TAOISEACH BRIAN Cowen has indicated that Government plans to cut the public sector pay bill by €1.3 billion will take immediate priority over long-promised reform of the public service.
Mr Cowen yesterday outlined his view that fundamental reform of the public sector was urgently required but said its implementation was a medium to long-term goal.
In the wake of an interview given by the Taoiseach yesterday to RTÉ, Government sources emphasised that his views on reform could not be interpreted as any softening of the stance by Mr Cowen over cuts in the December 9th Budget.
The sources said Mr Cowen and Minister for Finance Brian Lenihan were “ad idem” that cuts in the public sector pay bill must make up €1.3 billion of the €4 billion reductions sought in State spending for 2010.
Mr Cowen said the Government needed to look at all areas of reform, including productivity and pay policy, but also stressed the Government needed to reduce its outgoings now.
He said he would be willing to examine “all of the levers that are available to us, including numbers, the whole system of allowances, all of the various issues that are involved in different sectors. We have to review all of that and do it in a way that gives us the best outcome.
“That is a medium to long-term process. The immediate process is obtaining the monies,” he said.
He said the reform plan was not an attack on or hostile to public services. “It’s about making sure that we have provision of public service in the future that is affordable, efficient, effective and that is joined-up. And that we get rid of all of these administrative boundaries that are providing costs and compensation factors right across the system.”
Talks between the Government and trade unions are due to take place in the coming days.
Government officials are due to produce greater details of savings in the public sector pay bill to date, a vision for the size and scale of the public service in the future, and a menu of options for generating €1.3 billion in cost reductions next year.
Highly-placed sources said last night that a response from the Government to these three areas would form the basis of the talks.
The talks centre on producing an alternative to securing savings by cutting pay for the 300,000-plus staff in the public service. The alternative plan, which has been under discussion, would involve significant reform of the public sector from 2011 including substantial job reductions as well as “bridging mechanisms”.
Some of these could be of a temporary nature, and would be introduced in the budget to achieve the €1.3 billion in savings sought by the Government next year.
These “bridging mechanisms” are a code for cutbacks, although the details have not yet been proposed.
Government officials have already said that around €2.3 billion has been saved to date as a result of the moratorium on recruitment, the non-payment of pay increases under the national agreement signed last year and the introduction of the pension levy. Union leaders have sought these savings to be strongly highlighted by the Government side.
The Government has also indicated that if the moratorium on recruitment was continued up to 2013, and in the absence of an overall public service reform plan, there could be 25,000 fewer staff on the State payroll.
The unions are looking for the Government to produce a credible and comprehensive reform plan for the public service over the coming five years.
Any such reform programme is expected to begin generating savings from 2011. In the interim, cost-reducing measures for next year will be required.
The general secretary of the Irish Congress of Trade Unions, David Begg, said yesterday that unions did not have to protect every existing working practice in the public service.
He said that the best defence of public services is to have them as efficient and as effective as they can be to a point where people will never wish to see them changed.