Burton won on cuts after official warned of fallout

Department warned savings worth €440 million would be politically controversial

Minister for Social Protection Joan Burton successfully resisted planned cuts of €440 millionto welfare spending. Photograph: Frank Miller/The Irish Times

Minister for Social Protection Joan Burton successfully resisted planned cuts of €440 millionto welfare spending. Photograph: Frank Miller/The Irish Times

Mon, Feb 3, 2014, 01:00


Government Ministers examined a range of radical cost-cutting options in the run-up to the recent budget, including across-the-board cuts of €6 a week to pensions and welfare payments.

The move would have breached the Government’s pledge to protect core welfare rates.

Another option involved cutting the monthly child benefit by up to €30, which is paid to more than 600,000 families.

The details are contained in internal budget documents and provide an insight into how Minister for Social Protection Joan Burton successfully resisted planned cuts to welfare spending of €440 million.

In the end, the reduction in welfare spending in the budget was just half the original amount sought by the Department of Public Expenditure.

Ms Burton’s officials at the weekend denied planned cuts to core welfare rates were “scare tactics”, but reflected the extent to which reductions in previous budgets left policy-makers with few other options.


‘Unpalatable options’
“We weren’t trying to scare anyone,” said a Department of Social Protection senior source. “Welfare spending has been cut to the bone and all we were left with were very unpalatable options.”

In a discussion document sent to the Department of Public Expenditure in the run-up to the budget, a senior official at Ms Burton’s department warned that savings worth €440 million would be politically controversial and might be “politically difficult to deliver”.

These proposed cuts to core welfare rates were also accompanied by detailed studies examining the social impact of these measures.

For example, reductions in primary welfare rates would have increased poverty rates significantly, according to the Department of Social Protection research, and would have hit the less well-off disproportionately hardest.


‘Deep cuts’
Even if welfare rates and child benefit payment were protected, officials warned the alternative would be the “abolition of some supplementary welfare schemes” in their entirely and “ deep cuts” in others.

Long-standing plans to either tax or means-test the child benefit were “implementable”, the document added. But given the lead-in times required, any reforms would not contribute significantly to making required savings.

On budget day, Minister for Public Expenditure Brendan Howlin announced that welfare spending cuts would be just €226 million, rather than the €440 million his department had sought earlier in the year.

While the most controversial cuts were avoided, the €226 million reduction in welfare spending still heavily affected a range of groups such as young jobseekers and new mothers.

Internal documents released under the Freedom of Information Act show how many of these cuts were justified by officials.

In the case of cuts of more than €30 a week in maternity benefit, among the reasons offered by officials were that Ireland has “one of the highest birth rates in Europe and high participation by women in the labour force”.

Other cuts included abolition of the bereavement grant, a social insurance-based payment worth €850 and paid to 20,000 people a year.