AFTER NEARLY six months, reforms under the Croke Park deal are finally being considered with a sense of urgency. The delay has been attributed to heavy departmental workloads. But past performances would suggest a lack of appetite for the extensive administrative changes that will be required in return for public sector job security and the protection of pay and pensions.
The Institute of Public Administration (IPA) indicated just how challenging reform is likely to become when it reported that three-quarters of the entire Government pay bill is spent on health and education services. They also account for 70 per cent of State employment. Significant additional funding was provided in recent decades. Services and staff numbers expanded and pay and conditions improved.
The shortfall in Government revenue is so severe that, as Taoiseach Brian Cowen told the Dáil, we could run out of money next July unless interest rates fall and it becomes possible to return to the international bond market. As a scene-setter for the December budget and publication of a four-year plan, his comment offers no comfort. But it identifies with brutal clarity the threat that hangs over State services and the options that exist of cutting spending or broadening the tax base. A three-to-one ratio between cuts and taxes will protect the better off.
Unless the Government has other ideas, the Croke Park deal has insulated the public sector from immediate and radical surgery. But, as Labour Relations Commission chief executive Kieran Mulvey has said, unless there is a tangible and meaningful delivery of reform within six months, the agreement may unravel. Mr Mulvey believes those involved would be “mad” to abandon the deal because of the potential benefits it offers in terms of industrial peace, structural reforms and long-term savings.
Industrial or social unrest would worsen the existing crisis and delay economic recovery. Because of that, trade union leaders have the difficult task of promoting change while pacifying more militant members. The IPA found that public sector numbers, as a percentage of total employment, are not excessive by European standards. However, Government departments adopt poor output targets and fail to meet them. Instead, the IPA suggested the introduction of a system that would reflect both public sector performance and productivity. That approach should have been adopted years ago.