Manifesto Memories

The Irish Times reports

NEARLY 50 hospital consultants and almost 1,000 nurses of different grades are set to leave the health service before new pension changes come into effect at the end of February, the first official figures show.

and

In other parts of the public service about 1,130 staff in the education sector are understood to have applied to leave

This brings back memories (misty water-coloured memories) of pre-election promises

Additional Reduction in Back-Office Public Sector Numbers: As set out in our Reinventing Government plan, Fine Gael will reduce the size of the public service by 10% – just over 30,000 – without undermining key front-line services in health, policing and education, through over 105 reforms to cut back-office bureaucracy and delivery improved value for money. This means that Fine Gael will reduce back-office administrative positions in the public service by an additional 18,000 over and above the 12,000 reduction partners to seek further efficiencies in work practices

I guess these are back-office consultants, nurses and teachers.

73 thoughts on “Manifesto Memories”

  1. Destroying human capital to pay interest on malinvested credit.
    Its just another manifestation of long term decline.
    It does not prevent the internal bleeding in this state.
    More leeches I suppose.

    Question ?
    What exactly are the Garda instructors doing these days ?
    Soon all Garda will loose their culchie accents me thinks.
    Soon most will be gone.
    Although we have had to protect ourselves for some time now……

    http://www.youtube.com/watch?v=jPISMWa0SMU

  2. Karl,
    Any suggestions what we could do to retain this talent. Increase their pay or pensions to encourage them to stay. Are these people leaving voluntarily or is their departure compulsory?

  3. @Tullmacadoo
    How about do what any other organisation would do. Not offer such brilliant redundancy packages to staff that are needed and make redundant those that are redundant.

  4. Does anyone seriously believe there aren’t layers of nurse bureaucrats also?

    Check the staffing of any HSE Area and ask for the number of: Directors of Nursing (formerly called ‘Matrons’), Assistant Directors of Nursing, Divisional Nurse Managers, Clinical Nurse Managers III, Clinical Nurse Managers II (finally we get to the grade formerly called ‘Ward Sisters’), and Clinical Nurse Managers I. Oh, and don’t forget about all the nurses who have moved into other Administration/managerial roles in, for example, Health Promotion, Suicide Prevention, Clinical Audit, etc. which could not be considered ‘front line’. Those retiring now are probably looking at all those nurses who retired previously and have since been brought back (lucratively) to work on the cervical vaccine programme or the flu jabs while newly-qualified nurses have been forced to emigrate or other young nurses have had their contracts cancelled.

    Don’t get me wrong. There’s overstaffing and deadwood in all parts of the HSE but the nursing profession cannot be immune from criticism. International studies show that we have a very generous ratio of nurses in Ireland. The issue is one of both low productivity and too many hospitals or community nursing units, etc. i.e. too many facilities and not enough density (without losing any beds). There’s agglomeration economies in health services also. The lack of these in Ireland accounts for much of the overstaffing at all levels in the HSE.

  5. Sam,
    An excellent suggestion. These highly paid staff in some cases v highly paid staff are making a perfectly rational financial decision at the tax payees expense.

  6. But it’s not like a private company.

    They aren’t are applying for a voluntary redundancy package and it can be managed/refused. They are taking retirement and cannot be prevented from so doing.

    Or can they? If the most experienced staff are running off with the pension, AFAIK there isn’t a thing the government can do.

  7. The normal practice in downsizing CS/PS is to offer time limited severance packages that favour employees that are within five years of retiring. This usually amounts to waiving the penalty that they would normally incur for not meeting the magic number (usually 85) of years served plus age. In all cases the employer retains the right to refuse the offer to essential employees. In order to dislodge staff nearing retirement that have reached the magic number a cash severance of one week per year served is normal. In all cases the threat of layoffs without severance or waivers has to be hanging over the employees. This works where layoffs are based on merit (dismerit) and not last hired first laid off. I expect that merit is not a concept that is highly valued in the Irish CS/PS so the usual tools to efficiently cut the CS/PS are not available to the employer. Our problems are many, long lived and will remain that way long into the future.

  8. @ Samn

    One, it’s a principal agent problem. The public interest is poorly defined and lamrentably represented. A stakeholders Fleadh.
    Two, management is banjaxed. We had years of mindless expansion. Now we have the mindless contraction, so it’s a case of sauve qui peut.

    As the Dork likes to say, we are heading back into the past, except we have forgotten how to survive in it.

  9. Have no fear, the services of many retiree may not be lost. I bet you a good number get re hired on short term contracts. We get to pay their pensions and their agency rates. The system is deeply dysfunctional & no govt appears able/willing to change it.

