Freezing public worker increments a small sacrifice we desperately need

I HAVE a suggestion to make. It won’t be very popular, and won’t win too many friends. But it’s essential that we do something that can make a real difference.

And this will. In its mid-term review published the other day, the Government said that it intended to narrow the gap between what we take in every year and what we spend by €3.8 billion. That’s a staggering figure — and of course, it’s only the first of the next four budgets that are going to see monstrous clawbacks. They have made it clear that next year, the figure of €3.8bn is going to be reached in four different ways. There will be a €750m reduction in capital expenditure, added to €1bn in new taxes (that’s the house tax and a couple of other unwelcome things), and €600m from the carry forward effect of some of the newer taxes (the universal social charge, for instance).

That still leaves €1.45bn to be found. And all of that is going to be cut from public expenditure. As far as we know, the government is still trying to figure out how to make that huge cut. They have pretty well let it be known that the bulk of it is going to come from health and social protection. The situation is further complicated by the fact that the health service is already struggling to deal with over-spending in several areas – principally in the larger hospitals. So in real terms, the cuts could be larger than €1.45bn.

That will mean, inevitably, cuts in income supports for a lot of poor and vulnerable people. I already know from my day job that support for the work that a lot of non-governmental organisations do is being severely cut back already, because of the overspending problem.

That is work that helps to combat poverty and its effects, that helps to support families in crisis or people who have been traumatised by abuse. If there are to be further cuts next year, so that the poorest of the poor can help carry the burden of the crisis, a lot of us will be dealing with a massive crisis.

But apart from that there is the fundamental question of fairness. It is wrong, just plain downright wrong, that the poorest people in Ireland should have to shoulder any more of the burden. I believe that can be minimised by one decision that would save, at a stroke, a third of the amount that has to be cut in current expenditure.

I’m talking about increments. The vast majority of public servants in Ireland are employed on an incremental scale – and that means their salaries are increased year after year for no reason other than that their service in the job has increased. Generally speaking, the only reason an increment is denied is because the public servant involved has reached the top of the scale. It’s almost impossible to find out how much this costs. It’s never broken out of the payroll figures published by government, and therefore no hard amount is published. I know from my own experience though, and I’ve checked this with other comparable employers, that where most of the employees are on incremental scales, the annual full year cost of the increments is around 3% of the payroll.

What I’m proposing is that every increment due next year — and for as long as this crisis lasts — should be foregone, in both the public and the private sectors. Nobody will be worse off in either absolute or relative terms as a result. If you don’t get an increment, that simply means you stand still in pay terms. And if the person in a comparable position in the private sector doesn’t get an increment either, then nobody’s competitive position has been worsened.

I would love to think that we could have some kind of national voluntary agreement to forego increments — say until the end of 2015. But if we can’t, I believe the Government should unilaterally decide to abandon them for the time being. It would simply mean telling everyone that they are going to remain on the same point of whatever scale they are on now until further notice.

What would be saved? Next year alone, in the public sector alone, the saving would be 3% of almost €16bn — that’s the size of the public service pay bill. That’s not for short of €500m — or a third of the total required next year. And it could be done without being unfair to anybody — or to be honest, without hurting anybody too much either. If the choice is between job losses and reduced services on the one hand, and a freeze on increments on the other, I have to say it seems like an entirely logical choice to me. I’ve never understood the justification for annual increments in the first place. Nowadays, a lot of people seem to regard them as a sort of contractual entitlement. Indeed, I suspect if the government ever looked at freezing increments, the advice they’d get would suggest that it’s illegal. That’s poppycock. But so is the fact that no government is ever presented by the civil service with a detailed statement of how much is spent each year on increments. That’s because the senior civil service regard increments as a given. Why they should is not clear.

The only policy that I can find on increments is laid down in a Department of Finance circular that hasn’t been updated for years. That circular makes it clear that increments “increments will have to be earned by positively favourable assessment of performance and commitment throughout the year”. In other words, they’re not guaranteed. Yes, the withholding of an increment under normal circumstances means that you’re being unfavourably compared to your colleagues in terms of performance. But in exceptional circumstances, nobody can claim unfair treatment if everyone’s increment is withheld.

The other thing about increments has always been the peculiar fact that the more pay you get, the higher your increment tends to be. An assistant secretary of a government department, for example, would earn in the region of €126,000 in his or her first year in the job. But the minute they reach the first anniversary of their appointment they become “entitled” to an increment of €6,000 a year. A higher executive officer would start at around €44,000 a year, and that would go up to nearly €46,000 in their second year. A clerical officer would start at a lowly €22,000, and their increment would be just about €1,000.

Of course nobody likes losing an increment, just as nobody likes losing a job or seeing a vital service cut. But here’s the reality. The Government is already hinting that it may be necessary to sack up to 2,000 teachers next year, to save around €160m. A freeze on increments would save three times that, and would spread whatever pain is involved right across the public service. It wouldn’t cost a single job, and it wouldn’t result in the loss of a single needed service. Surely it’s a small sacrifice we’d all be prepared to make?