Seán Fleming (Laois-Offaly, Fianna Fail)
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To ask the Minister for Public Expenditure and Reform if he will commit to independent verification of the achievability of proposed savings that are to be targeted under a successor to the Croke Park agreement; if he will ensure that the interests of the users of public services are fully considered during negotiations; and if he will make a statement on the matter. [3185/13]

Mary Lou McDonald (Dublin Central, Sinn Fein)
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To ask the Minister for Public Expenditure and Reform the measures taken by him to ensure pay equality and the reigning in of excessive pay and pensions in any extended Croke Park deal. [3345/13]

Brian Hayes (Dublin South West, Fine Gael)
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I propose to take Questions Nos. 1 and 2 together.

The Deputies are aware of the Government's record to date in reducing higher levels of pay and of pensions in the public service. Since it took office, the Government has introduced a general pay ceiling of €200,000 for higher positions across the public service, brought forward a referendum to allow pay reductions to apply to the Judiciary and amended the public service pension reduction to apply a higher rate to those benefiting from higher pensions.

The reduction by 10% of the salary scale and fixed allowances for new entry grades to the public service was implemented by the previous Government with effect from 1 January 2011 and remains in place. The stated purpose of the measure was to achieve a medium-term structural reduction in the pay bill cost of the public service, and as a contribution towards improving Ireland’s competitiveness. The measure also had regard to the current Public Service Agreement 2010-2014, or Croke Park agreement, which provides for no reduction in the rate of pay of serving public servants.

The Deputy will be aware that, on foot of the Government’s invitation to the public service trade unions, discussions have commenced on extending the Public Service Agreement. Pay rates for all employees, including those subject to the 10% reduction, will form part of those discussions.

The discussions with the public service trade unions are predicated on the scale of consolidation required to meet our fiscal targets which will require a further reduction of some €1 billion in the cost of the public service pay and pensions bill.

Intensive engagement, facilitated by the Labour Relations Commission, has now commenced between the parties to the discussions and will continue over the coming weeks. In order to ensure that savings can be found as early as possible in 2013 to meet expenditure commitments, management has indicated that these intensive discussions should conclude in a matter of weeks. While it would not be appropriate to comment on the detail of a possible future agreement while those discussions are ongoing, any measures agreed must result in cost savings to the tune of €1 billion over the next three years. It will be important that the Government is able to verify these cost savings, as has been the case for the current agreement.

The Government has been, and will continue to be, acutely aware of the needs and interests of the users of public services. The Government’s ambitious Public Service Reform Plan was published in November 2011 and sets out the basis for the comprehensive and strategic reform of the Irish public service. The plan includes a core commitment to “place customers at the core of everything we do”.

In the context of a smaller and leaner public service, there is a requirement to become more strategic and flexible and to focus on supporting citizens and businesses where and when they need it most, including working across business functions and across traditional organisational boundaries.

In this context, the plan sets out a range of actions to improve the citizen’s access to, and interaction with, Government services by providing more integrated services through more efficient and accessible channels, by reducing the information and administrative burden, and by engaging with citizens and business customers in the design and delivery of services.

There is a need to make this interaction with the State as simple and efficient as possible and to improve the customer experience in engagement with the public service. This is addressed by all Government Departments and offices through their customer charters and customer action plans, and also through a range of customer service improvement initiatives at organisational and sectoral level, many of which are set out in departmental integrated reform delivery plans.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I welcome the Minister of State, Deputy Brian Hayes. I understand he is standing in for the Minister for Public Expenditure and Reform, Deputy Howlin, who is away today.

I have a couple of questions. I am calling for the Government to commit funding to ensure there is an independent review. The Department of Public Expenditure and Reform, which is leading these talks, did not exist when the Croke Park agreement was originally set up. Over the past year, they made one effort at reducing costs, which was on the issue of allowances. They promised savings of €150 million per annum and 5% of the target was achieved. Clearly, therefore, there is neither the competence nor the ability within the Department to assess properly the savings that can arise from this. Past experience has shown that.

It is important for the public to recognise that the Government is the main employer in the State, while the trade unions are representing employees' interests. From the Government's viewpoint the negotiations are to cut costs, while the trade unions wish to look after their members' interests. Despite the document that was published last year, I do not see on that agenda any concern for front-line services and the public interest. It is not sufficient to say "We issued the document last year dealing with that. That was then and this is now, and we have to move on now with our cost-cutting programme". This cannot be done.

I think the cost of leaving is budgeted at €110,000 per person, plus their pension to which they are entitled. It is a large cost and the public would like to see that justified. The Minister of State referred to a figure of €1 billion in savings, but will he add on to that the €400 million cost of the redundancy package? Will it essentially be €1.4 billion in gross savings, or is it €1 billion minus the savings to be made, while excluding the actual costs incurred to achieve that €1 billion?

Brian Hayes (Dublin South West, Fine Gael)
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I will take the latter issue first. The Government is firmly of the view that savings in pay and pensions over the next three years must bring in a net saving of €1 billion. We have set out our plan for 2013 of €300 million and the remainder in 2014 and 2015. It is against a background where three years ago the totality of public sector pay and pensions in this country was €20 billion. As of today, it is €17.5 billion. We have taken out - and, I recognise, so has the previous government - €2.5 billion over a three and a half year period. We have gone a long way but we need to go further. One way or the other, we have got to make these savings of an additional €1 billion in pay and pensions over the next three years.

