CENTRAL BANK governor Prof Patrick Honohan has suggested the Government could achieve savings in public sector costs by “adjusting” pay scales rather than cutting jobs and encouraging early retirement.
His suggestion in a speech last night is likely to get a frosty reception from public sector unions but will fuel the debate before a review of the Croke Park agreement on public sector pay and conditions next March.
Prof Honohan said that while there could be little or no choice in the amount of Government borrowing, within the parameters of the bailout there was scope for alternative decisions. “To take just one topical area, Ireland itself chooses to what extent the necessary reduction in the salary cost of public services is achieved by way of reducing numbers (whether through early retirements or otherwise), and to what extent by adjusting some pay scales.”
Last night, it emerged that over 7,700 public servants had applied to retire by the end of February to qualify for their pension and lump sum being based on their salary before pay was cut in 2010.
Prof Honohan sits on the governing board of the European Central Bank which, with the European Commission and the International Monetary Fund, forms the troika providing Ireland’s bailout.
Opposition TDs described the Government’s strategy as a “mess” and called on it to publish its plans to plug staffing gaps in key areas such as health and education.
The difficulties caused by the retirement of key civil servants were highlighted yesterday when it emerged that Director of Corporate Enforcement Paul Appleby is leaving under the scheme. Later yesterday, Mr Appleby, who has responsibility for the four-year investigation into the former Anglo Irish Bank, agreed to stay on for six months until a successor is appointed. The pay and conditions applying to his extra stint were being worked out last night.
Minister for Public Enterprise Brendan Howlin, who had expressed surprise at Mr Appleby’s departure, welcomed his decision to stay on.
“The Government is very anxious and determined to ensure that the inquiries being carried out by his office carry on in a seamless fashion and come to a conclusion,” he said.
Mr Appleby’s decision not to leave immediately followed a meeting with Minister for Enterprise Richard Bruton on Monday, and a Cabinet discussion yesterday. “The Minister pursued a number of options with Mr Appleby at their meeting and raised it at Cabinet, where it was clear there was an appetite for a solution,” said one source. Others leaving under the scheme include Comptroller and Auditor General John Buckley, about 3,500 health sector workers and over 2,000 in education.
A Government spokesman yesterday rejected criticism of the early retirement scheme but acknowledged there would be challenges in midwifery and teaching: “No matter what system was devised, you’d have difficulties during the initial period.”