Spectre of further cuts without reform raised


ANALYSIS:Ministers hinting at the need for reform in the wake of pay cuts is sure to aggravate unions, writes MARTIN WALL

WITHIN 24 hours of the Budget speech on Wednesday, three Cabinet Ministers had effectively hinted that the implementation of reforms in the public service could be key to avoiding further cuts in pay for staff.

In his post-Budget press conference on Wednesday night, Minister for Finance Brian Lenihan said if everyone agreed that such reforms could save money, “they might have the singular merit of avoiding further cuts in public service pay”.

Yesterday morning, Minister for Social and Family Affairs Mary Hanafin said the next stage for the Government was to secure reforms that were needed to generate long-term savings. “If we can do that, then we will not have to come back again on pay, and we look forward to working with the public sector unions on that.”

And later yesterday the Tánaiste, Mary Coughlan, suggested that some of the savings and changes in work practices envisaged as part of the reform programme would “provide the wherewithal in which we would not have to go back to the public service for more reductions”.

The remarks by the three Ministers appeared to represent the first response from the Government to the attitude of the trade unions – that the Government could forget about public service reforms in the aftermath of the new pay cuts announced in the Budget.

The Government appeared to be saying that following a suitable “grieving” period after the pay cuts, the public sector unions should re-engage in talks on implementing a transformation agenda if the possibility of further reductions in earnings was to be avoided next year.

Where the unions had previously offered the prospect of public sector reform as a prize if the Government did not cut pay levels, the tables seem now to have turned with Ministers effectively raising the spectre of further cuts if such reforms were not delivered.

If this indeed is the Government’s strategy, it adds a new dynamic to an already fraught industrial relations situation in the public service.

Yesterday, general secretary of the Irish Congress of Trade Unions (Ictu) David Begg suggested that if the Government’s position was that staff should reform or face further pay cuts, “it would be like throwing petrol in the fire”.

As part of the failed talks with the Government last week on an alternative programme for reducing the public sector pay bill, the unions had agreed on widespread reform in the various sectors of the public service – health education, local authorities and the Civil Service.

The proposed deal included specific agreement on the redeployment of civil and public servants, within and between organisations. There was also provision for long-sought changes such as the introduction of an extended working day in the health sector. The unions maintained that this could allow for longer opening hours and for increases in day care, community health services, outpatient and diagnostic capacity.

The unions also maintained that the deal would have seen the introduction of shared services in areas such as 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, and supervision and substitution arrangements would have been improved.

However, this reform programme, which was to come into effect from 2011, was subject to an overall deal with the Government on maintaining pay and pension levels.

When the Government rejected this proposed agreement – partly on foot of the backbench revolt over the controversial 12 days’ unpaid leave proposition – the reform proposals also fell, and there is now no appetite on the part of the unions to revisit the transformation agenda any time soon.

Earlier this week, Health Service Executive management wrote directly to all staff in the organisation indicating that it wanted to re-engage in talks on the draft reform blueprint agreed in the recent talks. However, the unions rejected the idea out of hand.

The trade unions had warned of a “long and sustained campaign of industrial action” if pay cuts were imposed by the Government in the Budget. However, the nature and timing of such action is not yet known.

Various trade unions are meeting in the different sectors to draw up proposals on the type of action that should be carried out. The executive of Ictu is expected to consider this issue at a meeting next Wednesday.

Options under consideration at the moment include “short, sharp strikes” which could rotate throughout the public service.

However, the one area that all the unions seem agreed on is that there will be no co-operation with the reform agenda.

On Wednesday evening, in the aftermath of the Budget, general secretary of the Teachers’ Union of Ireland Peter MacMenamin bluntly stated: “Any transformation agenda is dead in the water in the current climate.”

However, for public service management, reform is not an optional extra. Given the moratorium on recruitment, employment levels will continue to fall sharply, and management in various sectors believe that redeployment of staff will be critical if services are to be maintained in the months and years ahead.

However, while the initial reaction to the pay cuts could involve short, sharp strikes aimed at causing disruption, the real flashpoint could come if management seeks to impose change on unions and staff already smarting from the pay cuts.

Martin Wall is Industry Correspondent