NEW DIVISIONS have emerged in the Cabinet over the Croke Park agreement on public service pay, amid continuing controversy over cuts to health services.
Minister for Public Expenditure and Reform Brendan Howlin publicly rebuked Minister for Health James Reilly after the deputy Fine Gael leader called for the Government to re-examine the deal guaranteeing staff no further pay cuts in return for co-operation with reform.
Dr Reilly described the pay issue as the “elephant in the room”, and said the Croke Park agreement had to be “expanded” to deal with critical financial problems facing the health service.
He argued he could make no more savings in non-pay sectors and said “some of the best-paid people in the State” should shoulder the burden.
In reply, Labour’s Mr Howlin said Dr Reilly could cut hospital consultants’ pay but “Minister Reilly’s stated preferred approach has been to deliver savings from that group [consultants] other than through pay reductions; it will be critical that engagement with that group is pursued urgently by his department and the HSE to ensure those savings are delivered”.
In what was interpreted in political circles as a carefully worded admonishment, Mr Howlin said he was “strongly in agreement that the highest-paid public servants, who are hospital consultants, should form part of the solution to the issue of cost overruns in the health sector”.
The programme for government commits the Coalition to reducing hospital consultants’ remuneration under a new contract.
The controversy began yesterday when Dr Reilly told reporters about the options open to him when implementing required cuts.
“The point comes when you have to look at pay or start cutting patient services. As a doctor or as a Minister, I want to see patients and patient services protected,” he said.
Asked whether he believed the agreement should be renegotiated, Dr Reilly said he wanted to see all elements outside of core pay explored first.
He cited overtime rates and agency staff, both of which related to absenteeism, he said.
“If 70 per cent of budget is pay, and up to 90 per cent in some areas, then you can’t make savings without addressing that issue. It just has to be addressed. But that is a broader issue than health.
“It is an issue across the Government that the Government has to consider and it is not for me to decide it. It has to be done in conjunction with the Department of Public Expenditure and Reform.”
Responding, Mr Howlin said there were further savings to be achieved in the health sector pay bill, “in particular the variable elements of pay such as overtime and premium payments, through maximising the flexibilities available to health sector management under the Croke Park agreement”.
Mr Howlin said he would be supportive of Dr Reilly “in ensuring health service managers take responsibility for meeting their budgetary targets through proper and careful management of their staffing and resources”.
In further evidence of tensions between the Coalition partners, it emerged that neither of the Labour Party Ministers of State in the Department of Health – Róisín Shortall and Kathleen Lynch – had been given prior warning of the HSE cuts.
Minister for Education Ruairí Quinn said he would like to see negotiations begin for a successor to the Croke Park deal.
“Given the state of where we are, everything should be on the table but I can’t prejudge what the outcome of that might be,” Mr Quinn said.
Separately, The Irish Times has learned that proposals to cut allowances to public service staff are likely to be confined largely to new entrants.
New teachers are expected to get an increased starting salary but forfeit a qualification allowance.
The proposals are expected to be considered by Cabinet next week.
