Shock, horror, but ignore the facts

PAGE 13 – Irish Examiner

By Shay Cody, IMPACT general secretary Wednesday 1st February 2012

There’s been more than a hint of panic in some of the debate about retirements from the public service at the end of this month, with lurid reports of the possible effect on services and costs to the exchequer. A lot of this has been based on assumptions rather than facts.

Declining public service numbers have been a fact of life since 2008. Roughly 20,000 people have left public sector employment since then. The Government’s target is that another 20,000 will go by 2015.

The trick is to protect and prioritise services as staffing falls. It’s not easy. But the full utilisation of the Croke Park agreement means it’s possible if managers roll up their sleeves and manage.

Public servants in all sectors – health, education, local authorities, the civil service and elsewhere – have been responding to staff reductions by working harder and differently to maintain services, despite increased demand due to demographic trends, the introduction of new services like special needs assistants, and the direct results of the economic crisis.

What we face at the end of this month is equally manageable. According to the figures we have, this month’s retirements will mean a further reduction of about 3% in staffing. To put it another way, the exits will leave 97 people to do the work of 100.

By and large, this average fall is evenly spread across sectors and occupations as a proportion of the numbers currently employed. The numbers look high in areas like nursing and teaching, but this reflects the fact that these professions represent big blocks of public service employment.

Difficulties will arise if there are concentrations of exits in particular employments or sections. But management has the tools to deal with this. The Croke Park agreement facilitates the redeployment of staff to cover shortfalls in vital areas. And the Minister has said essential staff will be replaced.

There will still be big savings if some of the vacancies are filled because new staff are employed at the bottom of pay scales and on reduced salaries – 10% below existing staff, whose pay has already been cut by an average 14%.

On the question of costs and savings, it’s important to note that there is no ‘early retirement scheme’. Nobody is going to get extra lump sums or pensions by retiring now. Rather, a relatively small number of public servants, who are at or near retirement, can opt for a slightly smaller reduction in their pension if they retire slightly early.

Everyone who retires this month will be subject to a cut in public service pensions, which was imposed on all public servants last year. Those who retire early will see their pension further reduced to reflect their reduced years of work and pension contributions and any earlier payment of pensions. The actuarial reduction can be as much as 5% for every year of early retirement.

This also means that only those who are already at – or are very close to – retirement age can benefit in any way by leaving next month. Virtually all of them would have been due for retirement over the next year to 18 months. So, while a relatively high number will be going at one time, it’s not an exodus of people who would otherwise have remained for years.

Cuts in staffing and spending forced on Ireland since it lost its economic sovereignty are bound to effect services. But, as well as delivering savings, the Croke Park agreement is there to help managers prioritise services and manage the decline in numbers during a time of massively increased demand.

For example, the sudden exit of 2,000 health workers at the end of 2010, while rushed and poorly managed, did not lead to major problems with services. The Croke Park agreement was the mechanism that made this possible.

Some have argued that another public service pay cut (which would be the third cut for existing staff and the fourth for new entrants) is an alternative to staff reductions. They usually cite a small group of very highly paid public servants as examples. But last year an OECD study found that virtually all Irish public servants were paid in line with EU and OECD norms.

Cutting the pay of the few posts paid above international norms, or the 2% of public servants who earn over €100,000 a year, would not generate enough savings to balance our books or meet our international commitments.

Meanwhile, official figures show that 78% of civil service pensioners receive annual pensions of €30,000 or less. And the great majority of them don’t receive the state pension.

Shay Cody is general secretary of IMPACT trade union and chair of the ICTU Public Services Committee.