Daniel McConnell: Discredited first agreement means talks must deliver
Tomorrow sees talks begin on the formation of a new public sector agreement between the Government and union leaders.
A "plenary" meeting will be held between the public service unions' officials and Minister Brendan Howlin's department with intensive talks to begin "as soon as possible thereafter" with a view to "concluding discussions as early as possible in the next few weeks",
Known more commonly as the Croke Park Agreement, the deal was engineered by former Taoiseach Brian Cowen in early 2010 behind the back of – and without the approval of – his own finance minister, the late Brian Lenihan, and it is deeply flawed.
Since its inception, the deal which guarantees no pay cuts until 2014 in return for reforms and efficiencies has utterly failed to deliver the necessary savings to ensure Ireland's pathway to sustainable deficit levels.
Despite the formation of a Department of Public Expenditure and Reform, much scepticism remains around the level and pace of change in the public service.
Driven by that failure and growing disillusionment with Croke Park, particularly within Fine Gael, Minister Howlin has extended an invitation to the unions to these fresh talks with a view to delivering a further €1bn in pay bill savings by 2015, including a further €300m this year.
Officially, the existing Croke Park deal delivered €1.5bn in savings between 2010 and 2012, but considerable doubt was cast by members of the Public Accounts Committee in October over the accuracy of their figures.
More importantly, even if the €1.5bn figure is accurate, it is a paltry sum in the context of budget deficits totalling over €35bn in the same period.
That is some price to be paying for industrial peace which would end if any move was made to cut pay or to change increments and allowances not even mentioned in the text of the Croke Park deal. Not enough has been done to dispel the perception that the Croke Park deal cosseted the elite at the top of the public sector.
Countless stories of pension deals and pay increases to well-paid public sector workers have damaged the standing of the first agreement.
Denounced by many business leaders, commentators and many within the Fine Gael Party for protecting the elite at the top of the civil service at the expense of lower paid workers at a time of national bankruptcy, the Croke Park deal, three years on, has exposed the gross apartheid that remains in the public service in Ireland.
Howlin himself saw his credibility damaged by his failure to secure €71.5m of €75m in allowances he promised last year.
Howlin and others who defend Croke Park refer to the 30,000 reduction in numbers, reforms to rosters, greater efficiencies while facing higher demands on services as the main successes of the agreement. They say that tough reforms have already been obtained from the system despite resistance from local managers in some areas.
So, what can we expect from a new Croke Park deal?
Well, we have had some tough talking from Howlin and other unnamed ministers in recent weeks that under the new deal, poorly performing workers face being sacked. Howlin has also promised to keep pay for the "vast bulk of public servants" at its current levels but warned public sector workers that they will have to "work longer, and more cleverly and in different, smart ways".
For maintaining pay levels, the Government wants wide-ranging changes to work practices within the public sector. Among the items on the table in the talks with unions is the exchange of staff between the public and private sector; increased performance measurement; shared services; outsourcing; changes to the working week and reductions in overtime and premium pay.
But this weekend, it seems a further concession has been offered up by the unions in a bid to protect core pay levels.
Quoted on Friday, Tom Geraghty of the Public Sector Executive Union warned his members to expect that increments would be on the table, as would allowances, overtime arrangements, expenses and working time cuts. Geraghty sits as the head of the umbrella group of public sector unions and such comments represent a significant shift in position from even four months ago, where increments were definitely off the agenda.
A government source has confirmed that increments will form part of the discussions when they begin in earnest, as Howlin and his officials seek to obtain the "full flexibility" he was mandated to by his sceptical Cabinet colleagues in Fine Gael.
Such progress represents a gain for Brendan Howlin and hopefully will give him the resolve to press as hard as he can to make the sort of transformative change so desperately needed in a public service which is, "in many areas, not fit for purpose".
A leaked troika document this weekend reveals the deep scepticism and frustration about Croke Park's delivery to date in terms of savings and reforms. It said the Government should "keep all options on the table" in finding savings including cutting pay rates, further reducing numbers and the paring back of certain allowances.
The report, compiled in the wake of the latest review mission to Ireland, said further reductions in allowances and salaries for some categories of workers . . . would be a better way to align pay rates with those other countries".
But, while there is some doubt in senior government circles about the ability to deliver cash savings from certain allowances and efficiencies, a source confirmed that a further 5,000 job losses will be sought by Howlin under a fresh voluntary redundancy scheme this year, particularly in the areas of health and agriculture.
Losing numbers is the easiest and swiftest way of reducing the upfront pay bill, but it
does immediately place an additional burden on the pensions bill when workers retire.
But resistance still remains in some quarters as evidenced by today's averted strike in Bus Eireann and the INMO's negative reaction to the new 1,000 graduate nursing places at 80 per cent of the salary of existing nurses.
Ultimately, Howlin has a strong hand in these discussions as unions are also wary of threatening all-out strikes as the last national day of protest, on November 24, 2009, ended up with nightclubs like Copper Face Jacks full and five-mile tailbacks on the motorway up to the shops in Newry.
The first discredited Croke Park deal is long past its sell-by date, and the talks beginning tomorrow represent the last real opportunity for this Government to deliver the savings and reforms it promised.