Cutbacks: An Bord Snip Nua chairman Colm McCarthy

SOCIAL welfare cutbacks totalling €1.5bn will be contained in the final report of An Bord Snip Nua, due to be presented to finance minister Brian Lenihan within days.

The Sunday Tribune has learned that it proposes overall cutbacks of €5bn – the biggest potential overhaul of government spending in the history of the state.

There is intense speculation the report will also contain recommendations to:

* Close up to half of all rural garda stations and restrict garda numbers by as many as 1,000.

* Further rationalise the number of army barracks, with cuts of up to 1,000 in defence force personnel.

* Dramatically reduce public sector numbers by about 10% or 30,000, saving over €1.5bn a year.

* Cut little-used public transport routes.

* Reduce the overall budget of the House of the Oireachtas, restructure government departments and slash the numbers of diplomatic staff serving abroad.

* Row-back on decentralisation building projects.

The cabinet is certain to reject some proposals but, with the government forced to reduce spending by €4bn this year, room for manoeuvre is limited.

Most attention is likely to focus on the €21bn social welfare budget, which An Bord Snip Nua will propose cutting by over 7%. The body is unlikely to recommend specific rate reductions, but is certain to look for restrictions to certain benefits. Chief among these will be the rent supplement allowance and universally applied child benefit. Sources say the rent supplement budget has failed to reflect the sharp fall in rental prices, while ministers are moving towards introducing means testing of child benefit.

The other major expenditure item for the government, the public sector pay bill, will also feature large in the report. Numbers in the public sector have risen by a staggering 77,000 in just 10 years – that rate of increase will be halted and partially reduced by natural wastage and the recently announced early retirement and career break schemes.

The Department of Agriculture has been the focus of particular attention by An Bord Snip Nua chairman Colm McCarthy. Including Teagasc, there are 6,000 staff dealing with just over 100,000 full-time farmers.

The Department of Health, where over 700 staff remain despite the HSE now running the health service, is also on the chopping board. Sources say numbers could be cut by up to a third. Other bodies rumoured to be on the Bord Snip Nua hitlist include: Fás, Fáilte Ireland and the Irish Film Board.

There is also consideration is being given to a re-jigging of government departments. The Department of Community, Rural and Gaeltacht Affairs could be broken up, with 'Gaeltacht' going to Education and 'Rural' moving to Agriculture.

The report from An Bord Snip Nua – along with the upcoming Commission on Taxation report – will form the basis of the upcoming estimates process, likely to prove the most challenging in over two decades.