Public sector pay cuts U-turn will cost taxpayers €5m

THE U-turn on pay cuts for higher paid public sector workers will cost taxpayers €5 million, the Taoiseach has admitted.

As Fianna Fáil backbenchers backed down on their call to reinstate the full pay cuts for high earners, the Labour Party said the money lost would pay for all the special needs classes that have been slashed.

Those earning more than €125,000 a year were due to take pay cuts of between 8% and 12%, under plans announced in December’s budget. But the Government decided to take into account bonus payments that they have already lost, so their pay reduction will now amount to between 3% and 5% – the same as that being imposed on the lower paid public servants.

At least 650 top civil and public servants will escape the full pay cut including:

* 124 HSE officials.

* 60 gardaí.

* 12 members of the army.

* 231 directors of services at local authorities.

* 21 heads of state agencies.

* 34 city and county managers.

Finance Minister Brian Lenihan told Fianna Fáil TDs and senators he looked at the option of keeping the harsher cuts while reintroducing a bonus scheme. But he felt this was not feasible as the previous bonus system was not a success.

Fianna Fáil TD Mattie McGrath is threatening to vote in favour of a Fine Gael motion next Tuesday calling for a reversal of the Government decision. “I’ll be discussing this with my constituents at the weekend and time will tell. I have to consider my own position at the weekend,” said the South Tipperary TD.

Mr McGrath’s motion calling for a reversal of the decision did not get any support at a parliamentary party meeting on Tuesday.

After Taoiseach Brian Cowen refused to give details of how much the U-turn would cost, Labour leader Eamon Gilmore said: “It would appear now from his answer that none of the reluctant seconders to the motion asked about the cost of it at yesterday’s parliamentary party meeting.”

Mr Cowen eventually said: “I understand the figure is less than €5m.”

A Department of Finance spokesperson later said the figure was “around that”.

Mr Gilmore responded that the sum “would replace all the special needs classes”.

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