Tackling the cost of the public service today is a major problem for the Gov. but it will be hard to see how they can do it effectively.
The Gov don’t want to tackle civil serivce pay but in time may may be forced to.
My view is that they will always go down the less painful route. Cutting civil servant pay would lead to strikes, etc. They will avoid this at all costs.
Easier solution, in the sort-term (2012 and 2013) is to
a) Announce a voluntary redundancy scheme.
I think this will be announced, for all public servants, later in 2012 or in time for Budget 2013, after the stampede to get out by the Feb 2012 deadline to avail of better terms.
James O’Reilly stated, shortly after winning the election and becoming Minister for Health, that he would bring in a voluntary redundancy scheme for the HSE. This would be similar to the one FF had, but that one was rushed and didn’t give people enough time to consider their options.
He has been notably quiet on this since then, probabaly because he was told loads will go by Feb 2012, and to wait until after then.
Any scheme should have a cap of, say €20K ex-gratia per person.
b) Postpone increments for a few years.
This is very contentious. The amount it would save per year, gross, is debatable. Brendan Howlin has said prelimary estimates are c. €250m for 2012.
This figure cannot be very accurate, simply because the Gov hasn’t a clue as to how many public servants will retire by end of Feb 2012. Many are waiting until the min. notice date (end of Jan 2012) before showing their cards. So we must wait until later in the year to assess this cost.
Even if €250m was correct, puiblic servants pay tax like everyone else, so you can take away a third or so off this figure. €150m, net, may be more accurate.
It is worth noting that only 37% of civil servants were entitled to an increment in 2011. This figure will likely drop in 2012, with the pending retirements. Of these 37%, some 53% are clerical officer and service officer grades, the lowest paid workers.
Brendan Howlin has said many times that to stop increments you will simply penalise the lowest paid workers more. You also penalise the youngest workers, as these are the most likely to be lower down the scale and entitled to an increment. He is clearly against it but the media and backbenchers have been rumbling more and more lately.
One solutuion, so far not mentioned, would be to postpone increments for workers on gross salaries over, say €50K. The problem though is that this will be less than 15% of those entitled to an increment, and therefore not make much savings.
I would be opposed to stopping increments for the lowest paid public servants.