  10. The fact that in education people are being encouraged to leave in February and that they couldn’t manage to set June as the date for this sector says a lot about how well this has been thought out.

  11. @ Philip II

    If you read my comment you’ll see I said ‘Administration/managerial roles in …’. But, I’m intrigued. What would a front-line role look like in Suicide Prevention?

  12. @Tull

    “Have no fear, the services of many retiree may not be lost. I bet you a good number get re hired on short term contracts. We get to pay their pensions and their agency rates. The system is deeply dysfunctional & no govt appears able/willing to change it.”

    And I bet you good Sir that the one’s that are re-hired on contract are the very one who should be made redundant as per Sam’s suggestion.

    Great little country…eh?

  13. @Noel
    Rehiring staff that got inducements to retire is political dynamite. The first question to be answered was why did you lay off an essential employee and the second is why are you now paying 1.5 to 1.8 times what you paid before the lay off. There is usually a clause in the severance package that prohibits the ex employee from receiving a pension and a salary from the government simultaneously. That leaves a loophole as you stated above in that the gov’t can go through an agency, the ex CS becomes an employee of the agency and the agency has a contract to provide a service. This is a popular tactic when there is political pressure to cut the CS numbers. The contracts can go on for years. The pay is usually less than the CS/PS pay and there are no benefits other than the mandatory levies that every employee is subjected to. The cost to the employer is typically 15% more than hiring direct because of the agency overhead. Since the gov’t is strapped for cash it would be political dynamite in the present straitened circumstances to contract out at higher cost. I am relating here the pros and cons as I experienced them up close. In every case I was involved in voluntary inducements to leave along with reassignment internally removed the necessity to actually force people out the door. I know that Ireland is a special case and the CS/PS is hemmed in by a multitude of rules, regulations and policies that make it impossible to efficiently cut back to pre tiger proportions.

  14. @Mickey Hickey

    Rehiring staff that got inducements to retire is political dynamite.

    I seem to recall hearing that teachers who had leaving cert classes are to get their money but will be rehired until June? Or the date will be extended to June.

    In the last major incentivised redundancy program for teachers, I recall one principal who ‘retired’ from her lucrative position and within weeks was an inspector for the teacher training.

    @ALL

    I simply do not understand how it can make sense to retire relatively able bodied people at significant cost in areas of the PS where there are already staff shortages.
    It would have made far better sense to reduce pay and retain most of the people, except those that wished to leave voluntarily (without any incentive). It would have been a better outcome for everybody including those whose pay would be reduced as their jobs would at least be managable ‘going forward’.

  15. @Karl

    Indeed. Well caught. It takes cretin-like sagacity to engineer a redundancy program that takes the most needed critical staff out of an enterprise.

    Nevertheless, doughty Minister Howlin will be out defending the reforms Croke Park is delivering. Just don’t get ill. Next chapter of Alice Through The Looking Glass coming soon.

    IS there a scheme for assisting the sick to emigrate, or would Minister Noonan classify that as tourism and experience gathering?

  16. The current issue is a symptom of a dysfunctional system. People may rail against staff embargos and frontline staff joining an exit inducement scheme, however the key issue here is ignored – – the guarantee of lifelong permanent employment.

    The permanent civil service developed in the UK in the aftermath of administrative failures during the Crimean War of the 1850s and at federal level in the US from the early 1880s after a deluded office seeker assassinated the president.

    Since that period, in the developed world arbitrary dismissal is no longer a tool for employers and in the UK and Ireland workers, whether members of trade unions or not, have statutory rights and mechanisms to seek redress – – in practical terms, much more just, than for example using the costly court process.

    This is as it should be and Irish workers’ rights were significantly improved in the first decade of membership of the then European Economic Community.

    The issue of the lifelong public sector employment guarantee is a taboo one in Ireland: why would we emulate basket-case economies such as Sweden and Switzerland where with limited exceptions, public staff are subject to the same laws and protections as the rest of the workforce?

    Sweden began the process after its economic problems in the early 1990s.

    Four decades after the campaign for equal pay for equal work, Ireland has opted for forty-years phased reform of public sector pensions; the retention of the lifelong guarantee but the development of a dual workforce where new hires will be subject to worse pay and conditions than existing staff doing the same work.

    Merging Irish quangos or closing them down is clearly a long…long… process with inducements offered to staff in the hope that they would leave; some inevitably hang around in redeployed positions feeling disgruntled and likely demotivate colleagues who are interested in doing an honest day’s work.

    In a system of limited transparency, the Croke Park ‘process’ trundles on for another year with line by line discussions on work practices as tens of thousands face permanent unemployment. Reform Irish style.

