THE GOVERNMENT has told trade union leaders that it wants to secure savings of €1.3 billion in the public sector pay bill next year.
Public sector unions, who have rejected any proposals for cuts in pay, are to meet the Government next week to see if this level of saving could be achieved by other means.
However, The Irish Timesunderstands that public sector trade unions are considering plans for a one-day national stoppage in the last week of November, probably on Tuesday, November 24th, which could disrupt a range of public services including schools and hospitals.
The strike would be in addition to the national day of action planned by the Irish Congress of Trade Unions for November 6th, details of which were announced yesterday.
Senior union leaders last night confirmed that plans for a one-day stoppage later in the month were being considered. Some suggested that the national public sector strike, if it went ahead, would be on a scale not seen before but that it also could provide a momentum for producing an agreement in advance of the budget.
In talks with Taoiseach Brian Cowen and Minister for Finance Brian Lenihan at Government Buildings on Tuesday night, union leaders were told that the Cabinet was looking to cut the public sector pay bill by 6.85 per cent, or €1.3 billion.
Union leaders were told this reduction could come about by pay cuts or through alternative measures. Reducing the public sector pay bill does not necessarily involve cutting basic pay as it could be achieved, for example, by scaling back on numbers employed, curbing allowances, overtime or premium rates (variable or non-core pay) or pension payments.
A Government spokesman confirmed last night that the proposed cut in public sector pay had been provided to the unions as an “indicative” figure. He said no other figures had been mentioned at the meeting.
The Department of Finance also forecast in a briefing for the unions that Gross Domestic Product next year would contract by a further 1.75 per cent and that 80,000 more people were likely to lose their jobs.
Yesterday afternoon, public sector trade union leaders made contact with the Department of Finance on the issue. The two sides agreed to meet next week, probably on Wednesday, to consider options other than pay cuts to generate this level of savings on the basis that there were no commitments.
Informed sources said last night that it was likely that the talks would seek to draw up a list of items which could produce savings. Sources said that this could include areas like greater efficiencies, flexibility and work practice reform, reductions in non-core pay such as allowances or premium rates or breaking the traditional link between pensions paid to retired public servants and those still in post.
Any move to reduce non-core pay would be strongly resisted by gardaí, nurses and prison officers, who receive proportionately more in their overall earnings from overtime, allowances and premium rates. The alliance of unions representing such staff yesterday described as “positive” meetings held with Fine Gael and the Labour Party.
The new moves come as the country appeared to be on the brink of widespread industrial unrest over the Government’s economic strategy. Yesterday members of Impact, the State’s largest public sector union, voted overwhelmingly to strike in the event of the Government introducing further pay cuts.
The Irish Congress of Trade Unions is also to hold mass rallies in eight on Friday, November 6th in a bid to persuade the Government to adopt an alternative approach to bringing the public finances under control.
However, in a speech yesterday, Mr Lenihan again said public spending had to be reduced to stabilise the budget deficit at 12 per cent of economic output and warned that failure to do so would lead to increased borrowing costs.
