Deadline looms large for decision on reductions to public service pay bill

Government to reflect on how €300m in payroll savings can be made, says Kenny

Taoiseach Enda Kenny: “The Government’s door is, and always has been, open to unions and their representatives to make known their views.”  Photograph: Brenda Fitzsimons

Taoiseach Enda Kenny: “The Government’s door is, and always has been, open to unions and their representatives to make known their views.” Photograph: Brenda Fitzsimons

Thu, Apr 18, 2013, 06:00


The time frame for an alternative plan to make savings of €1 billion in the public service pay bill has narrowed with the publication of the revised estimates for the public service for 2013.

The estimates published last night are based on the savings envisaged in the rejected Croke Park proposal and are due to go before a range of Oireachtas committees in June.

With the rejection of Croke Park II, decisions on the nature of the €300 million in payroll savings to be found this year will have to be made before the committees meet.

Fianna Fáil spokesman on public expenditure and reform Seán Fleming said the detail of the Government’s fresh proposals would have to be given to TDs and Senators when they considered the estimates in committee.

“It was a bit presumptuous of the Government to publish the estimates on the basis that the deal had been agreed,” he said.


Absolutely united
Taoiseach Enda Kenny insisted yesterday that the Government was absolutely united behind Minister for Public Expenditure and Reform Brendan Howlin in his determination to find €300 million in extra savings from payroll this year and

€1 billion by 2015.

Mr Kenny added that the Government would consider the outcome of the union ballot that rejected the agreement and would make decisions as to how savings of €300 million could be made this year.

“The Government’s door is, and always has been, open to unions and their representatives to make known their views,” he said.

The Cabinet is to hold initial discussions on the fallout from the unions’ rejection of the deal next week. However, it could be a further week before Mr Howlin brings forward proposals to deal with the impasse.

The Government is adamant that the planned savings on the pay and pensions bill will have to be delivered this year and that the deadline of making savings from July will not be changed.

Sources close to Government said that, while no decisions had been made, they would not rule out some form of re-engagement with trade unions on the savings proposals.

One suggestion that has been floated in the industrial relations world is for some form of “ad hoc group” – possibly composed of a senior trade union figure and an individual with a background in senior public service management – to be established to seek to bring the parties together.

Technically the Government would only have to persuade Siptu and possibly a small number of other unions to change their minds to secure sufficient support on the public services committee of the Irish Congress of Trade Unions to have the deal ratified.

It would not need all of the unions that voted against the proposed deal to change their position.


Allowances and increments
However, one difficulty is that any incentive offered to one group to change its position would have to be at the expense of another.

If it is not possible to get a new deal by agreement, the Government would have to legislate to cut the pay bill. This is likely to involve a range of measures dealing with allowances and increments rather than an across-the -board pay cut.

Over a week ago Mr Howlin made the point that a straight pay cut would require a greater ask to reach the same target as that achieved in Croke Park II.

“Public servants that under this agreement face a gross reduction in pay of say 4 per cent could potentially see that increase to 7 per cent in the absence of an agreement,” he said.

Mr Howlin addressed the Labour parliamentary party on the implications of the union rejection. However, he did not give any firm indications about the Government’s response.

A number of TDs spoke at the meeting, with the prevailing view being that an effort should be made to see what could be salvaged from the rejected proposal rather than any early unilateral action by the Government.

Several speakers expressed a preference for cuts to be restricted, as far as possible, to higher paid public servants as they were in the rejected deal.