THE government is considering creating a new Department of Economic Planning and merging the departments of Transport and Environment as part of a major overhaul of government depart­- ments in the wake of the report of An Bord Snip Nua.

The creation of a new economic planning department is not without precedent – Jack Lynch created a Department of Economic Planning and Development in 1977 only for Charles Haughey to abolish it when he took over as Taoiseach at the end of 1979.

The creation of such a department would likely be opposed by the Department of Finance, which would in­evit­ably regard it as a dilution of its influence. However, advocates of the move say it would allow for better long-term planning of the economy to avoid the type of 'boom-bust' scenarios experienced by the state over the past 30 years.

The logic behind merging Transport and Environment would be to have one department to focus exclusively on infrastructure projects.

Senior government figures stressed that talks on a re-alignment of the departments was not at an advanced stage but admitted "there is some talk" about a new economic planning department and a merger of Transport and Environment.

The realignment would likely involve the abolition of the Department of Community, Rural and Gaeltacht Affairs, with Gael­tacht being transferred to Education and the 'Rural' sector going to Agriculture. There is also speculation about a souped-up Enterprise department, which may also encompass parts of the Department of Energy.

No move will happen until next year, as the government's focus for the remainder of 2009 will be on Nama, Lisbon and the Budget.

However, assuming the government comes through that period, Taoiseach Brian Cowen may move to realign the departments and also use it as an opportunity to shake up his cabinet, with Éamon Ó Cuív and Martin Cullen regarded as the most vulnerable ministers.