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Dublin: 10 °C Saturday 25 May, 2013

Croke Park deal saved €920m in second year, report says

The Implementation Body for the public service pay deal says savings of €900m have been made between pay and non-pay.

Brendan Howlin has welcomed the report, saying it shows staff are
Brendan Howlin has welcomed the report, saying it shows staff are "doing more with less".
Image: Niall Carson/PA Wire

THE CROKE PARK DEAL has resulted in total savings to the taxpayer of around €920 million in its second year of operation, according to a new report from the implementation body overseeing the deal.

The second annual report, published today, reports that public sector staffing levels have been reduced by 17,300 in the first two years of the deal, and by 11,530 in the review’s second year, covering the months of April 2011 to March 2012.

The public pay bill fell by €650 million in those 12 months, with the report saying that the savings would still stand at €521 million for 2012 even if recruitment following February’s spate of retirements filled all the possible vacancies.

‘Non-pay’ savings in public administration saved another €370 million, on top of a similar €308 million saving last year.

In all, the report finds that the deal has saved over €1.5 billion since it came into effect – a figure independently verified by Grant Thornton.

Public Expenditure minister Brendan Howlin welcomed the findings, saying it was proof that the public service was “doing more with less”, pointing to the redeployment of teachers between schools, and FÁS staff at the Department of Social Protection, as proof of the service’s flexibility.

“This Report confirms that the Croke Park Agreement is making an important contribution to our economic recovery,” he said.

That said, we cannot lose sight of the fact that we continue to face very significant challenges. We still have a way to travel in terms of restoring order to the public finances.

SIPTU vice-president Patricia King said it was important to point out that “a large proportion of the flexibility and roster changes have been made by our members at the lower pay scales”.

“These include the general operatives and support grades in the local authorities and health service that we represent. There have also been significant savings delivered by professional grades which are also represented by SIPTU,” she said.

King said the biggest challenge ahead of the agreement would be to ensure that the burden of the changes enforced by the deal were shared across all levels within the public service.

Read: The second annual report of the CPD Implementation Body (PDF)

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Comments (40 Comments)

  • The majority of the savings come from a reduction in staff numbers by not replacing those who leave the system. Is the plan to just keep reducing staff numbers to make savings? Ultimately I don’t see how this agreement can survive. We need to focus on productivity, efficiency and wage levels. The current system doesn’t target staffing levels in specific areas. We have too many staff in many areas and not enough in others.

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  • A good start. The agreement should save the taxpayer over 5 Billion during its lifetime with continual savings and improvements in efficiency on an ongoing basis after that.

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  • FF/FFg must be so proud of themselves, having supported the Croke park deal so far. They have done a great job encouraging people to retire early and then get rehired on contract.

    Any independent report sponsored by a Government source, supporting spurious claims like this drive me nuts with frustration.
    One that springs to mind immediately to illustrate this example is the one Bertie sponsored in relation to removing the Toll Bridges on the M50. For years they got ‘independent’ reports to support their claims that removing the tolls would have zero impact on the movement of cars on the M50.
    However, after they got enough kicking by the general public, they eventually gave in, and removed the tolls. For anyone old enough to remember what the M50 was like prior to the tolls and immediately after the tolls were lifted will be able to see what a load of trip these so called independent reports tell you.

    FF/FFg are one and the same. They will always get Yes men to support any idea they want, in order to drive through any change they want or maintain the status quo where it suits them.

    In this case, we know that the Government handed out the equivalent of 2 years salaries in lump sums to retiring employees as golden handshakes, tax free, and gave them pensions that anyone in the private sector could only dream about. How within 12 months of spending all this money, they can claim they have saved 1 billion euro defies belief. They are liars.
    They dont want to change the pay system, as this would impact their own salaries… Kenny and Gilmore both profit to the tune of over 500,000 per year from maintaining the status quo.
    All the previous ministers including Harney, McDowell, Mcreavy, Bruton, Ahearne, Cowen etc are all living in luxury at our expense. Reform Croke Park. Reduce all pensions over 60k to 60k. No one in this country has done enough to get pensions worth more than that.
    But FFg/Labour/FF don’t want to do ANYTHING that would endanger their gravy train. Thats why we the tax payer will have spent millions on stupid reports that back up what the Government want to hear.

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    • A one man one pension policy needs to be introduced and implemented, it would save the state tens of millions every year. It gauls me to think that these political imposters will live out the rest of their lives in the lap of luxury on multiple pensions financed by Joe Soap. But as you said Cal, they wont derail the first class gravy train to millionaire central.

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  • William what an error – you haven’t nurse in the family whose had her pay cut down by 10%. Then a pension cut by 15% Then another PRD of 10%. Then the Universal social charge on top of that. To make it back up – overtime is none existent and now the allowances for working anti-social days and hours is been reviewed as well. I take it you still enjoy your Christmas Day, Bank Holidays, and Weekends with friends and family!

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  • Re:”€250 million in pay increases were given this year in the depths of a recession!”. Just a small point, that’s not actually true.

