Thursday 27 July 2017

Lenihan's top adviser urged pay cut U-turn

Controversial public sector decision was cleared on the day following the Finance Minister's cancer diagnosis

DANIEL McCONNELL Chief Reporter

Finance Minister Brian Lenihan cleared the controversial U-turn on pay cuts for top public servants the day following his cancer diagnosis, a plan recommended by his top civil servant.

Documents released under the Freedom of Information Act and obtained by the Sunday Independent reveal that Ciaran Connolly, Secretary General at the Department of Finance, on foot of intense lobbying from unions that any cuts should take account of money lost as a result of the abolition of a bonus scheme which averaged 10 per cent of salary, recommended that the pay cut should be overturned.

It has emerged that Mr Lenihan signed off on the deal on December 22, 2009. The relevant document from Mr Connolly to Mr Lenihan shows a hand-written clearance by Mr Lenihan on that date, which was only 24 hours after his diagnosis was confirmed.

The next day, the circular memo to the staff informing them of the U-turn was sent.

The files show that Mr Connolly had urged Mr Lenihan to accede to a request from the association for a meeting in advance of the Budget.

"I appreciate the pressures on your time at present but, in view of the position in the Civil Service management structures of the grades which the association represents (and bearing in mind that they are not part of Ictu), I would recommend that you meet a delegation from the association in the next couple of weeks and before any decisions are announced arising from the Review Body's report," he said.

According to the documents, Mr Lenihan was told legal opinion said the performance-related bonus scheme, which the Government scrapped permanently, formed an integral part of remuneration packages.

The documents were obtained by Fine Gael Senator Paschal Donohoe who supplied the information to the Sunday Independent.

He said that the higher members in the Civil Service were given preferred treatment at the expense of the taxpayer and the lower paid public service workers.

"This saga shows that who you know is all that matters for Fianna Fail. If you have the ear of power you can get what you want. If you are a senior civil servant, a large builder, a banker or a State monopoly Fianna Fail will look after you. If you are young, unemployed or just an ordinary worker paying your taxes then there is no place for you in the Fianna Fail-created golden circle," he said.

Mr Donohoe added that in no other walk of life does a bonus become guaranteed.

"In typical Fianna Fail fashion money was thrown around like confetti without any regard to how value for money could be achieved and with no regard to the taxpayer. The losers in this, as always with Fianna Fail, are the ordinary tax payer and lower-paid public servants".

On Budget day, Mr Lenihan announced pay cuts of 8 per cent for assistant secretaries and 12 per cent for deputy secretaries in government departments. He also announced the termination of the performance-related bonus scheme.

However, a fortnight later the Government decided that the extent of these reductions -- which were based on the findings of the Review Body on Higher Remuneration -- should be scaled back on the basis that the cumulative effect of both of these cuts would have been unfair.

The level of the cuts were reduced to between 3.3 and 5.5 per cent after the abolition of the bonus payments was taken into account -- a move which has been strongly condemned by unions for lower-paid staff.

The files also reveal that in the memo which Mr Lenihan cleared, Mr Connolly warned the Minister that there was a risk that the proposed approach to scale back the cuts would "attract criticism from news media or unions representing lower-paid public servants which could focus solely on the reduction in the salary scale while ignoring the reduction through the suspension of the award scheme".

Documents reveal that the Association of Assistant Secretaries and Higher Grades complained in a written submission to the Minister for Finance at the end of October that bonus payments due for 2008 had been retrospectively scrapped. It argued that if further pay cuts were being envisaged then the abolition of the bonus payments for 2008 should be taken into account.

What also emerged in the letters is that on foot of Mr Lenihan's lengthy interview with Sean O'Rourke on January 4, in which he said the move would affect 160 people, department official Oonagh Buckley later issued a memo to say that the actual number would be closer to the "650 mark".

Sunday Independent

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