Cuts of up to €5bn in public expenditure are to be proposed to the Minister for Finance, Brian Lenihan TD, later this week by the group charged with identifying where savings can be made in the public purse.

The Special Group on Public Service Numbers and Expenditure Programmes, which has been nicknamed An Bord Snip Nua, will make over 400 recommendations on where money can be saved in public expenditure, the Irish Times has reported this morning.

The group, which is chaired by UCD economist Colm McCarthy, was set up in late 2008 to review public services staffing levels and spending.

According to the paper, sources say that proposed cuts will target all government departments and state agencies.

The Sunday Times newspaper yesterday reported that the cuts would include proposals to split the Department of Enterprise, Trade, and Employment in two, scrap the Department of Arts, Sport, and Tourism, and reshape the Department of Community, Rural and Gaeltacht Affairs.

According to the Sunday Tribune, social welfare cuts in the order of €1.5bn also form part of Bord Snip Nua’s proposals to Government.

The Minister for Social and Family Affairs, Mary Hanafin TD, yesterday confirmed that her department is working with the Revenue Commissioners to come up with a scheme whereby child benefit payments can be taxed.

The paper has also reported that public-sector numbers could be slashed by 30,000, or 10pc, which would add up to an annual saving of over £1.5bn.

Up to half of all rural Garda stations may also be closed under the Bord Snip Nua proposals and Garda numbers may be restricted to 1,000, the paper suggested.

According to the Irish Times, although the report is due to be presented to the Minister for Finance this week, it is not known whether he will submit it to the Cabinet next week, or later in July.

There is also considerable uncertainty surrounding the question of whether or not the report will be published.