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  • mel 13/06/12 #

    How can you make savings if a batch of people retire,they are simply moving from one form of payment to another both from the public purse!
    These should not be counted as savings,total nonsense

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  • mel 13/06/12 #

    Well,true……leaving aside the fact that a public service retirement fund does not reflect the true cost of providing the retiree the pension payment ,my point is that the majority of these people would have being retiring anyway and unlike private pensions these pensions are paid from current government expenditure which means it isn’t a real saving ie the 950million “saving” does not allow for the cost of paying these pensions which most definitely would reduce this figure
    Also why are we still allowing people to retire in this state at 50yrs old . A retired soldier could have worked for 30yrs and retire and could live for another 40yrs so he would be retired for longer than he ever worked……. The whole public service retirement fund is a giant ponzi scheme…..but this government hasn’t the balls to tackle it

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  • Think your reforms would have much more bite if you cut the over-weight, over-sized, over-protected pensions and expenses you and your colleagues get. I make no shame of saying I’m orgainsing ‘sli nios fearr’ to make reforms the likes of which you’ll never get your head around!

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  • peter 13/06/12 #

    I repeat the public service did not cause the recession and therefore are not the solution to it. Easy targets

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  • A hell of a lot more would have been saved in public sector spending if the agreement wasn’t in place. 80% of expenditure in Dept of Education is pay & pensions, and 44c in every Euro spend in the “health” service goes on Admin. Under this deal that protects a sector of society unfairly, €250 million in pay increases were given this year in the depths of a recession!

    We will get no deal from Europe on our bank debt as long as the civil servants who are trying to negoiate it by saying we have no money, continue to get paid more than their German counter-parts and as long as we refuse to tax the wealthly in this country.

    The Croke Park deal is the public sector tool to insolate themselves from the recession and ride it out while the rest of us suffer. A friend of mine in the civil service (it’s not his fault that the system is wrong) told me that “they have to pay the civil servant well, sure who else is going to spend in the economy”. Removed from reality or what?

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    • Isolate them from recession? Don’t make me laugh SCP. Most public servants make less than the average wage. 40% of those make less than 20 grand a year. The entire public sector took on average a 15% pay cut on top of the levies and USC that other workers took. The croke park deals purpose was to prevent any FURTHER PAY CUTS on top of the 15% already imposed, in return for savings and efficiencies amounting to 5 billion over the lifetime of the agreement.

      If you’re going to bash the public sector, you should make the distinction between lower paid and higher paid people. And while you’re at it, try advocating top earners in the private sector putting their hands in their pockets as well.

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    • Too True Left, i really don’t think SCP is in favor of forcing further cuts on the lower earners in the Public Sector. The majority of earners in the public sector are earning less than 35k per year.

      However, its the highest earners (over 100k per year that are forcing the overall wage bill up to the point that is causing this country’s hardship). Its the 100k + folks that need to have their salaries reduced, but unfortunately the Croke Park deal was written in such a way, that if you try to tackle the high earners (over 100k per year), then the whole lot comes crumbling down. This was a cynical move by FF and is supported by FFg/Labour as any reduction on the highest earners will directly impact their salaries too.

      Not for one second should anyone earning less than an appropriate threshold of 60k should be touched. This means that the earners over 100k (who make up the majority of the wage bill for the Public sector) need to have their phone number salaries and pensions eliminated.
      To see the day where Bertie Ahearne goes to the post office to collect his pension and for him to see that its reduced from 140k per year to less than 35k per year (because he hasn’t accrued 40 years of service) will be the happiest day of my life.

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    • Totally agree with you Cal. There should be a pay cap of €100,000 imposed in the public sector for the foreseeable future. Having said that, in the interest of true burden sharing of the injustice imposed on us income tax increases on ALL sectors starting at 70K would at least introduce some degree of fairness instead of constantly hitting lower paid people. It might help address the tactic of turning one sector against the other while the elites laugh all the way to the bank.

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    • Cal “This means that the earners over 100k (who make up the majority of the wage bill for the Public sector) ” – just a small point. That’s not actually true. Those earning over 100k constitute 2.2% of those employed by the public sector.
      http://www.impact.ie/Croke-Park-Agreement/News/Would-cutting-high-pay-save-jobs-and-services-.htm

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    • Just to contribute to this – it might be of interest to see what the government estimates its savings would be if all public pay was capped at €100k.

      http://debates.oireachtas.ie/dail/2012/05/10/00078.asp

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    • Enda should start with his own pay and expenses. Until he does that he cannot touch anyone else.

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    • Gavan, interesting indeed, as it would quickly emerge which professional group would be most (spectacularly) affected. Not for me to say in this context, but most recent OECD report on the cost of government will show you exactly where.

      But on the same point, if the issue is equity, rather than savings, why look solely at the public service when huge income inequality exists across the economy? Research by TASC has shown that over 70% of Irish people are concerned about wealth inequality and 85% want the Government to tackle it.

      Some – like the New Economics Foundation in Britain – have made the case for a maximum wage as a means of tackling inequality from the top as well as the bottom. But the simplest way of addressing income inequality – and raising some extra badly-needed exchequer funds – would be to increase taxes on high earners, regardless of which sector they are employed in. This could take the form of a temporary levy on those earning six-figure salaries, at least for as long as the troika ‘bail out’ remains in place.

