Public service unions continue to back cost-cutting agreement

Public service unions in Ireland have told a parliamentary committee that the gap between government income and spending must be reduced, regardless of how it happened or who is to blame. They say the Public Service Agreement (widely known as the Croke Park Agreement) has delivered both industrial peace and cost reductions since it was negotiated in 2010, and is on track to achieve its objectives of cutting the public service workforce by 38,000 and reducing costs by €3.5 billion.

Background

The Public Services Committee of the Irish Congress of Trade Unions’ (Congress) was represented by Shay Cody, General Secretary of the Irish Municipal Public and Civil Trade Union (IMPACT), at the Joint Oireachtas (parliamentary) Committee on Finance, Public Expenditure and Reform, on 21 March 2012. He told members of various political parties that the Congress delegation had ‘a stark and not very pleasant message that we are required to share with members of our trade unions’.

He continued:

It is that their employer – the Government – is virtually ‘broke’. The gap between Government income and spending was more than 10% of GDP last year. And, despite the absence of growth in the economy, the troika [European Commission, European Central Bank and the International Monetary Fund] says this must fall to 8.6% in 2012, then to 5%, 4% and less than 3% in 2015.

Croke Park Agreement

The Congress delegation on 21 March also comprised three other high-ranking union officials:

• Sheila Nunan, General Secretary of the Irish National Teachers’ Organisation (INTO);

• Patricia King, Vice-President of the Services, Industrial, Professional and Technical Union (SIPTU);

• Tom Geraghty, General Secretary of the Public Services Executive Union (PSEU).

With Shay Cody, they also sit on the Implementation Body of the Public Service Agreement 2010–2014 (widely referred to as the Croke Park Agreement, named for the venue at which it was negotiated).

Under the agreement, public servants must cooperate with measures to reduce payroll and pension costs by €3.5 billion. In return, their salaries – which were cut in 2010 – will not be further reduced and compulsory redundancies will be avoided. The government and the unions are now half way through the programme instigated by the agreement that will cut the public service workforce by 38,000 and achieve the €3.5 billion savings by 2015.

Unrelenting pressure

Mr Cody told the parliamentary committee that the public service unions would be telling their 300,000 members that the country ‘would still have to bridge a huge deficit, even if bank borrowing and related interest were set aside’. He added:

Above all, we’re saying that as long as the public finances are in this state, there will be unrelenting pressure to erode public service numbers, salaries and working conditions.

He said that unions were having to confront similar realities in private companies, where costs were cut mainly through a mix of staff cuts and new working practices intended to sustain services and market share even while income, investment and staff numbers were falling.

Mr Cody said that few public servants disagree ‘when they’re told that workers in Greece, Portugal, Italy and Spain would appreciate a similar cost-extracting framework’, and he described the approach fostered by the Croke Park Agreement as a ‘valuable protection for taxpayers and citizens’.

Industrial relations war

Olivia Mitchell of Fine Gael, one of the two government parties, asked whether it was possible for the government to achieve budget savings of more than €3 billion by cutting services without further wage cuts. Tom Geraghty of the PSEU said that the agreement was ‘well on track’ to reach its savings targets. There would be ‘an industrial relations war’ if the government were to impose further cuts in public service pay, he added.

SIPTU’s Patricia King said that one of the most valuable clauses in the agreement was the protection from redundancy it gave for public service workers whose jobs were being outsourced. Ms King also repeated a criticism made by trade unionists that some senior managers in the public service were not implementing the Croke Park agreement ‘with as much enthusiasm as they should’.

Core of the agreement

On the following day (22 March), the independent chair of the Implementation Body, PJ Fitzpatrick, agreed with Mr Cody that ‘at its core’ the agreement was about ‘extracting costs, increasing productivity and modernising public services’. It was also helping the implementation of the new government-led public service reform plan.

Mr Fitzpatrick said that by the end of 2011, the Exchequer pay bill had been reduced by about €2.9 billion and that staff numbers had been reduced by 23,000, and a further 7,500 had departed at the end of February 2012. The final target was 37,000 job reductions by 2015, but front-line services were generally being maintained and in some cases expanded.

Mr Fitzpatrick concluded:

Thousands of staff have been redeployed across the public service… Throughout this process, there has been an absence of industrial action, which is in sharp contrast to what was happening before the agreement.

Brian Sheehan, IRN Publishing