Dublin Bus strike: Extra State funding to settle dispute unlikely

In his comments about the Government not being a "soft touch", the Minister for Transport Shane Ross would appear to be signalling that he will not be resolving the Dublin Bus strike by providing more exchequer funding.

Dublin Bus has said it cannot afford pay increases greater than the 8.25 per cent over three years recommended by the Labour Court. However, unions have contended the Government should be increasing the State subvention provided to Dublin Bus rather than reducing it, as has been the case over recent years.

Two sources

Dublin Bus in essence receives its money from two sources; passenger fares and exchequer funding. Unions say that in most European countries this ratio is about 50:50, but in Dublin Bus 75 per cent of revenue comes from fares.

The level of State funding has fallen from €64 million in 2013 to €57.7 million last year. However, the company has benefitted from a growing economy and falling fuel costs. It recorded profits of over €11million in 2014 and €10.3 million last year.

Dublin Bus has said it would pay increases recommended by the Labour Court but that flat rises above this level would be unaffordable.

It has proposed that any extra rises above this 8.2 per cent level would have to be linked to increased productivity.

The company believes the Labour Court recommendation could cost it €30 million over three years and even this would be stretching its finances. It contends the unions’ demands for a 15 per cent rise over three years would cost €50 million. Their calls for the payment of an outstanding national award of 6 per cent dating back to 2008 or the introduction of pay parity with Luas drivers would obviously cost more.

The only way to break the logjam would involve the unions scaling back their demands, the company and/or the Government providing more funding for pay, the Labour Court recommendation being supplemented by some form of productivity deal or for some combination of these.

Ross and the Government will be mindful of the potential knock-on effects of any settlement to the dispute, and the consequences of providing more State funding on the Government’s fiscal space for expenditure next year.

Just as the 18 per cent rise secured by Luas drivers after their lengthy dispute this year added to the expectations of staff in Dublin Bus, workers in Iarnród Éireann and Bus Éireann are waiting in the wings with their own pay claims and will be watching developments very carefully.