Thursday, 9 October 2014
Haddington Road Agreement Implementation
7. To ask the Minister for Public Expenditure and Reform the number of persons across the public service who are subject to a freeze on increments in 2014 as a result of the Haddington Road agreement; if this includes bodies or agencies funded by the Exchequer; if he has satisfied himself that the agreement is meeting its objectives across all Departments; his plans to carry out an interim review of the implementation of the agreement; and if he will make a statement on the matter. [38159/14]
I wish to ask the Minister about the number of persons covered by the Haddington Road agreement who are subject to a freeze on their increments. Does this include bodies that are publicly funded by the Exchequer and does the Minister intend carrying out any interim review of the agreement?
Over the first 15 months of its lifetime, the agreement has been a key enabler in reducing the cost of the public service pay and pensions bill. The cost reductions and productivity increases - the reform dividend, which I explained in some detail the last time we discussed this, which the agreement has facilitated - has allowed the Government the scope in 2014 to recruit additional staff to key front-line services. This demonstrates that the agreement is delivering.
With regard to carrying out a review of the implementation of the agreement, the Deputy may wish to note that it is my intention to publish the annual report of the public service reform programme, including the specific issues addressed in the Haddington Road agreement, in early 2015 in line with the commitment in the Government's public service reform plan.
The Government's focus is now on continuing to maximise the provisions of that agreement and to ensure that the cost of public services and the public service pay bill are kept at sustainable levels. This will require tight control of the public service pay bill while also re-investing some of the benefits of the agreement as things improve to ensure that public services are delivered in the most effective and efficient way. In that context, decisions on future savings and service dividends arising out of the Haddington Road agreement will form part of the overall budgetary process to be announced next week. The terms of the agreement apply to public servants. It does not apply to the employees of bodies that are funded by the State but are not public service bodies as such.
With respect to the query by the Deputy on the numbers affected by increment freezes in the public service, I would refer him to my reply to him on 17 September in which I provided him with this information for the Civil Service. The position as outlined in that response remains unchanged. I understand the Deputy has sought similar information from the relevant Departments in respect of the wider public service so he probably has better information than I have.
I thank the Minister for his answer. It is clear from what he is saying that there will not be a specific review of the Haddington Road agreement. The Minister said that there will be something about it in the public service reform plan the Government is publishing in 2015. It is interesting that he went through that again with no specifics in terms of numbers across the public service - not just the Civil Service but the HSE, local authorities, education and teachers, which are covered by the Haddington Road agreement. He said generally that the figures would be masked in the budget figures the Government announces next week. That is symptomatic of this agreement.
The Minister seems to be suggesting that due to natural retirement, the cost of the public service is coming down because we have not been recruiting as many people as we did in the past except in key areas like teachers and some additional new gardaí. It is interesting that the Departments referred to by the Minister and to whom I have written have not been able to give me any specific savings as a result of the Haddington Road agreement. Savings are taking place in the public service with or without the agreement. We are trying to find out how many of those savings are attributable to the agreement but the Minister does not seem able to provide that information.
That is not so. In the period 2008-13, the Exchequer pay bill fell by 19% through a comprehensive set of measures, including pay and pension cuts, reductions in numbers, restrictions on recruitment, redundancy programmes and so on. The 19% reduction in the pay bill delivered an annual saving of €3.3 billion for the Exchequer for the year. It is a concrete figure for up to last year. There were further substantial falls this year through implementation of the pay reductions under the Financial Emergency Measures in the Public Interest Act and the productivity increases under the Haddington Road agreement. In 18 months, we have made over €800 million in underlying savings.
I indicated to Deputies before that as we recover, I do not want simply to pocket these savings in order to retire debt. Nobody in this House would disagree that we should reinvest some of that money in front-line services. We can do more through efficiencies in back-line services but we should release some of those savings to provide for more nurses, special needs assistants and gardaí, which we have begun recruiting again. We should use it for the elements we need on the front line. Nobody opposite would object to that strategy as we emerge from our difficulties.
Of course, I agree with the last part of the Minister's comment. He mentioned a €3.3 billion figure earlier, amounting to a 19% saving in the public service pay bill from 2009 to 2014. We know who achieved most of that, as it occurred when my party was in government. Most of it happened outside of the Haddington Road agreement. I ask how much of the €3.3 billion that is repeatedly mentioned comes from the Haddington Road agreement. It would be good for the public service and the public as a whole if the Minister could demonstrate how much of the €3.3 billion arises from the agreement. We would support savings being reinvested but we do not know what are the savings arising from the Haddington Road agreement. The Minister mentioned public sector pay and pensions cuts and recruitment freezes; all these contributed to savings, which can be estimated, but we have not got a figure for the specific savings arising from the Haddington Road agreement. The Minister keeps saying the figure is in the annual Estimates.
The Deputy knows they have been included in each Vote and I have explained this repeatedly. In the 18 months of the Haddington Road agreement to date, we have made over €800 million in underlying savings. That has enabled me to invest €250 million more in meeting the costs of employing more front-line workers, as I have indicated. There are more gardaí, nurses, special needs assistants and so on. It is a better strategy. As our position appeared to be improving earlier in the year, I discussed how we would not simply retire all the money from the Haddington Road agreement savings but redeploy some of them into front-line services in order to ease pressure. We have invested €250 million in that process, which will continue to next year. I do not want to give a false impression that all the restrictions will be undone but we do not want simply to retire all the money saved into the Exchequer to pay down debt. We want, in a structured way, to meet the real pressures pent up over the past six years about which all of us know. These are real issues for the delivery of front-line services.