Great public sector cull looms as the Executive plans to make 13,000 staff redundant to save £160m in salaries

A major public sector redundancy scheme that could see more than 10,000 people leave their jobs here is set to be finalised within weeks.

The unprecedented voluntary scheme, which ministers hope will save £160m, must be included in a budget that has to be agreed by the end of the month.

It is part of the agreement brokered by the DUP and Sinn Fein with the Treasury for the £100m loan that bailed out the Executive.

Part of the payback is that Stormont has to produce a viable budget – and the redundancy scheme must be in it.

The last redundancy scheme in the Civil Service here was in 1995, and ministers believe there will be huge interest in the new one.

Malcolm McKibbin, the head of the Northern Ireland Civil Service, has been tasked by the Executive with drawing up options for the scheme, which would spread across all public services.

Finance Minister Simon Hamilton told the Belfast Telegraph: "Not every jot and tittle of it will be agreed in the next week, but we will have the outline and enough information to give the go-ahead to go to the next stage."

There are 212,000 public sector employees in Northern Ireland, about 24,000 of whom work in the Civil Service. There are another 74,000 in the health service, 65,000 in education and 10,000 in the police. More work in local government.

"To achieve the savings, the scheme will have to cover the whole public sector," Mr Hamilton said.

"The pressures are hitting right across the board and the Civil Service is only a little over 10% of the total.

"We don't want to do it in a way that affects frontline service delivery, so in departments like health, people on the administrative side might be the most likely to be accepted for redundancy."

In England, a recent redundancy scheme reduced the Civil Service by 10% during a time when our headcount fell by only 4%.

If the scheme here achieved a further cut of 6% of the workforce to bring us into line with England, it could mean around 13,000 people leaving their jobs. In England, it took an average of 18 months for the cost of a redundancy to be achieved in wages saved.

Mr Hamilton said he hoped the Treasury would lend the Executive the necessary money to help kickstart the scheme.

"If we can show that we are making savings pro rata with England, that will help us get back onto a balanced budget and the Treasury will be amenable to help us achieve the savings," he said.

If the Executive can agree an acceptable budget by the end of this month, the Finance Minister added he believed the Treasury may even write off some of the charges incurred for refusing to introduce welfare reform. These charges are £87m this year and £114m next year.

Chancellor George Osborne, promised the Executive a £100m bailout if it could present him with a viable budget by the end of the month. The Executive hopes to save around £160m through public service redundancies.

"It is very, very clear from the Chancellor's letter that the £87m penalty is gone from our block grant this year and £114m is to be taken out next year as well," Mr Hamilton said.

But he added: "I would hope that, if we can make movement on welfare reform, we can get that money back from the Treasury.

"If we can show that we are moving forward on welfare reform, there is a chance – I wouldn't put it any stronger than that – that the Treasury would see it as a sign of good faith and not penalise our budget.

"That wouldn't be all of our financial problems solved, but it would certainly help dig us out of the crisis we are now facing."

Mr Hamilton has been central to negotiations with the Chancellor to stop Northern Ireland's public finances collapsing under the strain of accumulated overspend and the failure to introduce welfare reform. "We had a situation where the roof might have caved in," he said.

A £100m Treasury bailout loan was accepted by the Executive after nearly six hours of indecision on Thursday, but it came with strict conditions. The main one is that the Treasury can effectively veto spending plans if it does not believe the books will balance out over the next year.

Further reading

Belfast Telegraph