TAXPAYERS are funding over 2,300 people serving on the boards of state agencies and most of them are political appointees, a new report on non-commercial state agencies has revealed.

Health minister Mary Harney has had 397 board members appointed to the 31 agencies under her remit, the report by Muiris Mac Carthaigh of the Institute of Public Administration (IPA) says.

With annual fees of around €14,000 a year paid to each person appointed to a state board, the total cost to the taxpayer for board members alone, comes to over €32m a year.

This does not include the estimated 12,500 employees in state agencies costing around €600m a year.

Mac Carthaigh makes no mention of fees, but suggests that the average number of board members be cut down from 12 to nine or even six, based on state boards in Australia.

This would cut numbers by 600 to 1,200 and slash the annual €32m bill to €24m or even €16m.

Tánaiste and education minister Mary Coughlan has the next-highest number of plum appointments in her gift, with 333 board members serving on the 26 agencies operating within education.

Although 18 agencies have ceased to exist since 2007, eight new ones have been created in the same period bringing the total down from 259 to 249 today, the report notes.

In October 2008, finance minister Brian Lenihan announced plans to reduce the number of state agencies by 33 and last year Colm McCarthy's An Bord Snip Nua report suggested another 43 could be rationalised.

While Mac Carthaigh notes that more closures and mergers are imminent, so far just 15 agencies have ceased to function.

"Few of the suggested agency-related reforms proposed in the An Bord Snip Nua report have been fully implemented," adds the IPA report.