Government cutbacks - Right move, but why not sooner?

Following publication of last week’s exchequer figures, the Government was facing a shortfall of about €3 billion on expected revenue for 2008. Hence corrective action became an imperative yesterday.

All departments, state agencies and local authorities, other than health and education, are being required to reduce their payrolls by 3% by the end of 2009. In addition, expenditure of all departments and state agencies on consultancy services, PR and advertising is to be cut “by at least 50% in 2009 compared with 2008”.

The Government was less specific on the other savings to be implemented. State agencies, boards and other public bodies are to review their activities, staffing and costs by examining the scope for rationalisation, shared services and other measures. This will involve the amalgamation of agencies where possible.

All capital programmes will be examined to ensure that resources are targeted at construction-related investment, and the process of decentralisation is essentially being put on hold, pending a report from the Decentralisation Implementation Group.

The Department of Finance and the Department of Health and Children must prepare proposals to implement a surplus staff reduction scheme in the HSE, and consideration will be given to extending the programme to other departments. This is a patent admission that the HSE has been overstaffed since the amalgamation of the various health boards.

The Government also announced the suspension of all pending increases for ministerial and parliamentary office holders and other senior public servants until September 2010.

The need for action in relation to many of these measures has been obvious for months, or even years. Why was the action not taken before this? The Taoiseach contended the Government could not act before last week’s figures came out, but that is absurd. The cuts ordered in relation to consultancies, public relations and advertising are a huge 50%. Had those been something on the lines of 10%, one might suggest that the Government was trimming, but cutting them by five times that amount is a naked admission of waste and extravagance that should have been tackled earlier.

The real victims are the 54,000 people who have lost their jobs in the past year. Curiously there was no announcement of any initiative to try to help those people to get back into the job market.

It is a naked admission of a lack of leadership on the part of the Government. People may argue about the extent of the cuts, but there can be no argument that this corrective action should have been taken much earlier.