The Government has accepted the Labour Court recommendation for a €40 million increase in Garda pay next year but is insisting that the money will be taken from existing public services rather than tax increases.

Minister for Public Expenditure and Reform Paschal Donohoe said after a Cabinet meeting on Tuesday that Ministers had reiterated their commitment to the Lansdowne Road agreement and a collective approach to industrial relations.

He said he would discuss with Tánaiste and Minister for Justice Frances Fitzgerald where the money would be found to pay the extra €40 million if the Garda associations accepted the Labour Court recommendation.

Mr Donohoe was emphatic that, in the absence of the Lansdowne Road agreement, there would be consequences for public spending across the board.

The Minister accepted that, following the Garda recommendation, other unions were now raising the concerns of their members.

"The Labour Court recommendation has very significant consequences for An Garda Síochána and it does have consequences that are now being raised by other unions.

Economic recovery

“Any changes we have in the Lansdowne Road agreement have consequences for everything else the Government wants to do. But I am also making it clear that the Government will not be increasing income taxes because I do believe that the level of income tax has played a vital role in the economic recovery,” he said.

Speaking after the Cabinet meeting, Mr Donohoe said Ministers had reiterated their commitment to a collective approach to industrial relations and pay policy as the most effective means of delivering economic security and stability for the country.

“Our commitment to continuing with a collective approach to pay policy is heightened by the consequences of the Labour Court recommendation, which was issued in respect of An Garda Síochána last week, as well as by the external risks and challenges that may lie ahead.”

He said the Government had accepted the Labour Court recommendation, coming, as it does, from the final arbitration body of the State, for which the Government has long-standing respect.

“The recommendation, however, has far-reaching consequences, which will be dealt with collectively by Government and within existing budgetary allocations.

Collective agreements

“Collective agreements deliver mutual benefits to the employer and employee. I value the work and commitment of our public servants but we must ensure any approach to pay restoration is within the parameters of what is available and affordable. This allows us to continue to improve services in the years ahead and proceed along the path of using a strong economy to build a fairer society. This must be fair to everyone; those who work in our public services and those who depend on them,” he said.

Mr Donohoe said he met the Public Service Committee of the Irish Congress of Trade Unions on Monday.

Mr Donohoe said the Government wanted an affordable and fair deal for everybody, and consequences for public services had to be taken into account if the public service pay bill exceeded the revenue that had been allocated for it.

He said there would be significant consequences for the delivery of public services in the absence of the Lansdowne Road agreement but changes in income tax levels were not an option.

The Minister also said the Public Service Pay Commission, which held its first formal meeting on Tuesday, would report back in the second quarter of next year.