AT THE end of next month, the number of public servants will fall below the 300,000 mark. It will be a psychologically important moment, a mark of a big retreat from Celtic Tiger excess.
The reduction is part of an ambitious programme to achieve a reduction of 23,500 between 2011 and 2015. It will mean there will be 282,500 employed by the State compared to 306,000 at the end of 2010.
The Government is hoping February 28th will provide the whole project with its “Big Mo”, where the scale of departures will reach the momentum required.
When the last government began cutting public sector salaries in 2008, there was a silver lining for public servants – their pensions would still be based on their pre-cut salaries, but only if they retired before February 28th. Those retiring after that date will have pensions based on their reduced salary.
According to the Department of Public Expenditure, some 7,000 people have applied for retirement before the end of this grace period. Minister for Public Expenditure Brendan Howlin says he believes as many as 9,000 will retire in 2012. But to counter the disproportionate number of frontline staff going, Howlin has signalled a “limited recruitment drive” of 3,000, leaving a net loss of 6,000.
The year-by-year breakdown has been a little elusive. The background analysis produced by the troika before Christmas disclosed that 12,500 will go between 2012 and 2015. That’s a little over 4,000 a year in the last three years. It is claimed that more than €2 billion, or 15 per cent of the total pay bill, will be saved.
With the offer open to all, a mass departure will struggle to achieve symmetry. Concerns have been expressed of a “brain drain” of the brightest, of too many leaving from frontline services in the Health Service Executive and in the Garda Síochána, of some sectors being disproportionately affected. Working groups have been set up in each sector and, says the department, “are looking at gaps that might arise”. For instance, following a flurry of secondary school teachers retiring at the end of February, Minister for Education Ruairí Quinn ensured retiring teachers could be re-employed on a temporary basis until the State exam cycle finishes this summer.
Gaps will be plugged in other areas, especially Health, where there is a high exit rate from staff on the medical side. The planning in this area has been compromised somewhat by the fact people can change their minds about leaving up to the last minute.
As one-third of all public sector employees are in the HSE, it is unsurprising that its target, 3,500, is the highest. Education is next with an estimated 1,130 departures. The figures for other sectors are: Civil Service (1,000); local authorities (730); Defence Forces (500) and Garda (400).
In the Defence Forces, the moratorium on recruitment, as well as early retirements, saw the strength of the force fall from 10,500 to 9,500. Minister for Justice Alan Shatter argued to Cabinet colleagues that any further depletion would compromise the Army’s ability to serve overseas. Consequently, the moratorium was broken and 530 new recruits were taken on last year. It is expected that unions in other sectors, including the Garda, may argue for similar measures.
When a negative gap of more than €20 billion between State income and expenditure emerged in 2009, the public sector pay bill became an unavoidable target, given that it comprised a substantial component of State expenditure. Public servants had seen their annual incomes increase generously from 2001. Various rounds of benchmarking had resulted in pay awards of about 9 per cent, costing an additional €1.2 billion a year. The reforms on which benchmarking was supposedly contingent never materialised or were rejected by public servants. Instead of numbers reducing by 5,000, they increased by 38,000 in the five years after 2001.
The previous government’s initial approach was to impose, successively, a pension levy and pay cuts on public servants. Towards the end of its term in late 2010, a new agreement was hammered out in Croke Park that would protect salaries in return for reductions in numbers and reform, including increased hours, more flexibility, and redeployment. The Croke Park approach has been preserved by the Coalition, albeit with a higher target for job reductions. The targets for 2011 and 2012 will be surpassed. The big challenge will be achieving the required 12,500 reductions by 2015.
The Opposition sees flaws in the policy. “We agree with the 2012 figures and the February 28th deadline, because we introduced them,” said Seán Fleming of Fianna Fáil. He is concerned about major problems ahead for the HSE and said he has seen no evidence of a contingency plan. “The figures for between 2013 and 2015 are also much higher than we agreed. I don’t know if they are realistic. Fine Gael has a far more anti-public-service attitude. Labour got a phenomenal public sector vote but they have failed to put a brake on Fine Gael.”
Peadar Tóibín of Sinn Féin argues that the public sector in Ireland will be much smaller now than the OECD average.
“Frontline public services are under extreme pressure. The Government approach is quite indiscriminate. If efficiencies need to be created, we would argue that some of the very high salaries need to be reduced.”
There are some voices (including from Fine Gael) claiming that Croke Park, with its protection of salaries, is not sustainable in a deteriorating economic climate. For them, shedding 23,500 from the public service is only the beginning of it.
