'Different approach' may be needed

The Government may have to take a different approach to public sector reform if it can not achieve a reduction in staff numbers or standardise working hours under the Croke Park agreement, employers lobby Ibec said today.

Speaking about the first official review of the agreement on public service pay and reform, which found "solid and measurable progress" had been made, Ibec policy director Brendan Butler said the biggest challenges were still to come.

"Significant further savings are required and these must be made, while at the same time protecting services to the public and business," he said.

Ibec said that getting the economy back on track required "a major reduction in public spending".

"In many areas far-reaching reform is still needed as a matter of urgency, including the need to reduce staff numbers, redeploy staff and standardise working hours. If this cannot be achieved on a voluntary basis, the government will have to take at a different approach," Mr Butler added.

Small and medium enterprise group Isme said the pace of reform was too slow and that the level of savings to date was "negligible in comparison to what is urgently required to address the exchequer deficit".

"It is still the view of the Association, particularly with the deterioration of the budgetary position, that the Croke Park Agreement should be scrapped," Isme chief executive Mark Fielding said.

"Savings of €600 million to date and a reported reduction in employment numbers of 5,349 since the deal was introduced, do not come anywhere near the level required."

Unite trade union, which represents 6,000 public sector workers, offered a cautious welcome to the review and said there were "hidden dangers" in downsizing services.

"This first annual report into the progress of the Croke Park agreement shows that savings have been achieved and services maintained largely through workers taking on additional responsibilities at the same time as their pay has been reduced," said Unite regional co-ordinator Walter Cullen.

"The maintenance of public services is critical for everybody in society. The danger highlighted in the report is in how long this maintenance of service can last in the face of deepening cuts."

Chambers Ireland said while the savings achieved to-date under Croke Park are to be welcomed, more needs to be done to reduce the public sector pay bill.

"Given that 65 per cent of companies have cut costs by focusing on headcount reductions and working time cuts, even more will be needed to close the gap in government finances," said Chambers Ireland deputy chief executive Séan Murphy.

"This could be achieved by tackling additional charges on top of core pay – e.g. overtime and shift allowances, pension costs, pausing all incremental payments for a minimum of two years and ensuring greater flexibility," he added.

Fianna Fáil spokesman on public sector reform Sean Fleming  said employees in the public service, trade unions and management had brought about substantial savings, efficiencies and reform in the running of the public and civil service.

He said the deal, agreed while Fianna Fail was in government, had its doubters but had brought about €600 million in savings, efficiencies and reforms.

Mr Fleming said he feared front-line services would come under threat if Minister for Public Expenditure Brendan Howlin moved to further reduce the numbers employed in the public sector, which went far beyond the Croke Park agreement.

"It is essential that the minister does not undermine an agreement that is producing results," Mr Fleming said.