Flexibility and Croke Park


PRELIMINARY SKIRMISHING has broken out between Minister for Public Expenditure and Reform Brendan Howlin and public service trade unions over the terms of the Croke Park agreement as economic growth stalls and savings are insufficient to close the gap between Government income and expenditure. Teacher unions have threatened strike action if their special allowances are touched while Mr Howlin has insisted that some of the 800 special payments received by public servants will have to go.

There is a whiff of a phony war about it all. Mr Howlin and the Labour Party are in broad support of the Croke Park agreement while a majority of trade union leaders regard it as “the best defence against pay cuts and redundancy”. The agreement itself, negotiated in 2010 and valid until 2014, offers no explicit protection for special allowances. In return for flexibility and redeployment, so that both the cost and the number of people working in the public service can fall significantly, it promises no further reduction in pay rates and no compulsory redundancies. Significantly, it recognises that “outdated practices will be eliminated” and implementation is dependent on “no unforeseen budgetary deterioration”. Plenty of wriggle room there.

For months now, a “softly, softly, catchee monkey” approach has been adopted by Labour Ministers. Last December, Pat Rabbitte observed the agreement “may have to be renegotiated”. Then Ruairí Quinn caused a furore when he suggested some teachers didn’t appear to appreciate the gravity of the fiscal crisis. At the same time, Mr Howlin was undertaking a comprehensive review of increments, allowances and special payments. Reassuring noises were made to the effect that only new entrants would be affected. But, last week, some allowances were declared to be “historic” and outside the protection of core pay under the agreement.

Special payments cost the State an estimated € 1.5 billion a year and their reform offers significant savings. Standardisation of rules covering holidays, travel days and other entitlements would also cut costs and improve productivity. As for the annual sick pay bill of € 500 million, Mr Howlin declared it to be unsustainable. These matters are likely to come to a head when details of the “perks” enjoyed by some public servants are published and the public may question if such payments could be justified.

The public is already seeking change, according to last week’s Irish Times/IpsosMRBI opinion poll. Two-thirds of those questioned thought the Croke Park agreement should be either reformed or abolished, with the great majority in favour of reform. It may be reassuring for the Minister to have public opinion on his side in this matter. But timing is everything. With three private sector unions urging rejection of the EU fiscal treaty next month, the Government is unlikely to add to its difficulties by antagonising public servants. Now that the Irish Congress of Trade Unions has chosen to remain neutral, publication of that report on allowances, increments and historic payments may well be delayed.