The Dáil has been rightly preoccupied this week with the problems of the past but the problems of the present and the future remain as urgent as ever. One of the biggest challenges facing the Government in the months ahead will be to find a way of dealing with pressure to restore pay rates in the public service to their pre financial crisis levels. Meeting that demand within the constraints of EU fiscal rules that apply to the public finances will not be easy.
Minister for Public Expenditure and Reform Paschal Donohoe made it clear yesterday he is committed to a collective approach to public service pay that will involve negotiating a successor to the Lansdowne Road Agreement. Talks on that agreement won't begin until the Public Service Pay Commission reports at the end of April.
The Commission has been given the task of coming up with an evidence-based analysis of how the “Financial Emergency Measures in the Public Interest” can be unwound in a fair and acceptable manner. Assessing the value attached to public service pensions is a key part of the Commission’s remit and its conclusions on that issue will play an important part in determining whether a deal is possible.
There appears to be a willingness in Government to use available resources to phase out the emergency measures such as the introduction of a lower pay scale for young newly recruited public servants employed after 2010.
Finding the money to restore full pension payments to their pre-crisis levels is another matter and this is where the Commission’s findings could prove crucial in influencing how the available resources should be best used.
One of the issues stressed by the Minister was that reforms in work practices had played a key part in delivering the cost savings required to get the pay bill under control. He suggested further efficiency measures will be required to help fund the restoration of the old pay rates.
The unions have always known that pay cuts can be reversed if conditions permit but productivity measures tend to be for good. If the Pay Commission reports on schedule it is expected that formal talks between the Government and the unions will begin in May and continue over the summer. Any agreement would have to be reached in advance of the budget in October so that provision can be made for pay increases.
As well as the obvious difficulties faced by the Government and the unions in reaching a new comprehensive agreement, the political uncertainty of the months ahead will add another unstable ingredient into the mix.
A new taoiseach is expected to be in place around the time the talks are likely to begin and a cabinet reshuffle, which could see Mr Donohoe moving to a new department, will follow. Both events have the capacity to throw a spanner in the works.