Cowen warns pay cuts may be needed to tackle deficit

IPA CONFERENCE:TAOISEACH BRIAN Cowen has signalled that pay reductions in the public sector could be back on the agenda for the Government as it attempts to deal with the budget deficit next year.

Speaking at the annual conference of the Institute of Public Administration in Dublin yesterday, Mr Cowen said the Government had to look at “all of the options” that would minimise the impact of unavoidable spending reductions on public services and public service jobs.

He said that flexibility, redeployment and other productivity measures being pursued with the trade unions were essential to protect services. Moreover, he added that “there must be a recognition of the need to generate the scale of expenditure savings required in the necessary time period”.

Asked about the possibility of public sector pay cuts, the Taoiseach said that given “the scale of the problem before us, nothing is excluded in relation to consideration by Government. We are open to listening to everyone . . . but that does not take away for a moment that there is a job to be done that we will have to discharge and do”.

He said there had to be change in the way that the public service conducts its business. At a time when exchequer spending is being curtailed, a “business as usual approach” of trying to deliver services in traditional ways was impossible.

The reduction in staff numbers as a consequence of the recruitment freeze, and the Government’s early retirement and career break schemes, was a further impetus to the need to seek greater flexibility and productivity in all areas, he said.

In this regard the public service was no different from its private sector counterparts facing a crisis in their business, Mr Cowen added.

“Neither I nor the Government are prepared to accept, nor are the public, that our first or only response to expenditure restraint is to discontinue or disimprove services when the full potential for greater efficiency has not been achieved.

“We need strategies to mitigate the effects of expenditure restraint and these must involve doing things differently,” he said.

Mr Cowen again said he wanted to secure the change agenda in the public sector through the social partnership process.

He also said that public servants, at all levels, had already demonstrated a capacity for change.

The Taoiseach added that he wanted to stress the genuine willingness of the Government to work with the public service unions to achieve the desired changes.

He also noted the Coalition’s willingness to work with unions when addressing the need for swift arrangements to resolve any disputes where they might arise.

Mr Cowen said that talks with the public sector unions were ongoing on developing a framework for managing industrial relations and change. “Clearly, we have a mutual interest in maintaining public services to the highest standards possible. It is only quality services – that the public is willing to continue to pay for and support – that will sustain the public service tradition into the future.

“I believe that our unions recognise the scale and difficulty of the challenges facing the Government. That there is an acceptance that the public service cannot be insulated from the experience of the wider economy, and an acknowledgement that the public service must be seen to make its fair contribution to recovery,” he said.

Mr Cowen also said that the proposed new senior public service process – which would identify future leaders and provide them with experience across various aspects of the public service – would be introduced in the Civil Service before the end of the year.

“I believe the issue of leadership needs to be addressed at all levels in all organisations and sectors if we are to realise the scale of transformation required. We also need to reinforce a common public service identity and values so that we get the co-operation across boundaries that is needed for a renewed focus on outputs and outcomes.