Public sector redundancy plan to cost €110m

The Government has estimated the cost of its accelerated targeted redundancy scheme for the public service at €110m, as it seeks to axe an extra 4,000 jobs in 2013 and 2014.

However, sources insisted that the scheme will lead to savings of €50mn a year.

They claim it will pay for itself within two years on a gross basis, and three years on a net basis.

Under the Government's proposals, public service numbers would fall from 291,000 at present to 287,000 by end 2013, and 282,500 by the end of 2014. The original target was to hit 282,500 by the end of 2015.

The scheme was discussed at Cabinet today - though the formal outcome of those discussions has not yet emerged.

Minister for Public Expenditure and Reform Brendan Howlin said the first tranche of redundancies would target staff in the health, agriculture and education sectors who were surplus to requirements, and could not be redeployed.

"Where there are people who can't be deployed we can offer them a voluntary package to go," he said.

The scheme will focus on back-office and support areas, as well as management and administrative grades, rather than frontline services.

It is understood the Government expects natural retirements to achieve much of the reduction, but as some staff are being replaced in health and education, they will need a further 2000 exits in 2013 and again in 2014.

Staff will receive a redundancy package of three weeks per year of service plus statutory capped at two years salary - or else half pay until retirement.

There will also be an early retirement element - though pension entitlements will be calculated on the basis of current salary, and not pay rates prior to the government's imposed pay cut.

The Government stresses that there will be no automatic right to redundancy - with applications subject to ongoing business needs and service provision priorities.

Further staff surpluses are expected to arise over time as shared services are introduced in areas including human resources, finance and payroll.

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