The treasury intends to fire a third of the workers of the National Insurance Institute (NII). The justification for this appears in the Economic Arrangements Law, which, if approved by the Knesset, contains a clause entitled "changing service concept and streamlining in the NII."

In addition to firing 1,000 workers, the treasury wants to lay off 70 percent of the NII's computer workers - 280 people.

The Treasury proposes outsourcing most computer services to a private contractor. "We're always ready to streamline and improve the service. But the Treasury does not want to streamline, it wants to liquidate," says Eli Sandak, chair of the NII's national union.

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The Treasury's proposal is based on the report prepared 18 months ago by a committee appointed by NII director general, Dr. Yigal Ben Shalom. The committee, whose members consisted of NII workers and external advisors, dealt with improving public service.

The NII has 23 main branches, 16 sub-branches and dozens of service windows. The committee members agreed on the necessity to reduce the number of branches. The branches increased and expanded over the years because the ministers in charge of NII were eager to find jobs for their supporters. Thus, for example, the sub branch in Bnei Brak, which was affiliated with the main Ramat Gan branch, became a main branch a few years ago.

The committee found that the increase of branches harms the service, because in some branches there are only one or two clerks for every sector, such as for old age or children. The committee recommends reducing the branches and providing several service points where the public will be able to submit suits and ask questions. It recommends setting up districts where most of the work would be done, including ascertaining eligibility for suits, approving suits, collecting funds, etc.

The Treasury proposes four districts, closing five branches by June 2008 and cutting personnel drastically.

"We must distinguish between legitimate streamlining and brutal cuts," said a senior NII official familiar with the committee's work. Like many others he believes the Treasury plans to slash personnel so that not enough clerks remain to provide service, leading to outsourcing the service, i.e. privatizing it.

The Treasury proposes that computer work be outsourced already, because the NII operates 130 different technological systems, some of which are 25 years old. The systems are not synchronized, leading to duplication in allocation payments and difficulties in crossing information from various sources in real time.

"In the past, whenever a new system was needed, they brought new workers to set it up and maintain it. After the system was installed, it was impossible to fire the unnecessary workers," the treasury wrote in its proposal.

Today, despite the many workers in the computer units, external advisers are employed at NIS 16 million a year. "Nobody checked whether outsourcing saves any money, or looked into the intolerable dependence on outside bodies this would cause. Every document an NII worker produces a day will cost thousands of shekels to outsource," said a senior NII official.

Ben Shalom also objects to privatizing the computer systems although he has been acting to introduce new systems and computerize service branches.

Ben Shalom is negotiating with the workers' union and has reached an agreement to introduce new technologies and improve service. The union has agreed in principle to the retirement of 200 workers and is negotiating on the retirement plans. Ben Shalom said he hoped the Treasury would cancel the clause when it sees the agreement reached with the union.