Eddie Molloy: Coalition must revisit Croke Park deal
The agreement ring-fencing public sector salaries is fiscally mad and fundamentally unfair, writes Eddie Molloy
The absurdity of the Government sticking rigidly to the Croke Park Agreement was neatly encapsulated by David Quinn in last Friday's Irish Independent: "The annual health budget is around €13bn.
Therefore, Reilly is expected to cut €700m from the remaining €4bn ... next year." In fact, the real scale of the required cuts will be closer to €1bn by the end of next year.
The intense spotlight on Dr Reilly in particular is explained by the emotion that naturally surrounds matters of health and sickness and life and death, but precisely the same scenario is unfolding in Education, Security and Justice, Social Protection and all other departments. Already, just for example, during the past few months many of our most famous heritage sites, which are a cornerstone of our tourist industry, closed up shop at the height of the season.
I am familiar with the health system and I believe that €1bn can be taken out of the healthcare budget without jeopardising service quality. There are excellent initiatives under way, including the so-called "clinical programmes" which ultimately will deliver better services at lower cost. But these truly transformative programmes, which are modelled on the successful radical reorganisation of the cancer services by Professor Tom Keane, will take a number of years to be completed. In the meantime, any attempt to find €1bn "savings" within 12 months can only be achieved by cutting deeply into services and increasing risk levels within the system.
If the HSE is forced to resort to cutting staff rather than pay, which is ring-fenced by the CPA, then the people most likely to apply for the voluntary redundancy package will be nurses, doctors and other health professionals who can expect to find jobs elsewhere. The still top-heavy administrative ranks, where rampant grade-drift occurred after the formation of the HSE, are unlikely to be significantly affected.
It is said that we have lost our economic sovereignty to the troika, but a very large part of the remaining degrees of freedom to manage our own affairs granted by the troika has been forfeited to the CPA. Imagine: our Government is powerless to address the matter of medical consultants' pay until the end of 2014.
The Croke Park Agreement has an iron grip on vast areas of policymaking that touch on every aspect of people's lives.
Some very interesting stances on the CPA were reported last Friday. Kieran Mulvey, head of the Labour Relations Commission, said that those who seek the abandonment of the CPA are playing with the prospect of unprecedented strife; reform would come to a shuddering halt.
I do not see Mr Mulvey as issuing threats, but merely giving us the benefit of his experience and his reading of the mood of the union leadership. But I'm afraid his statement does give succour to those who would threaten.
Minister Howlin repeatedly reminds us that the agreement is delivering reform while at the same time maintaining industrial peace. The clear implication is that if the CPA is touched there will be mayhem.
The bargaining strategy of the Government is fundamentally flawed: it somehow wants to drive radical change without any 'trouble'. The unions know this and are experts in how to exploit such a weak point of departure, having learned the ropes throughout the Ahern era. Having adopted this 'whatever you do, don't cause embarrassment to the minister' approach or, still worse, 'don't do anything to damage the reputation of the country in our hour of crisis', both Mr Mulvey and Minister Howlin in the same breath urge managers to more or less 'take the finger out and put the boot in'. Without naming them (and that's another part of the story) Mr Howlin says that there are some who are using Croke Park as a shield against their inactivity; they have to manage, and drive reform.
Mr Mulvey is reported as saying that too often highly experienced public service managers have failed to find the courage to speak on inefficiencies, ineptitude, malpractice and fiscally irresponsible policies. In this context, I met a senior public service manger last week, who told me that when he made it clear he was going to deal with long-standing malpractices he was told by his boss and his board that it would be "impolitic" to pursue the matter at this time.
The trade unions know that the bottom line in the Government's negotiating strategy is to avoid trouble at all cost. I wonder if this was one of the reasons why Cathal Magee resigned from the HSE. He and others in his position are given contradictory orders: to achieve massive savings in a very short time, without touching pay, allowances or pensions of existing staff, and to do so without causing embarrassment for the minister as a result of service cuts (Magee was repeatedly told he still had to deliver the published service plan) or any industrial relations problems. Who would want to go into this kind of battle with both hands tied behind their back?
To construe the whole situation as one in which industrial relations mayhem will follow from re-opening the CPA is a measure of just how much power the public service unions have garnered in this society. Now that the country is over the proverbial barrel, the very idea of threatening, even implicitly, public protests, strikes and the like is outrageous.
Lest I be misunderstood, we need trade unions, professional associations and other forms of coalition centred around a common interest. We saw what happened to people with disability last week. On the assumption that they could not mobilise an effective opposition, the HSE/minister cut their personal assistant hours with the stroke of a pen, while four years into the crisis they remain involved in "ongoing discussions" about "flexibility" with the medical consultants.
Many unions have lost their way, and their espousal of "social solidarity" rings very hollow when you see how they have cut singularly self-serving deals, for example the deal whereby special needs assistants are cut to achieve a saving of €27m that in turn funded annual increments for teachers, and another deal that saw new teachers starting at 28 per cent lower pay and none of the allowances of their predecessors. When push came to shove, "social solidarity" amounted to nothing more than looking after their own sectional interests, never mind their new work colleagues and still less the wider society. It is all quite ruthless.
Even among the unions themselves, those who represent the higher-paid ranks have shown scant regard for the needs of lower- paid grades, some of whom barely earn the minimum wage.
The CPA is fiscally mad and fundamentally unfair and the Government should bite the bullet, stop the denial and revisit the agreement. It has a compelling case and legitimate grounds for doing so. Clause 1.28 of the agreement states: "The implementation of this agreement is subject to no unforeseen budgetary deterioration." Since the deal was agreed at Christmas 2009 and ratified by the unions in June 2010, budgetary deterioration has occurred on many fronts. Growth projections have not materialised, for example. Both unions and the Government signed on to clause 1.28, so it is not a breach of the agreement to invoke this clause. It is high time to do so. We have already borrowed €60bn, mostly to underwrite the CPA, and we cannot go on borrowing at this rate. Joe O'Toole's infamous ATM is empty.
As for the trade unions, with the 100th anniversary of 1913 Lockout imminent, they would do well to ponder what the great Jim Larkin would make of the Croke Park Agreement and the way in which it has impacted on wider society, particularly the most vulnerable workers and the people they serve.
Dr Eddie Molloy is a consultant in strategy, change management and innovation.