    Howlin has admitted that an extra 3,000 will need to be hired to keep frontline services and teaching positions covered. 

    The system is a pig in poke and claims on significant pay savings are made without considering the ongoing pension costs.

    Still, how bad has the economic situation to get, for an appetite for significant reform to develop?

    In 2006, the then government set a target of 2013 when Ireland would be recognised as a ‘world class knowledge economy.’

    In Nineteen Eighty-Four, George Orwell’s celebrated novel, the character Syme is working on the definitive eleventh edition of a dictionary of Newspeak, a language of words that would not become obsolete before 2050. “‘Don’t you see that the whole aim of Newspeak is to narrow the range of thought? In the end we shall make thought crime literally impossible, because there will be no words in which to express it,” Syme says to Winston Smith.

    What George Orwell described as “euphemism, question-begging and sheer cloudy vagueness” can be found in the common use of the term ‘world-class’ in Ireland, which was vividly illustrated by an Irish Times report on 10 Oct, 2010 titled: “Fás board to agree plan for new ‘world-class’ skills body”.

    The aspiration of just competence and prudence in public spending may have required the need for some practical specifics rather than the realm of fairytales – –  an art we excel at.

    Blame the Government of course.. but why stop there?

  17. @joseph ryan,

    The Croke Park Agreement is just so wrong on so many levels;

    A) Employment & Demand
    In order to save money the agreement seeks to reduce NUMBERS of employees in the public service. This strategy reduces the number of people in employment.
    Graduates who may have got work in the public sector are now having to emigrate. Many have defended high wages in the public sector because high puplic sector wages maintain demand in the economy. This is true to a point but is it the most efficient way to stimulate the economy? If for example teachers were paid on average 10% less the average salary would fall from circa 65K to circa 59K. The savings from this could then employ more than 10%-15% more teachers and still leave a significant saving for the exchequer due to the fact that starting salaries (circa 30K) for teachers are less than half the average salary. If the education system employed 10-15% more teachers instead of reducing numbers this would have a significant impact on demand. The demand from the high earning teachers would be reduced but the extra numbers employed would more than make up for this. Also teachers on higher pay are likely to have consumer habits less likely to increase demand in the domestic economy such as foreign holidays, newer cars, extra pension contributions etc. while more lower paid teachers will spend more of there money in the domestic economy.
    Apologies to teachers for picking on them. I am just using them as an example as this same argument applies across the public sector. Reducing numbers instead of pay has a much more deterimental impact on demand, and obviously employment levels.

    B) Services
    Reducing numbers instead of pay will have much great negative impact on service provision. It is often said that there is way too many administrative staff in the public sector but what evidence is there for this. If this is the case why has my medical card taken 7 months to process. My circumstances haven’t changed so it shouldn’t take long, yet they are so understaffed that there is a massive back log.
    The impacts of reduced numbers of nurses, gardai, teachers, hospital consultants on services are obvious but it is likely that reduced numbers in other areas of the public sector may also have a major impact.

    C) Fairness & Equity
    Overall public sector spending on salaries & pensions doubled between 2000 and 2008. Despite the reductions in pay and the pension levy, increments have largely made up for the declines and the average public sector salary is still a massive 50k. Average public sector pay in the UK is 30k euro (40% less). These high salaries were given to public sector workers during a massive credit, housing, and consumption bubble. This bubble has since burst, thousands of people have lost their jobs, tax revenues reduced and this has left a massive governement deficit. In order to reduce this deficit the government is forced to reduce spending and increase taxes. How is it fair that taxes and charges increased and services reduced on low paid workers while a privileged group get complete imunity from the hard times.
    One reduction in pay that was allowed under Croke park was the reduction in pay for new entrants. How is this fair? Unions always quote starting salaries when discussing salaries in the public sector because (particularly in areas such as teaching) starting salaries are very small relative to average salaries.
    Not only does the reductions in numbers stategy result in newly graduated teachers, nurses etc having to emigrate, seek alternative employment etc, if they are lucky enough to find work in the PS they will be paid less than there colleagues based only on the year they joined. What is the moral justification for this? What happened to equal pay for equal work?

    I heard Jack O’Connor on the radio the other day talking about the Croke Park deal. He was singing it’s praises and claimed it would enable us ”to do things with the smallest public service in any developed country in Europe”.
    Why is it the objective of the trade union movement to have an extremely small public sector. It seems to be the policy of the union movement to do anything to justify extremely high pay.
    I don’t think the public want the public sector to be the ‘smallest in any developed country in Europe’. We want an efficient public service that is affordable.

