Brian Hayes (Dublin South West, Fine Gael)

That will be a substantial reduction over a seven-year period. I recently addressed our parliamentary colleagues in the Bundestag. They asked how we are managing to knock out between 12% and 14% of the public service while meeting ongoing demands. They wondered why more protests are not happening on our streets. We have managed this change without street protests, at a time of substantial difficulty, because the Croke Park agreement is in place. I contend that the agreement will play a key role in facilitating the delivery of the planned reduction in staff numbers. The co-operation and engagement of staff across the public service is vital if we are to do this successfully. The buy-in of staff at all levels is needed if the significant redeployment, restructuring, rationalising and reconfiguration that is needed is take place. We will not be able to do that, in a highly unionised and disciplined workforce, if the workers oppose us.

There appears to be a widespread misunderstanding about what the Croke Park agreement is and is not. It is important to emphasise that it is not a cost-saving plan in itself. Savings are made when the Government or the management of the public service decide to implement change to services and work practices, introduce new technology and agree that the number of public servants can or must be reduced. The agreement provides the consultation framework to manage changes in work practices and service delivery, boost productivity and improve efficiencies as the number of public servants decreases over time. The agreement is a mechanism for securing the active co-operation of staff for the changes that are needed to ensure the significant ongoing reduction in staff numbers does not have an adverse impact on services.

In many respects, the Croke Park agreement is the exact opposite of a partnership agreement. Rather than paying and hoping for the best, the deal makes it clear that if public servants do not help us to extract costs, improve productivity and implement reform, we will not be able to stand by our commitments to them. The unions understand what the agreement involves. The deal for the public services is twofold. We have agreed not to hack away at salaries again, to use an awful phrase, as long as two conditions are met. First, the personnel reductions that are set out in the plan need to be achieved. Second, the reform agenda has to be bought into and supported. I admit that the second aspect of the deal is more nebulous, but it has to be achieved in 2012. We have made it clear to the unions that if they work with us on the reform agenda, by keeping front-line services in place while totally altering the deployment of back-office staff, we will be able to meet our pay, numbers and pensions commitments. They have to buy into the concept of doing things in a totally different way as any business would have to do in these circumstances. I think the unions understand that it is a two-way process. They have managed to meet us in terms of the agreement we need.

We have to address the misperception about the contribution public servants have made towards our recovery. It is too often a case of "eaten bread is soon forgotten". The reality is that the take-home pay of public servants has been significantly impacted since 2008. I refer to the following: the non-payment of the general round pay increases under the terms of the 2008 review of the Towards 2016 transitional agreement; the imposition of the pension-related deduction of an average of almost 7% to all the earnings of all public servants in March 2009; and the reduction of between 5% and 20%, depending on salary level, in the rates of pay of public servants. We tend to forget that the average pay reduction suffered by a public servant has been 15%. The average reduction at the top has been 30%. Consideration also needs to be given to the universal social charge, PRSI and all the levies that have been put in place. We often forget that the real and substantial reductions which have occurred since 2008 have made a huge difference to the earning capacity and spending power of public servants, many of whom have substantial mortgages and are finding it difficult to make ends meet. We often hear about the glorious example of the elite at the top of the Irish public service, but are we fully aware that the great majority of public servants are having to cope on a daily basis with the significant reductions in their take-home pay and do more work in return for it?

That is what we and they face in the teeth of the economic crisis. The Croke Park agreement has provided the framework of co-operation and flexibility to enable us to extract all of these necessary savings from the Exchequer pay and pensions bill. The impact of all of these measures is that the total net cost of the public service pay bill will be reduced from 2008 to 2015 by approximately €3.5 billion, that is, 20% in seven years.