France could launch voluntary redundancy plan for government employees

By Jean-Baptiste Vey and Michel Rose

PARIS (Reuters) - Some French government employees could be offered voluntary redundancy as President Emmanuel Macron pursues plans to shrink the state in a country with one of the highest public spending ratios in the world.

Spelling out for the first time since Macron's election last May how he aims to modernise public administration, Prime Minister Edouard Philippe said the government would have no qualms about shaking things up, even if it encounters resistance.

"There is no doubt we may hurt some sensitivities, some situations we got used to," Philippe told a news conference to present a first review of public spending.

"But you can't fix a country, you can't aim high, without being aware that you must shake and change some of these situations sometimes."

His budget minister Gerald Darmanin said a voluntary redundancy plan for government employees could be envisaged, although he gave no details or timing for the plan.

"It wouldn't be a voluntary redundancy plan for everybody, of course. It would be a way to adjust our public services," he said.

The review is the first attempt to detail how Macron aims to cut public spending by 60 billion euros -- or 3 percent of economic output -- over the term of his mandate as promised.

The redundancy plan shows how the former investment banker, who also wants to increase the use of merit-based pay for civil servants and put more government workers on private sector contracts, intends to instill a more corporate culture.

Previous governments have preferred to use the bump in baby boomers' retirements to reduce headcount by not filling every vacancy. But payrolls still account for more than a third of the central government's total spending.

Philippe, the former mayor Macron poached from the ranks of the conservative party, also said the French will be able to fill out 100 percent of official forms online by 2022, while the government would also train employees to act as advisors rather than form fillers.

The philosophy behind the government's plan was to digitalize most technical and repetitive tasks in the different layers of bureaucracy, Philippe said.

All companies will be able to bid online for government tenders from Oct. 31 this year.

But Philippe and Darmanin provided few details on where the axe would fall.

Legislation spelling out the plans will be ready by the start of next year, after consultation with civil service unions, Philippe said.

The government was warned last month by the independent audit watchdog that it was still a long way from redressing the situation in its public finances and should not wait for the end of its mandate to spell out spending cuts.

Macron said during his campaign he aimed to cut the number of government employees by 120,000 over five years, including 50,000 for the central government.

More than 5.5 million people are on government payroll, including the central government, local authorities and public hospitals.

(Reporting by Jean-Baptiste Vey and Michel Rose; Editing by Leigh Thomas and Catherine Evans)