Cutting allowances will affect lowest paid
If correct, this would be a serious blow to the credibility of the deal and, more importantly, to efforts to bring Ireland’s budget deficit under control.
But it is not correct. The implementation body charged with verifying Croke Park progress has emphatically rejected claims that savings have been overestimated, and stands over its report that €1.5bn in recurring savings have been achieved in the first two years of the agreement.
About €810m of recurring payroll savings have been delivered so far. Contrary to the impression given in yesterday’s article, this figure does not include any add-ons for office overheads or pensions.
It simply represents savings in salaries and employers’ PRSI contributions following a huge reduction in the number of public servants, which has been facilitated by Croke Park.
The agreement has also delivered almost €680m in non-payroll savings. These are not notional figures. They are based on reports signed off by the accounting officer of each government department or office.
Most of the non-pay savings come from reforms like shared services, improved procurement practices, increased online services, reduced travel costs, and savings in maintenance, catering, and cleaning.
In their article, the TDs wrongly implied from a Grant Thornton report that all government departments (except for agriculture) have determined their non-pay savings by simply adding 40% to their payroll savings. This is not the case.
Departments have not been instructed to calculate non-pay savings in this way and the implementation body chair, PJ Fitzpatrick, says there’s no evidence that any department or office has done so. Grant Thornton did not conclude that savings had been overestimated.
Then the TDs take aim at increments, which mainly go to younger and lower-paid public servants. Interestingly, they did not mention that new TDs like themselves are immediately paid at the maximum of their pay scale and, unlike other public servants on the same terms, would be unaffected by an increments freeze.
The TDs wrote that increments should be frozen for “those on higher wages”, without defining high pay. But Seán Kyne TD exposed the problem with this argument when he later told RTÉ listeners that high pay meant €50,000 or €60,000 a year. Most increments — over three-quarters in the civil service — are paid to staff earning less than that. And the higher paid you are, the less likely you are to get increments. Only 10% of increments are paid to staff earning more than €70,000 a year, while those at the very top would be totally unaffected by a freeze.
ALONG with other critics of increments, the TDs who wrote yesterday have to choose between saving very little or taking from those on the lowest incomes while leaving most better-paid public servants untouched.
A similar dilemma arises on the issue of allowances. Most commentators now agree that a small number of high-cost allowances — mostly paid to teachers, gardaí and nurses — are actually core pay and, as such, cannot be cut under Croke Park. While most accept that some (though not all) of the other allowances are not core pay, their abolition will save relatively little because most are small sums paid to few people.
These are tough times for legislators as they try to chart a path through problems that they did not create, and it’s absolutely right that public service pay and reform remain in the policy spotlight as we head into yet another hugely difficult budget.
As part of that debate, the benefits and terms of the Croke Park Agreement need to be aired, interrogated and understood.
However, its critics should beware of apparently simple solutions that run the risk of hitting those on low and middle incomes hardest, while putting at risk the substantial savings and reforms being delivered through cooperation with the Croke Park Agreement.
* Bernard Harbor is head of communications with the Impact trade union
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