The Government is facing an ever-growing list of demands for increased spending but with very limited resources to meet them. That is always the fate of governments. But the situation of the present administration is especially acute.
One month into the year and the Government has already conceded two substantial amendments to its previously committed budgets for public sector pay, as the after-effects of the pay concessions to gardaí last year to avoid a strike continue to reverberate throughout the public sector.
This week, it will signal another concession, when it admits special circumstances in the nursing profession, thus opening the possibility of a special pay agreement with nurses, too. They will not be the last.
The demands the Government faces are intense and, in a system that was starved of resources throughout the years of austerity, not unjustified in many cases. On public sector pay, the need for additional spending is felt acutely by a well-organised and effective lobby. Health, education and social protection have further needs for investment intensified by demographic pressures. A great deal of political discourse is dominated by shortcomings in public services.
Authority
These demands are piling onto a Government whose authority and capacity are weak.
The weakness and lack of capacity manifest themselves in two principal ways. Firstly, its strongest defence – we are sticking to the Lansdowne Road Agreement, and that’s that – has been blown out of the water. The Government can’t say it won’t budge because it has already budged.
Secondly, the Government’s political capacity is weak. Hardly a week goes by nowadays without it losing a vote in the Dáil. The Government has proved especially vulnerable to Private Members’ motions on causes that Independent Alliance ministers have previously supported. That is not a terribly short list.
The device to square this political and economic circle is a pair of reviews: the Public Service Pay Commission, which is examining pay and pensions, and a comprehensive spending review.
The Minister for Expenditure Paschal Donohoe – who is in the eye of this particular storm – has insisted that the vastly superior pensions of public sector workers, as well as their job security and other conditions, should be taken into account by the commission in its report. That might make for some interesting arithmetic, but the political reality is unless the commission delivers a route to pay increases – and possibly significant pay increases – for public servants, there will be war in the public service. That would probably break the Government.
Memorandum
The spending review is currently getting under way, and will examine one-third of all non-pay Government spending this year (it will run for another two years). A cabinet memorandum, circulated to Ministers before Christmas and seen by
The Irish Times
, makes clear that the review is designed to make government departments prioritise their spending. The idea behind it is to make departments find the resources within their own budgets for any new spending programmes or requirements.
The reviews and reports are useful exercises, senior political and official sources are convinced. But they acknowledge also that they will not be a substitute for the political will required to face down spending demands around the cabinet table, and to maintain budgetary discipline. Nothing ever is.