    D) IMF/EU Deal and debt forgiveness
    Steven Donnelly was on the saturday night show discussing how we are precieved by the the outside world, in particular officials, politicians from the ‘troika’. He said he heard of officials from a french delegation saying they met their Irish counterparts who were paid more than double there salaries. It might seem petty on their behalf but there is something absurd about european countries lending us money below market rates to pay public sector salaries far higher than they pay their own public sector employees.
    It all goes to reinforce the idea in the minds of our creditors that we are profligate. If we are stilling enjoying such a high standard of living why should they countenance debt forgiveness.
    If European officials see we are cutting the likes of SNA’s and services to the disabled because we have no other choice then they may consider we can’t pay instead of wont pay. At the moment they see we are cutting SNA’s and service to the disabled out of choice and maintaining the salaries of their counterparts.

  18. It didn’t take long for this to develops into PS bashing did it? Oh, and people, PS NE CS…
    Now, let’s see if th moderators can make a rule: when you comment saying “reform crime park” or “trim the ps” etf, you can only do so with hard verifiable numbers. For example: do teachers really get 65k on average? Maybe but I’d like a lnlink or a reference.
    As for the notiOn that those who are retiring (older more experienced people ) are those that should be made redundant and are the ones who will be rehired as agents…in health and educatiOn its a people skills job as much as any else.

  19. The “new entrants” thing might be there because there is no legal way to cut pay for those people already with contracts. Can the govt use an inability to pay argument to implement changes in pay for people who already have contracts?

  20. Last point. People want counter cyclical govt spending…on what? Lollipops? Guns? Or….public services? Slashing public spending especially in this cackhanded way is gong to help us grow how exactly? Just wondering..

  21. Am I right in thinking that our government is essentially promoting a policy for the masses to keep working past the age of 65 and be forced to make any real retirement provision via defined contribution schemes but that a select few may be able to retire early with a jolly nice sack of public money.

    Does anyone have any figures over the past five years covering what is paid out in public pensions annually and what the predictions look like for the next five years (and how that looks as a % of GNP)? If it’s not a daft question, why can’t employees in the public sector just do the same as everyone else and buy their own pension? A level playing field and all that.

  22. Hilarious OP, I guess Karl is expecting an “oh my goodness, not the nurses!” reaction. Ireland has more nurses per 100,000 population than pretty much anywhere else in the OECD and as another poster has pointed out a large chunk of them do not deign to do any nursing any more. If they are the kind of people who’ll jump ship to protect a grossly inflated pension paid for by the impoverished public they are supposed to be ‘caring’ for, are they really the best people to have in the nursing profession?

    As for the consultants… maybe some of them got an offer from Bain Capital.

  23. @ PR Guy

    For the private sector median earner, the OECD says the Irish worker has the worst deal among developed countries. Net pension relative to net average earnings is 36% in Ireland, 39% in the UK, 41% in New Zealand, 56% in Australia and 77% in Austria.

    Real returns on Irish managed funds have been negative over the past decade and returns are likely to remain low for many years.

    Despite the public pensions levy that was introduced in 2009, the earnings link makes the actuarial costs of Irish public pensions for higher earners very costly.

    The Comptroller & Auditor General (C&AG) estimated that an additional year’s pension, net of employee contributions, for a High Court judge or minister costs 62% of salary.

    At 31 December 2008, the C&AG estimated public pension liabilities at €108bn; the accrual rose to €116bn at the end of 2009. There was no update for 2010 from this total in the 2010 report published last Sept.

    Pensions now account for 13.9% of the total Pay and Pension Pay bill according to the PER Dept, up from 8.8% in 2006. Overall, the pensions bill has increased from €1.43bn in 2006 to €2.39bn in 2011 representing a 66.8% increase over the period (pay in contrast decreased by 0.3%) . The pensions bill has increased by 44% since 2008. This is attributable in part to an increase in retirements from 2009.

    The cash payout cost will soon rise to €3bn.

    There are currently 2.5 public service staff for every pensioner.

    So, if the expected costs of pensions were provided for in the public accounts, the change in the C&AG’s accrual in 2009 would have been added to the cash payout resulting in a charge of €10.5bn – – it would at least highlight the cost.

    The earnings link rather than a link to the consumer price index is an important factor in the costs.

    Isn’t it bizarre that say a pensioner who retired 30 years ago would get the same increases as the current incumbent in his last position?

    The Irish version of the US Republicans’ howls of ‘class warfare’ is ‘public sector bashing.’

    Of course facts rarely change views.

