Dáil Éireann debate -
Thursday, 1 May 1997

Vol. 478 No. 6

Written Answers. - Departmental Expenditure.

Robert Molloy

Question:

28 Mr. Molloy asked the Minister for Finance if he will give details of each Department's reduction in planned expenditure as requested by him following recent pay increases in the public sector; and if he will make a statement on the matter. [9029/97]

Batt O'Keeffe

Question:

33 Mr. B. O'Keeffe asked the Minister for Finance the cutbacks which will be necessary to cover the nurses' £80 million pay deal; and where these cutbacks will take place. [9546/97]

Minister for Finance (Mr. Quinn)

I intend to reply to Questions Nos. 8 and 33 together.

The full year cost of implementing the Labour Court recommendation on nurses' pay and conditions is estimated at £80 million. The estimated cost in 1997 is £76 million. An amount of £27 million was provided in the Abridged Estimates Volume to cover the cost of settlement of the nurses' claim on the basis of adherence to the accepted norm of 5.5 per cent under theProgramme for Competitiveness and Work. An additional amount of £49 million had to be provided therefore to cover the full 1997 cost of the nurses' award.

The Government was determined that the nurses' pay award would not result in any further increase in public spending or borrowing. The Government decided therefore to make reductions in spending to offset the full additional cost of £49 million. This has been done by reducing the gross post-budget allocations for all Vote groups by 0.3 per cent. The steps to effect those reductions have been identified and agreed by the Government. The additional cost of the nurses' pay award and the agreed offsetting savings have been incorporated in the departmental allocations included in the Revised Estimates for Public Services.

Savings of some £24 million in live register costs was the single biggest item in the package of measures agreed. I can assure the Deputies that all of the measures involved real reductions in spending which will have a continuing effect. This will ensure that the additional cost of the nurses' pay award will be offset not just in 1997 but on a permanent basis.