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Crucial new talks to squeeze more from Croke Park deal

THE Government will enter intense talks with unions on further changes to the Croke Park Agreement early next year, the Irish Independent understands.

But there are unlikely to be pay cuts as the Government tries to squeeze the public sector for more productivity and other ways to reduce the pay bill.

Among the items on the table are increased working hours and productivity -- to cut the cost of hiring outside workers -- targeted redundancies, flat-rate overtime and centralisation of services.

While the pay bill will be on the agenda for the new talks, the unions will be desperate to avoid any straight pay cuts for their members.

The talks have been dubbed 'Croke Park 1.5' by an insider, because the Government won't yet be tackling a full successor to the current deal.

It needs to squeeze even more savings out of public sector reform -- but it won't be a Croke Park II successor to the deal.

Instead, the new deal is being described as an "addendum" to the current agreement.

A minister said: "It would be an add-on to the existing Croke Park. It's to avoid the pay cut but to really squeeze it to the nth degree."

The Department of Finance signalled that a tougher Budget was on the cards as a result of the reduced forecast for economic growth next year.

The cut in the growth rate will place even greater pressure on the public finances.

Ministers say that the public sector pay bill will have to be addressed, particularly if the growth levels do not match up to expectations.

The savings to be identified from the talks would not just be from pay.

"There are pressures there that are going to have to be faced -- not just in 2013. As we go forward into 2014 and 2015, public sector pay will have to make a greater contribution.

"The pressures ratchet up in 2014," a senior government source said.

Within government circles, it is expected that there will be some back-channel contact with the unions before the Budget to flag the forthcoming financial problems.

But negotiations won't actually begin until next year.

A minister said: "There hasn't been huge engagement on this yet. Next year, we will try to do something with the unions. You're looking at the first quarter of next year."

An industrial relations source said: "There may be an engagement between now and the Budget about what parameters a restructuring might involve. But there won't be anything substantive until about March. They don't want to call it Croke Park 2."

Ministers are expecting "serious engagement" with the unions in the first quarter of 2013. A minister said: "Pay will be on the agenda. But you're not necessarily talking about a pay cut. You can argue for productivity."

Ways of cutting the public sector pay bill include employing fewer contract and agency workers.

A redundancy programme, already flagged by Public Spending Minister Brendan Howlin, is also on the way.

But the only way seen as a means to achieve the figures that are needed to bring down the number working in the public sector is by "targeted redundancies".

In particular, the Government will go back to the group of people who expressed an interest in leaving the public sector earlier this year as part of the early-retirement scheme, but who then pulled back.

Taoiseach Enda Kenny ordered ministers recently to dig down into the agreement to come up with elements of the Croke Park deal that can be implemented quickly.

Irish Independent