Both sides end up losing out in a pay war that divided a nation

By Stephen Rogers

Saturday, December 05, 2009

HAS the Government finally seen sense or has it scuppered a golden opportunity to finally transform a bloated public service?

While that will be the debate that will animate the pro and anti public service lobbies in the coming days, some might say an amalgam of the two reactions is the most appropriate.

What was at stake for public sector workers in these talks was a straight pay cut of up to 6.8% across the board versus a cut of as little as 4.6% and 12 days of unpaid holidays.

What was at stake for the Government was the transformation of an inefficient public service unresponsive to the needs of the population while still managing to drain more from its coffers than the exchequer could afford.

Both sides have now lost out. The Government will certainly be able to press ahead with the higher pay cut in Wednesday’s budget. The savings it needs in 2010 and in the following years will be copperfastened by a quantifiable cut which avoids the ambiguity unpaid leave had the potential to create.

However, it will also now know that rather than being active participants, public sector workers will actively campaign against the reform which had the potential to deliver even greater savings into the future. It will know the desperate need for a more efficient health service, offering better treatment to patients, is once more a pipe-dream.

Irish public sector workers are among the highest paid in Europe. Even with a 6.8% pay cut they will remain well paid by international standards. Private sector equivalents will also make reference to the frequent pay comparisons between the two sectors which find a differential of up to 26% in favour of the state’s employees.

Nonetheless, the recruitment embargo, the increase in the core working day in the health service, increased accountability across the sectors and the redeployment of resources to areas in most need would have made each public servant better value for money.

In some ways one must have sympathy for the Government. Well in advance of these talks, public sector unions made it clear any pay cut would be met with strike action. Therefore, with an eye on finally seeing true reform of the sector into the future, Brian Cowen was right yesterday when he said he needed to give the talks every opportunity to succeed. The reality though is that it is he and his predecessor who allowed the sector to mushroom to a size and with work practices, terms and conditions that were unsustainable. In that regard, this week’s talks were almost shutting the gate after the horse bolted.

So what now? It is almost certain that strike action will be announced when public sector union leaders meet in Dublin on Monday. It is unlikely that stoppage, which will undoubtedly be 24-hour and certainly nationwide, will take place before Wednesday’s budget given the sheer logistics. What is more likely is that unions will say it will be triggered by the pay cuts which Brian Lenihan will announce.

Public sector leader Peter McLoone has been quoted often in the past few years declaring public servants’ commitment to doing just that – serving the public. He has also been an oft-proclaimed fan of modernising those services. It is chilling then, that in his statement released following the collapse of talks, the fan of public service transformation concluded: "We are now going to see conflict instead of co-operation with change."

And where does yesterday’s decision leave the Government? Obviously, the backbenchers will approve of Cowen’s decision. The ear-bashing they received from the public when unpaid leave seemed certain had the potential to lead him very close to losing the confidence even of the party who made him Taoiseach. The decision will also ease the pressure from Europe to be seen to be acting on the deficit.

However, the medium to long-term future is less optimistic. In not-so-many months the Government will have to come back to unions for further cuts for 2011. With 15% effectively gone from their pockets in this calendar year, the talks at Government Buildings will be a lot less cordial.

This story appeared in the printed version of the Irish Examiner Saturday, December 05, 2009