THE GOVERNMENT is to slash thousands of public sector jobs and services between 2007 and 2010, shaving five billion euros from the state’s expenses bill in the process.
The spending cuts are the latest phase of the Sócrates government’s controversial, but necessary civil service and public administration reforms, which both Brussels and leading economists believe are pivotal for the modernisation of the economy.
The cuts have already been included in the EU’s Programme for Growth and Stability for Portugal, which was handed into the European Commission in Brussels in December 2006.
Between this year and 2010, the reduction in civil service expenses in both staff, hours, services paid via green receipts and administrative and department cuts should save the treasury 4.9 billion euros representing 66.4 per cent of a total 7.4 billion euro spending cuts as a result of overall restructuring and streamlining the civil service.
The government has said that the massive savings in staff expenses will be as a direct result of the administrative overhaul envisaged within the Restructuring Programme of State Central Administration (PRACE) programme.
PRACE aims to control public spending by:
• Changing the way public sector employees are promoted on the basis of merit rather than years served.
• Controlling the number of new admissions into the civil service.
• Amalgamating government departments where possible.
• Freezing salary increases.
• Cutting department heads and middle management.
• Using private companies for outsourcing of some services in PPPs.
The forecast projections presented last week make it clear that by far the greatest impact of the reforms will be felt this year with cuts of 950 million euros with average cuts of 1.3 billion euros in 2008.
In 2005, there were approximately 737,000 civil servants according to a study carried out by the Directorate-General of Public Administration, which the government intends to slash by 75,000 between 2007 and 2009. Between January and November 2006, 10,633 staff were shown the door.
Of the 100 government departments, 56 were closed or incorporated into other existing departments, 133 central administration services were abolished and 544 senior management positions were axed, saving in all 0.8 per cent from the government’s total public spending bill.
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