  24. Pr guy
    Ps workers, afaik,cgt a pension which is rebated by the amount of the non contributory oap. And of course the people who don’t, many shock horror, in the private sector, who don’t pay for their pension via prsi get an non contributory oap. And those in thr private sector who do pay into the prsi system for a contributory oap don’t pay near enough. Those who did have private pensions have seen the value wiped out, and will be relying on (if low prsi directors) non contrib oap.
    Plenty pension mess to go round, public or private ain’t in it.

  25. I’m pleased that Karl seems to be a fan of Gladys Knight and the Pips. We must all bow before Aretha, but, imo, Gladys is seriously under-rated.

    But seriously, folks, many people here seem to be hung up on this ‘labour theory of costs’ – which may be contrasted neatly with the lingering, but equally deluded, Marxian ‘labour theory of value’. Labour isn’t the only factor of production.

    It’s perfectly rational for people to seek to defend pay levels and maximise future pension entitlements when confronted with the impact on their cost of living of rent-seeking, monopoly profit-gouging and woeful inefficiencies perpetrated by those responsible for non-labour inputs in the production and delivery of goods and services.

    I have been invited and encouraged by various people to spell out precisely the nature of these additional, excessive and unnecessary costs and inefficiencies – and what remedies and reforms are required. But I can only speak of those areas where I have performed some detailed analysis, primarily in the electricity and gas sectors – but with some more general assessments of other infrastructure and utility sectors, and I have spelled out this analysis continuously – to the annoyance of many. Quite simply the vast majority of people just don’t want to know; and those who do either fear or are vehemently opposed to what a remedy would involve.

    There are I don’t know how many hundreds of economists in this country – many working in these sectors or with an intimate knowledge of these sectors that require major structural reform. Why should it fall to me, with limited time, resource – and the necessary detailed knowledge of many of these sectors – to spell out what should be as plain as pike-staff?

    But, simply by posing the question the answer becomes obvious. It is far too safe, comfortable and rewarding to continue to ‘live a lie’.

  26. What kind of pay cut formula will eventually come to fruition I wonder? The momentum behind a big cut especially for those at the top is now unstoppable. Here’s my own formula:

    0-20k, no change
    20-40k, 10% cut
    40-60k, 20% cut
    60-80k, 30% cut
    80-100k, 40% cut
    Anything over 100k, 50% cut.

    A Professor at the top of their scale on 145k would come down to 102k which is about right. The profits at Donnybrook Fair might go down a tad but we all have to make sacrifices.

    The difference between new entrants and existing staff will be scrapped and in some areas we may see an increase in staffing levels – e.g. you’d hope that some hiring would be done in the primary school area.

  27. Johnny F
    A) net of tax how much will that save.
    B) assuming not all ps workers shop in donnybrook fair, but in, oh I dunno, lidl and supervalu and the local pub etc, what will the second round VAT etc losses be from the gross cuts above
    C) Given that there won’t be new hires, what effect do you consider this will have on service delivery
    D) how many people of voting age would this affect, and how likely would rhey be to vote for the party that did it

    Answers on an electron please. I think it behooves this.blog to not devolve into p.ie levels of commentary.

  28. @Philip II

    My formula is based on my own opinion of how much the PS can bear, not how much it will reap. If I thought the PS could bear any more I’d propose larger cuts. It won’t close the gap completely of course – we need to cut social welfare rates, cut PS pensions, cut everything basically. We’re not going to grow our way out of this so we’ll have to cut. It’s not a matter of opinion any more, the only question is when it happens.

    Re the idea that the best way to stimulate the economy is to overpay PS workers – why PS workers? We can pump money into the economy in all sorts of ways – why do the PS workers get to be lucky shoppers?

  29. The story in the Sindo today of high level Gardai bailing out must be a cause for concern. Apparently the service is short four assistant commissioners and about twenty at superintendent and chief superintendent level. Who’s directing the troops?

  30. On the jobs for life issue. The government as employer has to take the position that as long as you do your job you will have a job. If your position becomes redundant we will reassign you and retrain you if necessary. At all times we retain the right to fire you for nonperformance and to lay you off if there is a shortage of work. Governments are political animals and must be seen to be dealing fairly with their employees. One tactic I have seen used during teacher labour negotiations was to offer them 6% lay offs or forego one days work per month. The teachers opted for the lay offs which left the teachers union in a difficult position and the government in a position to say we made them a reasonable offer and they rejected it. Teachers have a strong sense of entitlement, public perception was that they were not too bright.

