Coalition seeks €1bn savings in new public sector deal

The Government is seeking to save €1 billion over the next three years in a new deal on reform and productivity with the public service unions.

Minister for Public Expenditure and Reform Brendan Howlin yesterday invited the unions to talks designed to achieve, by agreement, further substantial savings in the public service pay and pensions bill. The Government is hoping accord can be reached by early in the new year.

Unions expect one of the main changes the Government will propose is longer working hours for staff with no additional pay. Other issues such as increments, premium pay rates and possibly reforms to existing grade structures could be on the agenda for the discussions.

Senior higher-paid staff who already work flexible hours could face cuts in their overall pay levels. Earlier this year, the Health Service Executive proposed staff should work two additional hours per week for the next three years.

The Government said yesterday the guarantees set out in the Croke Park agreement, no further cuts in core pay and no compulsory redundancies, would remain in force.

Government sources emphasised that savings of €1 billion in the pay and pensions bill were required by the end of 2015 “to meet the fiscal challenges” demanded by the bailout programme.

No precise details

However, the Government side declined to spell out precisely the nature of the reforms to work practices and the new productivity measures it would be seeking.

The Department of Public Expenditure and Reform said the Government would be seeking to secure “a significant advance” on the workplace change already delivered by public servants, and “a large sustainable additional fall in the cost of public service delivery in the period to 2015”.

“The Government is determined to meet its fiscal consolidation targets and reduce its deficit to less than 3 per cent by 2015. The gross public service pay and pensions bill accounts for 35 per cent of overall spending in 2012. On this basis, the Government considers that it is fair that it should contribute broadly one-third of the substantial expenditure consolidation that will be necessary over the next three years,” said the department.

It added that if the public service pay and pensions bill was to make the necessary contribution to the consolidation in expenditure necessary up to 2015, a new deal, setting out a new agenda for change and productivity, was necessary.

“The Government will also be seeking to secure an additional substantial reduction in the cost of public service delivery, including in 2013, through this process. We want to secure a significant evolution on the workplace change already delivered . . .” it said.

Union reaction

The public services committee of the Irish Congress of Trade Unions is to meet today to consider the Government’s invitation to talks on a deal. The largest public service union, Impact, will argue this should be accepted. Other unions were more cautious.

In a letter to Impact branches yesterday, union general secretary Shay Cody said members would benefit from an extension of Croke Park protections in light of dark forecasts.“The union will go into any talks with the objective of protecting members’ pay and pensions against further cuts . . . Achieving success will mean agreeing to measures that cut the public service pay bill in other ways.”

General secretary of the Civil Public and Services Union Eoin Ronayne expressed concern over whether lower-paid workers could achieve further cost savings.