Sunday 24 September 2017

New Croke Park targets €1bn savings in public sector

Public Expenditure Minister Brendan Howlin
Public Expenditure Minister Brendan Howlin

Fionnan Sheahan, Political Editor

PUBLIC sector workers face longer working days and less overtime as the Government seeks to cut its pay bill by €1bn in a new Croke Park deal.

But a pay cut will not feature in a new public sector reform deal to ensure unions are on board with the guarantee of no wage reductions for three years. Although allowances and increments are not excluded from talks, it is thought unlikely there will be any fresh developments there.

Aside from core pay, compulsory redundancies will also be off the table.

The Coalition is to enter talks with the trade unions next week on getting more out of the Croke Park Agreement and a successor deal aimed at extending it.

The Government wants to bring in changes from next year that will build up to €1bn worth of savings a year by 2015.

Increasing the number of hours

worked opens up savings on:

- Overtime.

- Premium pay.

- Agency workers.

- Payments being bought out.

- Downsizing faster.

- Reducing the number of workers.

The talks are expected to see the Croke Park deal extended by two years to 2015 with the unions guaranteed no pay cuts.

The current deal will continue until negotiations are completed in the spring. But the Government will include some additional savings from the new deal in its budget figures.

The deal will focus on increased working hours and productivity to cut the cost of hiring outside workers, redundancies, flat-rate overtime and centralisation of services.

The Government's plan to enter new talks with the unions was revealed in the Irish Independent a fortnight ago.

Public Spending Minister Brendan Howlin briefed his cabinet colleagues on his plans to get more savings and productivity from the public sector.

The Government has invited the unions to talks, with negotiations expected to start next week. Ministers and officials believe unions will want the certainty of no pay cuts.

Coalition sources said cuts to core pay and compulsory redundancies won't end up in the final deal.

"Everything else is on the table. It would be harder to conceive if across-the-board pay cuts were there. You have to have something for the unions to sign up to. Without those two core commitments, that would be difficult to do," a government source said.

The unions are expecting substantial changes to conditions, but sources say a pay cut would be rejected.

"We're going to have to go into negotiations knowing whatever comes out will have to go to ballot," a source said.

Union chiefs will meet at lunchtime to discuss Mr Howlin's move. The ICTU Public Services Committee is expected to accept the invitation.

Trade union IMPACT welcomed the move. In a letter to IMPACT branches, general secretary Shay Cody said his members would benefit from an extension of the protections "in light of the very difficult economic and budgetary forecasts.

"The union will go into any talks with the objective of protecting members' pay and pensions against further cuts, and protecting against the future imposition of compulsory redundancies. Achieving success will mean agreeing to measures that cut the public service pay bill in other ways," he wrote in a letter.


Department of Public Expenditure and Reform secretary general Robert Watt the discussions would "seek agreement on additional reductions to the overall pay and pensions bill and on a set of measures to further improve productivity".

Writing in the Irish Independent today, Mr Howlin said he has made no secret of the fact that the public service pay and pension bill, at 35pc of spending, will need to make a substantial contribution to this challenge of restoring the public finances.

"I have been clear in my ongoing dealings with public service unions that, notwithstanding progress under the agreement, difficult challenges lie ahead," he said.

"I have indicated that further productivity and cost extraction measures, not envisaged under the current agreement, will be required to secure a further €1bn reduction."

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