    As to the losing valuable skills argument you tell the union negotiator that the skills are being redeployed to the private sector and it may be a loss to the government but it is not a loss to the country. Shades of Schumpeter. Competent unions usually have an economist on staff to counter the positions put forth by the government’s economists. Sometimes they are at the table but always they are advising the people at the table.
    It all hinges on having capable politicians who are capable of doing what is good for the country as a whole. In Ireland the politicians are making too much and hang on like grim death, fearful that they will offend any small group and thereby lose those votes in future elections. If the politicians were paid much less they might actually act in the interest of the population as a whole.

    There is a body of work in economics that deals with the perils of overpaying workers, a lot of it deals with distortions in developing countries caused by FDI.

  31. JF
    Again though based on what facts? Im not disagreeing that everything, including the state pay bill will decline. Im just asking you to show us how you think that for example a worker on 50k will ‘bear’ a further loss over and above the general mill of by your calculation 10k. Second, surely the issue is exactly opposite what you suggest: the whole point, i would imagine, is to see where the state can save, not by how much one sector or another can be hit? Third, your pretty much wildly overstating the issue of the PS as being a countercyclical buffer. Its one vital part of state expenditure which acts as same, but maybe you disagree with that. Oh, and C) an D), the organizational and real politics of this…? Comments?
    So, again, share your ‘formula’, and its assumptions or I will have to suggest that your simply pulling numbers from the air….

  32. @Philip II

    You might be misunderstanding the formula – my fault for not making it clear. When the last round of pay cuts was made it was done like a progressive tax. So when you see a 20% cut for someone on 40-60k that means the proportion of one’s income in that band will be cut by 20%. Someone on 50k will get a pay cut of 4k: they’ll lose nothing from the first 20k, 2k from the next 20k and 2k from the final 10k. I think that is the limit of what is bearable. You ask for evidence – what kind of evidence could provide an answer? A survey of PS workers? It’s an opinion, I haven’t pretended otherwise. I’m guessing based on my own experiences as a PS worker. That’s pretty much the standard of evidence that was used the last time round by Brian Lenihan.

    Re new hires I think there should be a small amount of hiring at entry level in select areas – primary school teachers is one example I gave.

    Re the electoral issue I’m happy to bet that Fine Gael’s poll ratings will increase at least 5% after they make the PS pay cuts. Labour are screwed no matter what happens.

  33. A bit off topic ..but important, I think.
    Just heard Gerry Adams confirm that he will be mounting a constitutional challenge to the new Treaty/Compact or whatever you want to call it.
    Currently on air at RTE.

    That should clarify matters…. Or will it?

  34. Dr. philII,

    Your mention as to the deleterious effects of PS pension readjustment (in terms of suicide prevention and diminished countercyclical Keynesian potency) have induced symptoms of vomitous nausea. Any advice?

    As a redundant private sector worker I’d hoped to cadge a free enema sample or two but I now realise your need is far more pressing than my own!

    @ OP

    Maybe X Factor (Karley and the PS Wailers) with a reggae anthem for our straitened times: ‘Don’t Cry for Me Argentina’?

  35. I don’t think anyone’s addressed the point of Karl’s post.

    Can the government manage the exodus, or, if people apply, must they be granted the early retirement?

  36. Sarah,
    Not sure what the point of K post was other than to slag off the govt. In answer to your question, since many of these ‘front line staff’ will be replaced by labour from outside public service it is not obvious what the implications on service delivery or savings will be. I venture zero under each heading.
    I also venture that the bulk of the replacement labour will be from ex PS staff.
    Btw how many of the 1000 nurses are actually front line. How many are nurse managers etc.

  37. @ Philip II
    ”It didn’t take long for this to develops into PS bashing did it?”
    I wasn’t public sector bashing, I think we should have more public servants not the Croke Park strategy which is to have ”smallest public service”.
    ”so with hard verifiable numbers. For example: do teachers really get 65k on average? Maybe but I’d like a lnlink or a reference.”

    My figure was based on an OECD figure from 2008 and obvously they’ve had to make a small contribution to their pensions, had a pay cut, and the an number of pay rises (called increments in PS).
    I’m sorry if I don’t have an accurate figure for you. The public service are not very good at releasing accurate figures such as this. Whenever there is a debate the only figures they seem sure about is starting salaries which I here often.
    Does anyone have accurate figures on the average salary of a full time, department paid, secondary school teacher?

    It would be indeed good to have accurate numbers with which to have an informed debate but those with access to the numbers seem reluctant to collate and publish them for some reason.

    @Sarah Carey
    It’s such an absurd problem that some of us are trying to get our heads around why this strategy is being pursued at all. I’ve no idea.

  38. jF
    Thanks for the useful clarification. Now, how much will that save , net of tax , and how do you square it with the (some anyhow) evidence that the public/private wedge is actually higher at lower levels?

