Public service pay cuts now certain

The long-running talks between the Government and public service unions on securing savings in the public service pay bill have broken down.

Earlly on Friday it appeared that agreement was near. However, Taoiseach Brian Cowen announced late on Friday afternoon that the Government could not agree to the terms proposed.

Chief negotiator on the union side Peter McLoone said the talks broke down because the Government could not agree a deal as a result of the controversy over the unpaid leave proposal. He claimed the Government had changed its mind on an agreement.

Backbench Fianna Fail TDs had reacted angrily to the unpaid leave proposal which emerged this week as an alternative to direct pay cuts.

The talks breakdown is expected to lead to the implementation of an across-the-board pay cut for all public servants in Wednesday's Budget. Industrial action by public service unions is also likely to resume.

Taoiseach Brian Cowen said this afternoon that because the amount of savings to be gained from the proposed plan was less than the minimum required, the proposed deal did not provide a basis for agreement and the Government reserved its position.

There had been major concerns about how the unpaid leave proposal would impact on health and other service delivery and whether the proposals put forward would meet the Government's savings target.

The Irish Congress of Trade Unions has said it was astonished by the Government's decision.

ICTU General Secretary David Begg said that the Government's decision to reject the draft agreement was taken following a hostile campaign of opposition to the proposals before they could be either finalised or explained was inexplicable.

Earlier, it had been reported that Government officials and union negotiators were close to reaching an overall agreement on radical change in the public sector including savings of €1.3 billion.

Unions now claim that the breakdown means a missed opportunity to achieve a transformation in how public services are delivered.

The main elements of the plan would have seen changes to work practices, including an 8am-8pm core working day.

A major programme of health service reform has been included in the draft deal between the public service unions and the Government, which earlier on Friday was reported as being close to agreement by the two sides.

The prospective deal, which included provision for unpaid leave, included a major revamp of work practices in the health sector.

The proposals included the implementation of the McCarthy proposal for the core working day to be 8am to 8pm, thereby limiting the amount of overtime paid. This system is already being introduced for junior doctors in hospitals.

There were also plans for changes in rostering and reductions in allowances for health workers. It is planned that there will be a net reduction of around 6,000 in health service staff in the next few years.

The work practice changes would also have applied to other areas of the public service.

The controversial 12 days unpaid leave was expected to go ahead, with provisions made to minimise any impact on services.

In addition to the unpaid leave plan, the agreement was expected to factor in other savings including pay reductions for higher level public servants, including hospital consultants, under recommendations from a Government review body

The Government, in the absence of agreement from the unions, may now seek to push through not only pay cuts, but the other work practice changes, in the teeth of fierce union opposition. Many of the proposed work practice changes were already recommended in the McCarthy report.

[Posted: Fri 04/12/2009]