Spending and employment cuts a huge challenge

5th December 2011

Maintaining the level and quality of public services with 6,000 fewer staff and €1.4 billion less current spending, against a background of growing demand for services, will be a huge challenge. That was IMPACT’s reaction to yesterday’s Government statement of 2012 public spending and staffing plans.

The union said the projected reduction of 6,000 further jobs would follow reductions of almost 20,000 posts in recent years.

IMPACT general secretary Shay Cody said 2012’s planned cut of €400 million in pay costs came on top of a 15% reduction in public service payroll costs since 2009. He said the Croke Park agreement had directly delivered annual savings of over €680 million in the year up to June 2011 – with more to come.

“Reductions in public expenditure and staffing are difficult for those who use public services, as well as for public servants themselves. We are currently about half way through a difficult reduction in public service numbers from over 320,000 to less than 280,000. By far the biggest reductions have been in management and administrative areas. The Croke Park agreement acknowledges that this cannot be done without substantial reforms in the workplace and in the delivery of public services, and public servants and their unions are working daily to deliver those reforms,” he said.

The union gave a cautious welcome to the announcement that, despite a further net reduction of 6,000 posts, there would be some recruitment in the public service next year. It said it was crucial that any new recruitment was concentrated on core areas like primary health care, child protection and social care.

Pay and pensions

IMPACT acknowledged that the Government intended to honour the Croke Park agreement and had ignored calls for compulsory redundancies, further pay cuts or a freeze on increments.  Indeed, Minister of Public Expenditure and Reform Brendan Howlin acknowledged that public servants had suffered pay cuts and were working to deliver reform while meeting growing demand for services with fewer staff.  Mr Howlin said delivered and planned staffing cuts would deliver savings of €3.5 billion by 2015.

The statement outlined previously known plans to legislate to reduce pension benefits for new entrants, but said “no further cuts for ordinary public servants are proposed.”

Overtime and premium payments

Mr Cody said cuts of 10% and 5% respectively in spending on public service overtime and premium payments would be difficult but could be managed. He noted that the statement did not call for reductions in the rates paid to staff and said overtime costs could continue to fall on this basis.

“Overtime costs have fallen substantially since 2008, including a 5.2% (€6.3 million) reduction in the first year of the Croke Park agreement. This has been done by changing work arrangements to reduce reliance on overtime. For instance, changes in rosters and other reforms in medical laboratories, agreed under Croke Park, are now delivering annual savings of €7 million,” he said.

Changes to sick leave arrangements

IMPACT said public service management already had the tools to deal with any abuse of public service sick leave, but said it would discuss management proposals for revised arrangements when invited. “We will listen to what they have to say. Minister Howlin has set out the Government’s intention to “review and revise” public service sick leave arrangements between the first and third quarters of 2012. We need to ensure that reasonable sick leave arrangements are in place because sometimes employees fall ill. Nobody is stopping managers from dealing with any abuse of the system, but I don’t believe ‘absenteeism’ is a fair term for people who are genuinely sick, including those being treated for cancers and other critical illnesses,” said Mr Cody.

Public servants share the pain

IMPACT rejected media criticisms that public servants were sheltered from the effects of the Budget. The union said:

  • Public servants are PAYE workers and bear the full impact of the increased taxes and charges, imposed in this and past budgets, just like everyone else
  • All public servants have had their pay cut by an average 14% (through direct cuts and the so-called ‘pension levy’) in the last two years
  • Pay for new entrants had been reduced by an additional 10%, which means their salaries are down almost a quarter compared to 2008
  • Pensions had been cut, even though almost 80% of civil service pensioners receive annual pensions of €30,000 or less.

The union pointed to a recent OECD review, which found that the pay of almost all Irish public servants is on a par with OECD and EU averages when local purchasing power is taken into account – even before the ‘pension levy’ is factored in.