€75m public service allowances saving now unlikely

Wed, Jul 25, 2012, 01:00

THE GOVERNMENT had been hoping to generate savings of €75 million this year as a result of its review of allowances paid to staff in the public service.

The review was due to be completed last February. However, given the delay in making decisions, it seems unlikely this amount will now be realised.

As the Department of Public Expenditure and Reform ordered that allowance payments be stopped from early February for new entrants and those not already in receipt of them, some money will have been saved. However, union sources have pointed out that those denied allowances that the Government decides to keep will be looking for a refund.

There are about 800 allowances paid to staff across the Civil Service, health service, education sector, local authorities, Garda and Defence Forces at a cost of €1.5 billion.

At the end of last year the Minister for Public Expenditure and Reform, Brendan Howlin, signalled he wanted these examined.

Government departments and agencies were asked to produce a business case for all allowances. These were then to be assessed by the Department of Public Expenditure and a final decision made by the Cabinet on whether the allowances should be retained.

The review of allowances always had the potential to be problematic, given the guarantees on pay set out in the Croke Park agreement. Trade unions have said they would consider any cut in allowances to be a breach of the agreement. Some teaching unions warned they would ballot on industrial action if allowances were hit.

Details of many of the allowances are widely known, such as those paid to teachers for holding higher qualifications. However, Mr Howlin has refused to publish the full list of those currently paid pending completion of the review.

There was some controversy after details of some Civil Service allowances were revealed on foot of parliamentary questions. These included allowances for shoes, clothing, school fees, franking and eating on site.

The likely row over reform of allowances has not been avoided by the lack of a Government decision yesterday: it has merely been postponed.