THE government's cull of state agencies is shaping up to be far more severe than has been anticipated. While informed sources dismissed speculation that as many as 20% of the agencies would be abolished, the Sunday Tribune has learned the list of those facing the chop will be long and will include "a lot of surprises." "There is no question there is a proliferation of agencies with the same functions," one source said, adding that this will be addressed in the coming weeks. Sources also said that a list of agencies to be abolished had not yet been finalised. However, the proposal to merge various equality and human rights bodies is regarded as inevitable in government circles, despite an intense campaign against this in the media.

The possibility of a super-regulatory authority being created which would incorporate all offices of the current regulators is another idea currently "being kicked around," although no final decision has been taken. This proposal is seen as attractive because it would be regarded as both cost efficient and championing the consumer. It is possible, but not certain, that some announcements on cutbacks will be made before Budget day on 14 October, as the government looks to control the agenda over the coming weeks.

Tomorrow is the date set by finance minister Brian Lenihan, at the beginning of the summer, for the conclusion of the spending estimates process for 2009. There is likely to be a day or two slippage on that deadline – with ministers down in Galway at the Fianna Fáil think-in for Monday and Tuesday. However, by the end of this week Lenihan will have a strong idea of the shape of his spending plans for next year.

Government sources played down reports of a 2.5% cut in spending across all departments, but it is clear that there will be cuts in real spending in all departments.

Education and Health are seen as the two most problematic departments given the sensitivity of spending cuts in these areas. However, sources said there is a strong sense of realism among ministers as to what is required.

"There is an appreciation about what needs to be done. The penny has dropped," one source said.