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Pay hike for €100k-a-year staff wipes out savings

PAY hikes for €100,000-a-year civil servants will cost far more than any savings achieved through abolishing 88 public sector allowances, it has emerged.

High-earning State employees will get salary increments this year costing up to €50m, while special payments to nurses, gardai and others are to be cut.

In a major U-turn, Public Expenditure Minister Brendan Howlin announced 88 allowances would be targeted.

However, despite several attempts, the Herald was unable to clarify how much money the minister hopes to save with the new cuts.

Fianna Fail criticised the minister today, saying the move is about Mr Howlin playing the "hard man" under pressure from Fine Gael.

But the minister has confirmed that civil servants who earn more than €100,000 will still get pay rises this year.

Up to 500 staff are getting increments this year, with the Government saying it cannot stop them as they are protected under the Croke Park Agreement.

Fianna Fail TD Sean Fleming said the cost of the hikes could be as much as €50m, though the Coalition disputes this figure.

However, the sum is expected to be far in excess of any savings achieved through tackling the 88 allowances.


It comes as a special meeting of the Croke Park Implementation Body is held this afternoon to discuss how to achieve further savings.

Chaired by Taoiseach Enda Kenny, the meeting will see potential savings presented to unions and management.

Mr Howlin was also appearing before the Public Accounts Committee today to provide an update on the public service reform plan.

SIPTU has said any cut in allowances would be a breach of the Croke Park Agreement.

But director of business group IBEC, Brendan McGinty, said paying increments to public servants did not make economic sense when the Government was borrowing €1bn a month.

Mr Fleming told the Herald his view on allowances is "clear-cut".

"Where there is a proper business case for allowances to be paid, they should be paid. Where there is not, they shouldn't be paid," he said.


"They should be looked at on a case-by-case basis... The matter should be adjudicated on by the Labour Court.

"It's not a case of the minister deciding and the trade unions vetoing. The proper venue is the Labour Court," Mr Fleming added.

Some 1,100 public sector allowances cost the exchequer in the region of €1.5bn a year.

It is estimated the savings from targeting 88 of the special payments will be minimal as they apply to a minority of workers.

The allowances that will now be abolished by the end of February include:

•Gaeltacht allowance paid to nurses in Irish-speaking areas, worth €3,500 per year.

•Locomotive allowance for senior gardai who use their private cars for work.

•Acting-up allowance for senior council officials.

lEntertainment allowance for Defence Forces officers who are posted abroad.

•Medical training allowance for consultants, worth €3,000 per year.

Mr Howlin's department has not yet released the full list of 88 allowances facing abolition, or how much the move would save.

Trade unions are to oppose the latest effort to eliminate a wide range of public service allowances.

See Dan White, p16-17