MINISTER FOR Public Expenditure Brendan Howlin has strongly rejected assertions that Government departments have overstated the savings made under the Croke Park Agreement.
In several detailed statements yesterday, Mr Howlin took issue with reports in several newspapers over the weekend and in yesterday’s Irish Times. He also disputed that the EU-IMF-ECB troika had expressed dissatisfaction with the scale of Croke Park savings.
It was reported that departments were calculating savings made through early retirement by adding a percentage to salary savings on the basis of non-pay economics – and that one department, Agriculture, had not claimed savings in line with this formula.
Yesterday, however, the Department of Public Expenditure said no circular was issued to any department instructing them to calculate non-pay savings under the Croke Park agreement by using an estimate for overheads of 40 per cent of total salary cost.
“This is incorrect,” said the spokeswoman, who said that referred to guidelines from 2009 that were never used to calculate savings. “External accountants are engaged by the Implementation Body to independently evaluate samples of savings reported. They have reported on each occasion that they are satisfied with the reported savings.
“In their report earlier this year [accountants] Grant Thornton made clear that they were satisfied with the savings they examined including those of the Department of Agriculture [and found them to be] reasonable estimates.”
Mr Howlin’s view was strongly supported by the IMPACT trade union, which stated that the savings had not been overestimated.
Grant Thornton said that in May it completed a report for the Department of Public Expenditure and Reform into the verification of savings of selected projects under the Public Service Agreement (Croke Park agreement).
The report, published on the department’s website, was a discrete and targeted piece of work examining cost savings achieved in four projects, it said.
It stressed that its report concluded: “the declared savings reported by management in each of the four projects were found to be reasonable estimates of savings that have arose or will arise due to the successful implementation of the projects and we are satisfied that the methodology used for each project is acceptable”.
It said it was confident it had delivered a robust, independent analysis, and “reaffirms the conclusions made in the report”.
Meanwhile, responding to comments by the head of the implementation body, PJ Fitzpatrick, that Croke Park remained silent on the matters of increments and allowances, the Labour Party maintained that it was not inconsistent with views expressed by the party leadership that they had to be honoured under the terms of the Croke Park agreement.
Eight Fine Gael TDs, who wrote an article in a national newspaper yesterday, said increments, which will add €170 million to next year’s pay bill, should be revisited.
A spokeswoman for Mr Howlin referred to his comments that trying to remove increments from higher earners in the public service would necessitate financial emergency measures and suggested it would have been a huge risk that would not be worth it.
“The problem with targeting a couple of hundred people is that it does not have general application. Bluntly, I was not willing to risk the entire [financial emergency apparatus] if it could be pulled down by virtue of a case for the tiny sum of money that would be involved,” he said.