This morning, the Taoiseach told the Leader of the Opposition that it is the Government's firm view that we want to do this by agreement. We think an extension of the Croke Park agreement and the mechanism provided is useful in coming to some arrangement, but difficult issues have to be resolved here. It is important to say that, with or without agreement, these savings have to be found.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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There are two elements to my question. The first relates to the issue of pay equity in the new round of negotiations. The Minister of State is right in saying that this morning the Taoiseach committed himself to a preference for change by agreement. However, he has also said - he repeated it this morning - that in the absence of an agreement he is quite prepared to legislate for the changes and reductions that are required. I do not know how useful it is to articulate that position in terms of the discussions with the trade unions, but be that as it may.

On the issue of pay equality, we had graduate nurses and midwives in today. They have a clear sense that they are being singled out for unfair treatment. They are being asked as graduates to enter the system at only 80% of the rate for their professional job. This decision was made unilaterally and there was no consultation whatsoever by the HSE or the Government with the representative bodies. The Minister of State makes noises about change by agreement, followed by sotto voce soundings about legislating if no agreement is forthcoming, but all of that is blown out of the water by the fact that in the case of these young graduates, the Government has acted unilaterally.

Brian Hayes (Dublin South West, Fine Gael)
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While the question of the graduate scheme in the health service is of course a matter for the Minister for Health, the reality is that ten years ago, Ireland had a public sector of approximately 290,000 people. Today, even on foot of the reductions in the total number over the past four years of 30,000, it still has approximately 290,000 people, despite the collapse by one third in the taxation base in the intervening period. We must find novel ways in which to engage talented young people right across the public sector and to so do in a way that is commensurate with what the State actually can pay in the current circumstances.

The Deputy spoke about the question of equity and she is right about that, as it is important that there be pay equity right across the public sector. The Deputy regularly speaks about people in receipt of salaries of €100,000 but I note that of the 290,000 people employed in the Irish public sector, approximately 6,000 have salaries of €100,000. The great majority of people who work in the public sector are in receipt of average and modest pay. If the Government is going to make these savings and get the expenditure level down to a sustainable level in a circumstance in which 36% of everything it spends goes on public pay and pensions, there must be a leaner and more efficient public service. Moreover, it must be a public service that does things differently and which works in a way that ensures the quality service gets to those who need it most, and this is being achieved.

Michael Kitt (Galway East, Fianna Fail)
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I will allow brief supplementaries from Deputies Sean Fleming and McDonald. We will take both together.

Seán Fleming (Laois-Offaly, Fianna Fail)
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While the concentration is on a reduction in numbers, I wish to put on record that part of the increase in numbers over that decade was due to the provision of additional resource teachers and special needs assistants in schools. This represented the biggest single increase in staff numbers and that cannot be ignored. I hope the Minister of State does not suggest the numbers that were increased over those years should be in some way reversed because that would be a retrograde step.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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The Minister of State's comments on cutting one's cloth according to one's measure and all the rest would be fair if that was levied equally across the system. However, it is not and I will give the Minister of State an example. When a clinical director who is a consultant takes up a post, he or she gets an additional allowance of €46,000, which is more than the equivalent of two nursing salaries under the so-called graduate scheme. The Minister of State correctly stated that the vast majority of public and civil servants would only dream of earning €100,000 in any given year, but as he quite correctly mentioned, there are those 6,000 people at the top. As the Government negotiates this new agreement to find €1.4 billion in savings, where will it come from? Is the treatment being meted out at present to graduate nurses and midwives a forecast of what is to come for other jobs and professions? In the current economic climate, which the Minister of State has acknowledged, to brag about a pay cap of €200,000 is sick.

Brian Hayes (Dublin South West, Fine Gael)
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What is sick is to pretend to people that one can solve this problem by taking out everyone on a salary of €100,000, putting them up against a wall and doing what the Deputy's former comrades used to do to them. That is sick, in a circumstance in which the great majority of people who work in the public service are not on that kind of money. If one is serious about dealing with this fiscal problem, which with respect I suspect the Deputy is not, one must address expenditure and taxation at the same time. The point the Deputy ignores is there has been inequality of contribution, in that those at the very top of have seen pay cuts of up to 30% in some circumstances, those in the middle have seen pay cuts of approximately 15% and those at the bottom have seen pay cuts of 5% or 6%. The same pattern is replicated on the pension side but the Deputy does not recognise that.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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The Minister of State does not recognise the huge gap in earnings between those categories of people.

Brian Hayes (Dublin South West, Fine Gael)
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On the question that Deputy Sean Fleming quite rightly asked about teachers, one point on which I wish to agree with him is that even with the reductions in public servant numbers the Government and its predecessor were obliged to introduce, there still will be more teachers in the system. The reason is the number of children coming into the schools has not been at the current rate since the 1880s. As a result of more children coming into the primary schools, more teachers are being seen and the Government is proud that despite these adjustments, it has managed to enable more teachers to come into the schools. The Government has not cut class sizes and has managed to do this in a tight fiscal position. This is an achievement of which the Government is very proud.