Brian Cowen (Laois-Offaly, Fianna Fail)

It remains the objective of Government to effect savings of that order vis-À-vis the public sector pay bill for 2009 compared to 2010. The Government has made clear that the public service pay bill must make a substantial contribution to the fiscal adjustment required for next year. This is a structural adjustment and, therefore, the savings will be permanent.

The public services committee of ICTU proposed to the Government that this adjustment could be made without imposing cuts in pay rates. This would be based on commitments to a smaller, more efficient and more flexible public service to be achieved in line with the objectives set out in the Government Statement on Transforming Public Services. Discussions on these proposals have been continuing with the trade unions, which have proposed as a bridging measure pending completion of the various efficiency measures involved in transformation that there would be an agreed reduction in pay rates in 2010 and that this commitment to change would be recognised by permitting staff to take 12 days of unpaid leave over a period of years on a basis that it did not disrupt the delivery of services.

Proposals emerging from the discussions were considered by the Government yesterday and it was indicated to the unions that they did not in their present form provide a basis for the Government to confirm that it would not consider other options to effect the necessary savings. The public service unions responded by indicating they wished to continue to develop their proposals and I welcome the fact that in that context the planned day of industrial action for tomorrow has been postponed.

The Government will consider any further proposals emerging from current discussions. I want to make clear, however, that a basis for agreement will only exist if the scale of reduction in the public service pay bill is sufficient, if it is clearly seen to be permanent in character and if any transitional arrangements do not impact negatively on services as assessed by public service management.

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