Brendan Howlin (Wexford, Labour)

The Financial Emergency Measures in the Public Interest Acts 2009 imposed a pension related reduction effective from March 2009 and a reduction in pay rates effective from January 2010 ranging from 5% to 15% for all public servants. The effect of these measures, combined with measures to reduce the numbers of public servants and to restrict other elements of the public service pay bill, has been to reduce the net cost of the Exchequer pay bill by some 15.5% between 2009 and 2011. The implementation body for the public service agreement in its report to Government of 15 June 2011 established that the estimated sustainable pay bill savings in the order of €289 million in the public service pay bill had been achieved in the year, March 2010 to March 2011, along with other substantial savings in the delivery of public services.

Paragraph 1.16 of the Public Service Agreement 2010 – 2014, Croke Park agreement, provides that the position regarding public service pay, including any outstanding adjudication findings, would be reviewed in accordance with the statutory requirement under both the Financial Emergency Measures in the Public Interest Acts of 2009 to review the operation and effectiveness and impact of the Acts before 30 June 2011. In addition to the criteria set out in those Acts, the review would take account of sustainable savings generated from the implementation of the Agreement.

The Minister for Finance in line with the requirements under the Acts completed a review of their operation in June. The reports were laid before both Houses of the Oireachtas on 30 June and have been published on the website of my Department. The reports concluded that, having regard to the overall economic conditions, national competitiveness and Exchequer commitments in respect of public service pay, the measures put in place by the Acts continue to be needed.

As required under the Croke Park agreement, there has been ongoing dialogue between representatives of public service management and the public service committee of the Irish Congress of Trade Unions in relation to the outcome of the reviews. The context is the Government's affirmation of the key commitments under the Public Service Agreement 2010-2014 to no further reductions in pay rates for serving public servants and no compulsory redundancies, save where there are existing exit mechanisms. These commitments are contingent on delivery of the necessary flexibilities and reforms to public service delivery that are required under the agreement.

The fiscal targets in budget 2011 are based in part on the reductions in the Exchequer pay bill achieved under the Acts, and can be met only through a continued policy of pay restraint. I believe that the general measures the Government is taking to reduce the overall public service pay bill are understood by the public service committee.

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