  39. @Tim

    My understanding, subject to correction, is that the PS pension bill is overwhelming and the government made some changes that would reduce it in the future. However they had to name X date from which these changes would be made. ie they couldn’t impose them unilaterally without giving notice. This provided a window in which staff could retire under the old rules and the “Exodus” has been quietly going on for some time now. (Weren’t Revenue managers the first to start bailing out?”)

    In the long term it means the bill will be reduced but in the meantime
    – we will be paying pensions to otherwise productive people, but getting zero productivity from them
    – some or their equivalent replacements will have to be hired back to do essential work
    – so they savings in the short to medium term will be minimal

    but

    should achieve something in the long term?

    and

    can’t be managed any other way?

    Unfortunately the only people who seem to know are union leaders and PS/CS managers, and they are hardly disinterested parties….

  40. @Philip II

    If the average pay cut is around 8% it would carve around 5% off the pay bill. Probably would save a billion if applied to pensions as well. Not enormous but unlike the bank bailouts it’s a recurring saving.

    Imagine trying to close the gap between spending and taxes without making these cuts – what else is left to cut?

  41. @Sarah Carey

    Deeply flawed process. Imagine your local butcher being asked to trim a lamb, say, and rather than carefully and prudently removing fat and gristly, he proceeded to hack off chunks without considering with their value or the net usability of the lamb afterwards.

    The government is stewing in highly paid intelligent advisors, so how such policies can escape scrutiny is a mystery to me.

  42. @Philip II

    The public/private comparison isn’t relevant any more, all that matters is how to cut spending and increase revenues. All sorts of schemes have been tried to raise revenues with little success so now we have to cut. My formula is based on cutting where the most fat exists. So a Professor loses 43k and the average PS worker loses 5k.

    Regarding the idea that talent will flee the country I’m not so sure. The people on the biggest salaries are also those who tend to be at a point in their careers when emigration becomes very difficult and unpleasant to imagine. Maybe we’ll lose some of the younger and more talented people who are mobile like Richard Toll, but it’s a matter of degree – we’ll survive and many will return in the future.

    There are going to be a small number of areas where skill shortages absolutely have to be addressed and one would hope that the Government is on top of this. A good example would be orthopaedic surgeons. We need them, they provide an effective treatment (unlike so many areas in medicine), they don’t all have to be consultants and we can hire non-consultant posts at an affordable rate. I believe the DoHC is trying to get something done in this area.

  43. @Sarah Carey
    When you say ”ie they couldn’t impose them unilaterally without giving notice.” do you mean to say they didn’t want to.
    The government was able to impose a tax on private pension funds last year. These pension schemes have been funded. why can they move the goal posts with regard these schemes but cannot with unfunded public sectors schemes without giving notice and enabling some to avoid it?

    To me, It is clear from the union leaders that the strategy is indeed to reduce numbers in the public service in order to maintain pay levels at all costs. The scheme and ‘notice period’ you outline above is designed to encourage public servants to retire with no consideration for the impact on services.

  44. There’s no point in having this debate without considering:
    1: Is it legally possible to cut pay for workers who have contracts without having to renegotiate the whole contract and
    2: Is it a breach of contract (or whatever) to cut pensions for those who made contributions to those pensions in good faith.
    These are very important issues

  45. @Eureka

    Both have recent precedents – pay cuts end of 2009 and pension cuts in last budget.

    I wonder if the Department of Finance have a balanced budget in a vault somewhere? We never hear about what it would like in detail, only vague threats. Presumably the grant to RTE would be cut by 90% or so – maybe that’s why we never hear about it?

  46. tim
    According to the budget.gov.ie site, http://budget.gov.ie/Budgets/2012/Documents/CER%20-%20Estimates%20Final%20Part%204.pdf page 26 there is a 2011 spend of 1,180,m on second level teachers salaries this year, and 2,052 on primary. There are according to the Dept of Education statistics 32489 primary teachers and 26185 second level. So its 1180000/26185 or 45k average for second level and 2052000/32489 or 63k for primary teachers on average. Total average is 3232000/58674 or 55k. Not bad but not 65k. And they mind your most precious resource all day, and educate them.

  47. @Eureka
    In any other country but Ireland the CS/PS knows that they are working for the only employer in the country that can change the laws, rules, regulations and policies on very short notice. Governments must have the ability to respond quickly to changing circumstances and they do. Nothing in human affairs is cast in stone and certainly the social contract is eminently flexible.

    With regard to the pension contract it is customary for governments to honour the contract. Except, in cases of force majeure, societal breakdown, economic breakdown, famines, hunger, widespread homelessness, widespread violence, poverty and so on. The government is compelled to put its resources where the need is greatest.

