Allowance cuts backlash puts Howlin in a spot

ANALYSIS:WHEN IT was put to Minister for Public Expenditure and Reform Brendan Howlin that he had failed to meet his own target of €75 million in savings on public sector allowances, he dismissed the criticism as "crude" and simplistic.

“People get fixated on a tree while I’m trying to control a forest,” he said on RTÉ yesterday.

The political problem for Howlin is that it was he who identified that particular tree for felling and roared the chainsaw into action in his speech at budget time last December. He promised a 5 per cent saving (€75 million) from the total €1.5 billion allowance budget in 2012, twice that (€150 million) in 2013 with a further €150 million in 2014.

His explanation yesterday: it was only an indicative target so not achieving it was not as serious as was suggested. He said that when his department began to “drill down” – civil servant speak for “examine in detail” – the allowances, they discovered that many should have been classified as core pay. Be that as it may, many others weren’t. There are scores that are difficult to justify in the current economic circumstances, and arguably under any circumstances.

Why did Howlin not pursue these with the machinery that was available to him under the Croke Park agreement? His explanation: “I could have referred them all. That would have taken the full time of the Labour Court and that division of my department for the next year to achieve very little.”

But, as Impact’s Shay Cody confirmed at the weekend, unions were bracing themselves for – and even seemed prepared to accept – some cuts in allowances. The reasons behind the total abandonment of the target needs to be explained – were other unions privately more truculent? It is clear from the statements of several Ministers that the Government decided not to cut allowances for fear it would jeopardise the Croke Park agreement.

“The Minister [Howlin] took the view that it would be a breach of Croke Park, even though €70 million would have been saved by it,” said Leo Varadkar at the weekend.

No matter how the Minister for Public Reform has painted his detractors, the figures last week spoke for themselves: less than €3.5 million of the €75 million achieved; only one of 1,000 allowances abolished.

The department disclosed no information as to how much each individual allowance was costing the exchequer or how many people availed of each.

A week later, the tide has yet to ebb on the controversy. There was the spectacle of the angriest display of defiance mounted by Fine Gael backbenchers since the formation of the Coalition.

One of their number, Eoghan Murphy, has succeeded in making it a major issue for the Public Accounts Committee, the public spending watchdog.

It is also clear that Government anticipated a backlash over allowances and came up with an alternative plan; that is to “accelerate” the reform process in the Croke Park agreement and to “squeeze” the maximum savings from each Government department.

The Taoiseach ordered all Government departments to report to him by last Friday with their suggestions.

He and Howlin will outline those findings to the Croke Park implementation body “soon”. That body will incorporate the recommendations into a revised agenda for the agreement between now and its completion in 2014.There is no indication of what will be done, when it will be done, and what outcomes will be achieved. The Government will need to show tangible figures for savings by budget time, not least to assuage a growing group of Fine Gael backbenchers who are deeply unhappy with Howlin’s public reform agenda.