OPINION:Despite the views of varied detractors, the public service accord has saved the State €1.49 billion in its two years to date
YESTERDAY’S CONFIRMATION that the Croke Park agreement has delivered almost €1.5 billion in recurring annual savings in its first two years is to be welcomed. But there is no room for complacency over public service reform.
The second annual report of the Croke Park national implementation body identified a total of €891 million in annualised payroll and non-pay savings delivered in the second year of the four-year agreement. This is in addition to savings of €597 million achieved in Croke Park’s first year, giving a total of €1.49 billion over two years.
The relatively slow pace of public service reform in the past meant doubts over our willingness and ability to implement Croke Park reforms. But it is now impossible for critics to argue with any credibility that the agreement is not delivering. Recurring annual savings of €1.5 billion are a substantial contribution by public servants, who have also suffered an average 14 per cent pay cut since 2009.
Yesterday’s report shows that we’re ahead of Government and troika targets on public sector staffing and payroll savings. It also gives examples of the significant reforms delivered, some of which, like new rosters with reduced dependence on overtime and premium payments, are themselves cost-reducing.
All this means we are on target to meet the Government’s goal of reducing the annual pay bill by €3.3 billion a year by the end of 2015. But it has not been easy and it will likely get more difficult, not least because the economic challenges facing Ireland are not abating and could well worsen.
Trade unions have argued strongly for an Irish and European growth strategy and Ictu has set out imaginative ideas on sources of investment. An increasing number of economists, governments and even market commentators now recognise that growth is the only realistic way out of our public finance crisis.
We want an alleviation of the annual burden of the Anglo promissory notes and we strongly support calls for higher taxation on higher earnings. But we also know these measures alone won’t bridge the gap, and that public spending will continue to be curtailed until the gap is bridged.
As long as the public finances are in this state, there will be unrelenting pressure to erode public services, wages and working conditions. In this context, most public servants understand the need for further substantial cost extraction and reforms to minimise the impact on services. But they are equally determined it can be done without further erosion of pay, and yesterday’s report suggests that they are right. Public servants have had to change their mindset; many of their critics now need to do the same.
Huge economic challenges remain. More public service reform is required. But change on the scale being demanded and delivered doesn’t just happen. It’s hard work and it requires a framework, not unlike those developed in forward-looking private companies that have run into trouble. The Croke Park agreement is the framework.
It’s an important but very simple agreement. Public servants must co-operate with the extraction of €3.3 billion of payroll and pension costs. In return, their salaries won’t be cut for a third time and compulsory redundancies will be avoided.
We know it’s a valuable – if demanding – protection for public service workers. Although they’ve already seen substantial cuts in their pay and pensions, few public servants disagree when they’re told that workers in Greece, Portugal, Italy and Spain would appreciate a similar framework.
But it’s a valuable protection for taxpayers and citizens too. By and large, its value is recognised by Ministers and elected representatives, not just because it is delivering relatively rapid and orderly cost extractions with minimal service disruption, but also because it is adding value to Ireland’s international reputation, a fact acknowledged by the OECD and others.
Yet the agreement continues to attract regular and often ill-informed criticism from the left, right and mainstream.
Those on the extreme left ignore, or seek to exploit, the realities of our country’s financial and budgetary situation. Those on the extreme right, in Ireland and across the globe, will continue to criticise public services regardless of their shape, size, cost or performance. But the often ill-informed criticism from the mainstream is more disappointing and disturbing. Not least because we have yet to see a coherent alternative put forward that would equal Croke Park’s record of, and further potential for, cost extraction and service reconfiguration through the most rapid, far-reaching and conflict-free changes in public service work practices since the foundation of the State.
Shay Cody is general secretary of Impact, Ireland’s largest public service trade union. He chairs Ictu’s public services committee and is a member of the Croke Park implementation body