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Hold-up in public sector exit scheme could cost Stormont up to £8m a month

By Noel McAdam

Published 24/08/2015

Arlene Foster
Arlene Foster

Delays to the massive public sector 'exit' scheme will cost Stormont coffers between £2m and £8m every month, it has been revealed.

That is the latest warning from Finance Minister Arlene Foster based on anticipated savings to Stormont's payroll which would kick in immediately people quit their jobs.

The additional loss to departmental budgets would come on top of the £8m already being handed back in Treasury 'fines' each month over the failure to implement welfare reform.

The stalemate over the Stormont House Agreement has meant offers to around 2,400 civil servants to leave by November have effectively been put on hold.

The first tranche of about 1,200 had been due to leave by the end of September but the eventual aim is to shed 20,000 jobs across the public sector over a four-year period.

A statement from Mrs Foster's department said: "Delay in the allowing each tranche of staff to leave, of which there are four planned between September and March 2016, will lead to approximately £2m of pay-bill savings lost per month, or £8m in total per month if no one is allowed to leave under the scheme."

A decision on whether the scheme can go ahead is expected to be made at the first Executive meeting following the return of the Assembly from its summer recess.

The head of the civil service, Dr Malcolm McKibben, has written to civil servants indicating a decision on a go-ahead, or stalling the scheme, will have to be taken next month.

He said that "this time-frame is very close to the conditional leaving date" for the initial group leaving but should the decision be to go ahead, staff would still leave on the planned date.

He has also told Stormont's Finance Committee: "There is a logic in saying that this scheme should go ahead and it's just a question of how we can fund it."

The scheme relies on access to £700m of loans from the Treasury but Secretary of State Theresa Villiers has said all components of the Stormont House deal hammered out just before Christmas last year must stand or fall together.

Dr McKibbin had also told MLAs, however: "If the welfare reform issue isn't sorted out in the pretty near future then clearly we are going to have to engage with the Treasury to see if access to this money can be obtained. Whether or not they will allow that to be pulled out of the Stormont House Agreement, I don't know."

Brian Campfield, general secretary of the biggest public sector union, the Northern Ireland Public Servants Association (Nipsa), has warned it would be "demoralising" if staff who were expecting to be let go end up being prevented.

"It's demoralising for those who have set their hearts on going, and if they are then told they cannot leave when expected, it is likely to have an effect on morale and even productivity," he said.

Nipsa is broadly opposed to the scheme but cannot prevent individual members from applying, as they have in their thousands.

"I think it is crazy to use borrowed money to invest in the running down of public services," Mr Campfield said.

"But from the point of view of officials there is an internal logic in trying to maintain the original timetable while hoping the money to allow it to happen will be in place.

"I think a lot of individuals are frustrated because there is uncertainty about whether they will be allowed to go or not."

The £2 a month already being handed back to the Treasury is based on its calculations of savings to the public purse had the welfare reforms been implemented.

20,000 public sector jobs are to go over the next four years

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