Government sacrificing reform on altar of pay cuts

 

OPINION:The trade unions’ offer of public sector reform was a no-brainer but the Government just wants to drive down wages, writes PETER McLOONE

THE GOVERNMENT’S decision to reject the deal on offer from the public service unions last week revealed that its determination to drive down wages – for all of us in the private and public sectors – is the unshakeable cornerstone of its economic and social policy.

For all its fine words about the need for “transformation”, it is now abundantly clear that depressing incomes is far more important to this administration than protecting and developing public services as staffing and resources inevitably fall.

When the dust settles, it will emerge that the Government has turned its back on a deal that would have delivered a massive transformation in the delivery of public services far beyond anything previously contemplated - let alone achieved - in this state. And it would have met the Taoiseach’s and Minister for Finance’s stated aim of reducing payroll costs by €1.3 billion in 2010 without any disruption in services.

It sounds like a no-brainer. But it would also have avoided a second public service pay cut in less than a year. The Government was not prepared to go there because, like the employers’ organisation Ibec, it believes that slashing public service pay is an essential precondition to driving down incomes across the economy. The next target will be the minimum wage.

Given the enormity of this decision, it’s conceivable that the Government deliberately chose not to explain what was on offer to its backbenchers, whose ill-informed - but understandable - fears seemed, on the face of it, to have scuppered the deal.

They were left believing that the temporary measure of unpaid leave, which was effectively a lay-off constructed to avoid disruption to services, would have closed schools and hospital wards.

Yet Ministers knew well that the proposal on offer contained a guarantee that unpaid leave would have no impact on services – including the school year and classroom contact with teachers. Managers would have had control over the timing of the leave and, in cases where it might otherwise have been disruptive, could have spread it over six years while accruing all the savings in 2010.

But the emphasis on this temporary tool – necessary because medium-term savings would not accrue in 2010 – has been allowed to obscure the real prize of a public service transformation that would have saved billions while protecting, and in some cases extending, public services as resources and staff numbers declined over four years.

The savings would have come primarily through staff reductions, which will be the inevitable, permanent and calculable result of the Government’s ongoing recruitment embargo and other policies like the rationalisation of State agencies.

The vision that we offered the Government was one where, in exchange for guarantees over pay, pensions and compulsory redundancies, staff would deliver the massive changes in work practices required to ensure that these falling staff numbers would not damage services.

The proposed deal included explicit agreement on the redeployment of civil and public servants, within and between organisations, to ensure better services as budgets and staffing declined.

Long-sought changes like the extended working day, which would deliver more flexibility and longer health service opening hours, were there for the taking. So were increases in day care, community health services, outpatient and diagnostic capacity.

The deal would have seen the introduction of shared services in areas like finance, procurement, human resources and payroll across health services, local authorities, education and the Civil Service. Competitive and merit-based promotions would have been extended to the last remaining areas of the public service, new procedures for redeploying surplus teachers would have been introduced, supervision and substitution arrangements would have been improved.

Staff co-operation with the restructuring and rationalisation of VECs and State agencies would have been guaranteed, better management and standardisation of annual and sick leave would have happened, and better Civil Service opening and closing times would have been introduced.

These are just some examples of the detailed changes that we tabled for the health services, education, local authorities and Civil Service – all as Government spending decreased. But the deal floundered because the Government reneged on its earlier agreement that the temporary measure of unpaid leave could enable us to get through 2010, before the transformation programme began to yield big savings.

By scuppering the deal, the Government has chosen conflict over a revolutionary approach to reform. Brian Lenihan is now likely to carry out his threat to impose a second public service pay cut in tomorrow’s Budget, as a prelude to a concerted attack on pay rates across the economy.

The unions yesterday decided to co-ordinate a sustained campaign of action against the pay cuts in each sector of the public service. Details of this will emerge in the coming days. In the meantime, it is absolutely inconceivable that public servants will rally to public service reform after the Government had rejected this extraordinary deal because of its determination to impose pay cuts, which could now total as much as 15 per cent in less than a year.

The prize of radical public transformation, with better services and billions in savings, has been sacrificed on the altar of deflationary pay cuts across the economy.


Peter McLoone is chairman of the Irish Congress of Trade Unions’ public services committee, and general secretary of Impact, the largest public sector trade union

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