last year released a separate report on local public banking which also looked at similar proposals.

In that report, the cost to the exchequer for such a proposed banking model was estimated at a minimum of €170m. The report concluded that locations in a proposed pilot in the Midlands would overlap with existing banks, credit unions, and post offices.

Nonetheless, it suggested such a scheme could bring extra competition to the banking sector. The Government has now in effect ruled out the option, following the second report for Mr Donohoe.

Meanwhile, a special severance package was agreed by Cabinet for up to 30 senior members of An Garda Síochána. The scheme, which will cost €6.5m next year, aims to incentivise 30 Garda members at senior ranks to take retirement before the maximum retirement age of 60 years.

The offer is part of the new area plan for An Garda Síochána which aims to reduce the number of garda divisions from 28 to approximately 19. Of the 30 positions targeted for redundancy, 20 will be at the rank of superintendent, eight at chief superintendent rank, and two at the rank of assistant commissioner.

Explaining the scheme, Justice Minister Charlie Flanagan said: “Broadly speaking, those availing of the scheme will receive six months’ pay, in addition to their normal pension and lump sum entitlements, while the additional cost of the programme will be in the order of €6.5m during 2020.

“This represents the costs of paying the severance gratuities that fall due in 2020, and also the additional costs associated with bringing forward lump sum and pension payments that would not otherwise fall due to be paid until later years.”

Elsewhere, Cabinet agreed to set up an electoral commission as well as to modernise the electoral process. Local government minister John Paul Phelan will announce plans in the coming days which will see a permanent body set up to oversee planning for future public votes.

The new independent commission is expected to take a number of years to be established.

A Government spokesman said that even if the next general election was to take place in 2021, it was unlikely the new commission would be ready to do its work by then. The new commission would be accountable to the Oireachtas and would take on the role of local authorities when it came to overseeing voting procedures.