Monday 23 October 2017

Public workers face big changes to avoid pay cuts

Minister for Finance Michael Noonan and Minister for Public Expenditure Brendan Howlin speaking at the 8th Troika Review Press Conference. Photo: Steve Humphreys

Fionnan Sheahan Political Editor

PUBLIC sector workers face a huge overhaul of how they work if they want to avoid pay cuts in any new Croke Park deal, the Irish Independent has learned.

Further difficult changes to work practices in schools and hospitals would be identified as areas where greater efficiencies can be achieved in any deal.

The Government would dangle the carrot to unions of limiting pay cuts by agreeing to genuinely radical public sector reform in any new or revised Croke Park agreement.

The prospect of the existing Croke Park deal, which runs to mid 2014, being revisited was mooted by a senior industrial relations figure at the weekend.

And a Croke Park II deal has also been flagged in Government circles.

The coalition places a high value on industrial relations harmony and appears determined to see out Croke Park.

Although some Fine Gael TDs are already talking up pay cuts being the first item on the agenda in any new negotiations, senior Government figures say a successor or revised deal would be primarily about reform.

"Croke Park is working. The alternative is going back and just cutting pay. The unions don't want that," a senior Government source said.

Avoiding a pay cut would be a big ask, especially in a brand new deal, but won't be the starting demand in negotiations, a senior coalition source said.

Reforms put forward in negotiations would be "difficult and painful" and would result in significant public sector cost reductions.

"The focus should be on doing things that get costs out, while still providing and enhancing services. It's about using the next three to four years to bring about durable, long-lasting reform," the source said.

The unions are so desperate to avoid a third pay cut for their members that the leadership has "not baulked" at the recent round of measures put to them under the existing Croke Park Agreement.

In fact, some government figures identify middle management, particularly in the HSE, as the main obstacle to reform.

"The biggest challenge is managers. Managers not recognising what the system should be doing and not doing the restructuring. You're talking about the civil service, HSE, some local authorities," a government source said.

However, it is still not clear if there will be a Croke Park II to succeed the current deal, which runs out in June 2014.

The existing Croke Park commitment to not cut pay is under severe threat from the forthcoming Budget.

Though there is a desire within the Government to see the deal through, there is also a realisation that finding the €3.6bn in cuts and taxes at the next Budget will be extremely hard if the trio of commitments to not cut social welfare rates, not hike income tax and stick to Croke Park are kept to.


Labour Relations Commission chief executive Kieran Mulvey has said the Croke Park Agreement may have to be revisited.

Mr Mulvey said it did not necessarily mean Croke Park would not last until June 2014.

However, he feels the initiative by the Government in the recent months and the response of the unions probably indicates that the agreement will be revisited.

Mr Mulvey said there won't be a Croke Park II but expects the existing deal to be revitalised to change it into a more deliberate agreement over the next year. The LRC chief executive said other governments like Greece, Spain and Portugal would "love to have" a Croke Park Agreement.

Last week, Public Expenditure Minister Brendan Howlin insisted the EU-IMF bailout team didn't have any problems with the current Croke Park Agreement.

"They are content with the savings we have set out," he said.

Mr Howlin said the bailout inspectors had not raised any issues about Croke Park but he had brought the subject up himself because newspaper reports suggested the troika had concerns.

Previous troika bailout team reports on Ireland have consistently highlighted the Government's failure to cut the public sector pay and pensions bill.

The IMF and other bailout partners worried about the total amount spent by Government rather than the amount spent by each department.

But the minister reiterated that the Government was looking for further cuts in the public sector, although these cuts will be limited to some individuals and departments.

The Government is looking for "targeted, focused" redundancies, Mr Howlin added.

Irish Independent

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