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Coalition split over payment of public sector pay increases

FINE Gael and Labour were last night on a collision course over €1,000-a-year pay increases for public sector workers -- with cabinet ministers split on whether to scrap them entirely.

Health Minister James Reilly told the Irish Independent that the Government must seriously consider getting rid of the pay hikes -- days after Public Spending Minister Brendan Howlin stoutly defended them in the Dail.

Dr Reilly's comments are highly significant since he is the minister overseeing the health service, the biggest state employer with around 110,000 workers.

He is also the deputy leader of Fine Gael and is the most senior cabinet minister to question the yearly increments.

Tanaiste Eamon Gilmore has consistently said increments are part of the Croke Park deal -- even though there is no reference to them in the document agreed between the last government and unions in 2010.

They are given to teachers, nurses and guards and most civil servants and are around €1,000 a year per worker -- costing a total of €250m annually.

The payments are mostly awarded for length of service, although performance is also taken into account in some instances.

It comes after a string of Fine Gael backbench TDs criticised the payments as services in key areas of health, education and social welfare were being slashed.

Dr Reilly also fired the strongest government warning shot on the Croke Park agreement, saying it "must be revisited" if it doesn't deliver -- again, days after Mr Howlin defended it against a backdrop of growing disquiet on the Fine Gael backbenches.

In an interview with the Irish Independent, Dr Reilly said the issue of pay rises must be looked at as part of future cuts.

"It has to be," he said. "We have to reduce costs, so I have to reduce the costs of the health service. Some 70pc of the cost of the health service is pay so that leaves me very tight with savings I can make anywhere else.

"I think we have to ask ourselves, genuinely, when there are 450,000 people unemployed and when the country is facing the financial crisis it does face, that those who have a permanent, pensionable job should be seeking to have an increase when our priority should be getting more people back to work."

His position is in stark contrast to what Mr Howlin told the Dail last week.

"I consider that there are fairer ways to control the cost of public pay, given that only a proportion of public servants, in particular lower paid and frontline staff, would be affected by a suspension of increments," the Wexford TD said.

Mr Howlin also reaffirmed the Government's commitment to the Croke Park deal, but said it was contingent on the "delivery of the necessary flexibilities and reforms".

Dr Reilly was much more forthright, and said: "I think if Croke Park has delivered what was required -- fine, but if it hasn't it has to be revisited.

"Any businessman or woman would be doing the same with their business. You have to modify your business plan to the reality that you find out there."

Dr Reilly is also launching an audit of all staff working within the health system to see if different people are doing the same jobs, saying workers will be moved if their job overlaps with someone else.

"We cannot be making painful decisions around community nursing units, around operations, around bed closures unless we're quite satisfied we've got rid of any waste and unnecessary cost in the system."

Irish Independent