      Until we have a grown up discussion that looks at it this way, those of us who represent workers in the public sector only have the verified annualised savings to offer as proof that the same workers are taking these challenges very seriously. Always absent from these types of discussion are alternative suggestions on how to achieve the same savings without collapsing public services (which we need more than ever during a crisis).

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    • ECB says no deal on bank debt until public sector pay rates are brought into line.
      http://www.thepropertypin.com/viewtopic.php?f=51&t=43701

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    • Just want to point out ive been posting on the journal for a number of weeks now as Scrap Croke Park but it appears there are now two of us. As the “newcomer” has the @scrapcrokepark twitter name I’ll change mine.

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    • spot on. have cost of redundancies been forgotten. everending lies

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  • 920m saved, great! Now remind us once again what the annual public spending deficit is at this stage?

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  • Aarum 13/06/12 #

    Great savings….. Theft crime highest it’s ever been and people left on trollies for hours and hours, job well done so?! idiots

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  • And for the record, I am not advocating further cuts to those within the public sector who earn less than or around the average industrial salary. However, I do believe that there are a whole cohort within the sector who have been practically immune from the recession because cuts have been passed on to those with little or no voice of opposition….yet!

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    • William ur fighting a losing battle :-(. Croke park is designed to protect those at the top, not those on the lower paid scales. But when any mention of cuts is made the unions rabble rouse and convince the low paid it’s their money people are after.

      Meanwhile the union leaders in this charade are all taking salaries way in excess of their abilities or responsibilities.

      Inda Kenny needs to set a precedent first by cutting his own pay so that he earns less than Cameron or Merkel

      Until he does that he has no right to target lower paid public servants like Sara above

      @Sara. Good luck with the new baby and new life in Oz. Sincerely hopes it works out. I’d go too if I was in ur shoes looking at higher paid civil servants and politicians slurping and gorging themselves at the trough whilst letting lower paid members descend into abject poverty. It’s high time the elite in this society unlatched from the nipple of the state.

      Enda Kenny makes me physically sick

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    • Thanks very much, Scrap Croke Park. That’s very kind of you.

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  • Sara think ur mixing martin s comment up with Williams . Of course we have had pay cuts my cheques are less than half they were in 2007.william not got a clue , we still have 2007 bills . Really get annoyed with people talkin nonsense.

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  • @ Sara, can you please direct me to the section in the 2009 Budget that states that existing public sector salaries are to be cut by 10%. I know new entrants were cut by 10% but I made that point explicitly. FYI page. 4 “Public Sector pay will not be cut” http://www.inmo.ie/_INO/Documents/Budget_Summary_Public_Sector_corn_market%2012-10.pdf

    @ Too Trueleft, if public sector workers suffered a pay cut of 15%, then is the Croke Park Agreement not defunct? As I understand it, the CPA protected public sector pay.

    @ Martin, no I don’t have a nurse in my family but I have a father who has had his pay cut, has seen no increase in pay since the financial crisis started and whose job is never secure. The same goes for all my siblings. What compensation do you make for the fact that despite the decrease in earnings your wife/sister (?) has endured, she does not face the threat of losing her job?

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    • No, Martin, you’ll have to investigate yourself. I have 2 small kids and another one due in a few weeks so I have enough in my plate. The reason i remember the day the pay cut was announced is because my second baby was born that day. But, I will tell you that because of the 15% pay cut that was applied to my salary in Jan 2010 this baby is going to be born in Australia. Because my husband and I, both public sector workers, couldn’t afford to stay in Ireland any longer. And the Croke Park agreement was brought in AFTER those pay cuts to protect our pay from FURTHER cuts.

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    • I’ve work in the private sector all my life and understand you do choose your vocation and the job your able for, or which comes your way – even the choice to take a risk an open a business or be self-employed. Been there too. But we make of it what we can. The crisis we face is unreal; even ‘our’ nurse has contemplated emigrating because the stress of working at the front end of the service – when the embargo has meant no more staff cover. Our problem does not lay with them; the Gards or the passport/ revenue clerk. But as the civil service is moreover like an upside down pyramid the problem is the dead weight at the top throwing the balance of everything. We need to reform the top tier or else the whole thing will fall.

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  • Let’s get one thing clear, public sector workers have not had a pay cut. To claim that you have already had a 15% pay cut because of changes to pension arrangements (arrangements that are incredibly generous to begin with) is simply wrong. Public sector workers have seen no reductions in their base salary, their allowances or their increments.

    The Croke Park deal negotiated by the various unions left new entrants to the public sector the sole target for pay cuts. The difference in pay between a new entrant and a existing public servant is vast and in terms of cohesiveness within the public sector, it is simply not sustainable in the long-term. Why would one worker do the exact same job as another for a lot less money simply because one was lucky enough to start a year earlier?

    The Croke Park deal absolutely guarantees future industrial action to reinstate parity of pay. A fragmented public sector is in no-ones interest.

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  • @Gavin you should investigate how much off these savings should be off set against the cost of taking in extra agency staff especially in the health system. while there is ban on recruitment there is no ban on agency workers

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