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We need a State machine that is 'fit for purpose'

W hat a week we have just had. It is amazing how quickly things can happen when minds are focused. Can it actually be the case that, for once and for all, Ireland will see real and lasting public sector reform?

The arrival in town of our IMF and ECB masters for the first review of the €85bn bailout deal signed last November, and the first since the change of leadership, had an instant and dramatic impact on our marionette Government.

Three cabinet meetings in four days, including two emergency ones, have led in turn to much tough talking about further cuts from ministers on their best behaviour for their new commanders.

Perhaps driven by the knowledge that they have no other choice but to deliver on the much needed reform agenda promised by Croke Park to keep the lights on, both Michael Noonan and Brendan Howlin have given the unions five months to wise up or else all bets are off, and further cuts will be enforced.

"We also know that many parts of the Irish public service, as they currently operate, are not fit for purpose. We need a leaner, more efficient, better integrated and responsive public service, one that can meet the needs of citizens and industry over the coming years," Brendan Howlin began.

"The Croke Park agreement hasn't delivered as expected. One of the conditions for the third quarter is that if the savings are not being achieved in the public service, then further cuts will be needed," Michael Noonan followed.

The stark reality of the situation is this. Last year, the public sector pay bill of €18.8bn accounted for 60 per cent of the €31bn in tax revenues. In 2007, the pay bill accounted for 38 per cent.

We have a 2009 public sector yet we have 2002 revenues. It is utterly unsustainable.

While the determination of Noonan and Howlin is to be welcomed, and is accepted as such by someone like me who

has long called for public service reform, recent developments hamper the Government's credibility.

Three weeks ago, even with the country on its knees, senior civil servants were given an extra two days' holidays (from 31 to 33 days) by an arbitration panel because the savings sought by the Government fell outside the remit of Croke Park. Bonkers.

Also, since the crash in 2007/8, over €1bn in increments or long-service payments has been paid out to public sector workers, with top level administrators, college lecturers and senior civil servants benefiting most. (This was despite the Department of Finance's contention that increments benefit lower paid workers more.)

For example, according to official figures, senior lecturers at institutes of technology and senior administrators saw their salaries increase by between €2,000 and €3,200 a year. However, the increases in the salaries of lower grade workers, at €200 to €300, were 10 times less than that of the higher grades.

Then last week, it emerged that those who will have their work arrangements changed under the reform agenda will receive a once-off payment of one and a half times the amount they will lose. Such revelations cut to the core of the dysfunctionality within the public service and undermine all of the tough talking from the new Government.

But they didn't start it. All the way back to 2002, the rot in the public sector began with Bertie Ahern's benchmarking process, which delivered no reform. It was such a farce that economist Jim O'Leary resigned from the body that was in charge of its implementation. The same Jim O'Leary is now Michael Noonan's senior economic adviser. Let's hope he has retained his wisdom.

Then for over 18 months, the disastrous Fianna Fail/Green Party government, led by Brian Cowen, sought to continue the farce of social partnership only for it to collapse in chaos in late 2009.

Then within a matter of weeks, Cowen was at it again, guaranteeing pay and conditions until 2014 under the umbrella of what became known as the Croke Park Agreement. Under that deal, pay and conditions (which they claim has been hit by cuts up to 14 per cent) would be protected in return for a reduction in numbers, genuine reform in terms of work practices, and greater flexibility in terms of redeployment.

However, for a year, that Croke Park deal was talked about but nothing happened. Many people were asking -- what's the story with Croke Park? How is the IMF allowing this farce to continue?

Well, within four days of our overseers' arrival last week, emergency cabinet meetings were taking place and all of a sudden fresh cuts to pay and conditions are now on the table.

Given that the frighteners have been put on, it's no coincidence that a number of unions have changed their tune since last year.

Then, the likes of Irish Federation of University Teachers and the Teachers' Union of Ireland roared that Croke Park was a sell-out of workers, and should be rejected out of hand.

Last Wednesday and Thursday, as the union conference season kicked off, a number of unions, including the Public Service Executive Union, were telling their members it should be "grabbed with both hands".

The clear message, reform under Croke Park or your jobs will be under threat.

Later this month, the Government will publish its detailed plans for reducing the numbers working in the public sector over the coming three years.

The no-nonsense approach from the IMF contingent has been met with a refreshing willingness by office holders such as Michael Noonan and Brendan Howlin. In fairness to the two men, both seasoned politicians, behind the scenes, they have been making the right noises, stoking fires in the right places.

It is as if they realise the kind of reforms now being proposed could never have been undertaken by a domestic government without the cover of the IMF intervention.

Noonan said last Thursday again that what is needed is a correction of 9 per cent and that 25,000 jobs will have to go. Since 2008, about 16,000 jobs have already been shed, between the HSE voluntary redundancies, natural wastage, the public sector moratorium and the non-replacement of personnel.

Public sector workers have taken pain since 2008, they have had pay cuts, a pension levy and there has been a halt on promotions and career advancement. These are real sacrifices. But they still have guaranteed jobs and pensions. They are still paid more than their counterparts in the private sector, by and large. There is a deep inequality between the top and the bottom -- but that is true in every aspect of society.

A bloated, inefficient public sector was barely forgivable during the good times, but is wholly objectionable now. It is in everybody's interest that we get a State machine that is "fit for purpose".

Only then, can Ireland's recovery really begin.

Sunday Independent