Friday 21 October 2016

Pay is rising in the private sector, so it’s time that public service salaries follow suit

Brendan Howlin

Published 12/05/2015 | 02:30

The last time there were pay talks which promised a pay increase for public servants was in September 2008
The last time there were pay talks which promised a pay increase for public servants was in September 2008

The last time there were pay talks which promised a pay increase for public servants was in September 2008.

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It has been a long seven years since then.

That pay increase was based on a false premise, namely that the State could afford it. It was cancelled by the Fianna Fáil government less than six months later. After that followed multiple pay cuts, pension cuts and substantial falls in the numbers working in the public service. The latest research indicates that the public service pay premium has all but disappeared.

It is only fair to acknowledge that public servants have stepped up to the challenge that the economic crisis put before them. Despite the reductions in their take-home income, there has been no substantial industrial action in the public service since 2009.

The experience in other countries, of substantial disruption to basic public services because of industrial unrest, simply did not happen in Ireland.

There is a mistaken tendency to take this peace for granted - like it is some kind of given. From my own experience, I know that corporate leaders understand this.

It was also crucial to signal to the international community that Ireland was serious about getting its economy back on track.

But, the mere absence of industrial unrest was not sufficient in itself. We needed our public servants to do more with less. They have.

Even though numbers of public servants fell by 10pc and the cost of employing people to deliver public services fell by over 20pc, the citizens of this country are getting more services.

Last year, 10pc more of our children were being taught in primary schools than in 2007. Nearly 85 million payments were made by the Department of Social Welfare, 23pc more than in 2008. The fire service dealt with over 39,000 call-outs. Millions of payments were made to the Revenue online, saving everybody the time and effort of going to the tax office.

What does this show? That public servants have both common sense and a strong public service ethic. They knew when their country needed them and they have done what their country needed of them.

Let's not ignore the role of their trade union representatives as well. These people were able to change to meet the circumstances, to move from the negotiations that were based on the terrible illusion of social partnership plenty, to the last few years of hard concession bargaining. They have had to prioritise the retention of people in employment over unaffordable rates of pay and conditions. Without those efforts, the last seven years of downturn would have been much worse for everyone in this country.

So as the private sector returns to earnings growth, it is only reasonable that we contemplate the same for public servants.

The FEMPI Acts are real constraints. I have made the point on many occasions about the difficulties in annually renewing an emergency that, mercifully, is on the way out. But having to unwind FEMPI also means that we don't have a greenfield site to reconstruct pay policy afresh. We have to work within its constraints in devising the approach to addressing it.

Public servants have correctly identified that the pay cuts they have undergone are emergency measures and therefore temporary. But we all know that the reductions in the public service pay and pension bill are critical to our financial position and ongoing recovery. We are still borrowing money to pay our way. So in these talks, we need realism about how much the Government can afford. It will not be as much as some might wish, but this is the start of a process that will take a number of years.

It will also have to be accepted that the changes to working conditions under the Croke Park and Haddington Road Agreements are here to stay. Indeed, without them these discussions on reversing some of the painful cuts imposed on public servants under the FEMPI Acts would not be starting.

The changes under the existing agreements mean that, instead of spending all the available money on recruiting more staff to do the same amount of work, we can afford to start the process of restoring the reductions imposed under the FEMPI Acts.

And future productivity growth is essential. Reform is the new normal and will be driven into the future, as it will be in the private sector, by issues like how we use data and information technology to drive further productivity gains. Public servants know that well and will, I believe, rise to those challenges.

This week's talks are a beginning to the process of a sustainable pay arrangement for public servants. I do not know if they will be successful.

But, I expect that all sides to these discussions will meet with the aim and intention of making an agreement that is fair to all involved - those who avail of public services, and public servants themselves - and an agreement that sustains the continuing economic recovery.

Brendan Howlin is Minister for Public Expenditure

Irish Independent

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