    With respect to labour contracts, the government can enact legislation that allows it to set conditions that allow it to lay off employees without difficulty. Then the government has leverage in negotiations, spending cuts will take place, you can take a lower wage or a higher number of layoffs.

    We are so wrapped up in legalities and what we cannot do that we are paralysed and not just the government but also a majority of the sentient population. The next time a TD tells you what he/she cannot do you can tell them what you can do with your vote.

    The shutting down of Quangos should not be difficult. In normal countries they were set up to serve a purpose that would be time limited. Always they are semi autonomous with clauses in the enabling legislation that absolves the government of any responsibility for their actions particularly legal liability involving any payout by the government. Cutting off funding on 90 days notice should be sufficient in all cases.

    All my life (since age 14) I knew that Irish governments were incompetent but I had no idea how bad things really were.

  48. @ Johny Foreigner
    I know it has precedents but does that make it legal? (I dont know)

    @ Mickey Hickey
    So from what you say this might be how it would work.
    Govt: Your contracts will cease to operate in 3 months time. At that stage you can a) leave your job or b) sign the new contract
    Union: Ok we’ll take option a) thanks
    And effectively you have a public sector strike and a govt in crisis.

    I don’t think that this is going to be easy

  49. @philip II
    Those figures are interesting, thank you.

    On the face of it primary salaries seem much higher than secondary level. What I think is going on here is that the total wage cost figure 1,180,000,000/26185 includes a lot of part time teachers in secordary teaching but much less (almost none) part time teachers in primary teaching.
    Your average figure of 45k for a secondary school teacher includes part time teachers some of whom work as little as 6hours per week (my mother was part time teacher).
    The primary teaching number of 63k probably fairly accurately reflects the average full time teacher primary teacher as there are much view part time teachers in primary schools.
    All other surveys on teachers pay I have seen (not up-to-date) consistently show average full time teacher pay to be higher for secondary level teachers than primary teachers. so if part time teachers were stripped out, I think my figure of approx. €65,000 per year is closer to the mark for a full time teachers.

  50. @Tim

    Your initial post (the one suggesting 10% pay cuts), ignores the fact that public service workers pay tax – more tax, in fact, than non-public service workers. The reality is that if you cut the headine pay of public service workers by 10%, you would not be able to hire anything like 10% more staff.

  51. Can the Government bear the retirements? I would argue ‘Yes’. Those retiring are those who have been in the system at least 30 years. In most cases (and I have personal experience of this from my own kids in primary school) the young teachers are more eager and enthusiastic than the older ones (I’ll be accused of ageism here but c’est la vie). Those who entered teaching or nursing in the years up to 2006 (a full-employment economy) are those who REALLY wanted to be teachers or nurses. Unlike my Leaving Cert class of the early 1980’s where teaching was a safe option and chosen by those who, in later years, would certainly have chosen a myriad of different career opportunities. I bet there isn’t a person in Ireland over 30 years old who cannot think of a teacher they had at either primary or secondary level who they thought to themselves “that person should never have been a teacher”. Perhaps retiring the older staff will clear the way for younger, more motivated staff? I know that those admin/managerial staff who retired from the HSE in recent years were those who entered at 18 years with, at most, a Leaving Certificate. Many later got degrees but only with generous funding, travel, and time off for study and they took degrees in business or other with absolutely no relevance to how things are done on a day-to-day basis in the PS. The Boston Matrix anyone with Cash Cows/Dogs/Stars etc. – the standard of every marketing course on a Business Studies degree? Many of the younger cohort are educated to degree level entering the system. My direct experience of the PS leads me to believe that the sooner we retire the older staff the better (personal abuse can follow later).

  52. Thanks Naneu
    The pupil teacher ratio is way out of whack.

    There are countries higher in the PISA rankings where the parents are lobbying to bring the P/T ratio down to 25 -1.

    16 to 1 Primary and 13 to 1 Secondary is extremely low. I know some of you will say that includes non working Principals and the governing bureaucracy but there is still no valid reason for ratios that low. If there was concrete evidence that there is a ROI there would be some justification. Unfortunately there little to no benefits from P/T ratios below 25-1.

    A hiring freeze should be in place immediately along with widespread closures of small schools. Travelling through Newfoundland I was amazed at the size of the schools. The locals told me in their close to Irish accents “Sure we have buses now boy, no more small schools.”.

    It will cost votes so FG/Lab are paralysed, leave it to the next crowd who will also be paralysed. Only a total economic breakdown with the creditors taking over will out Ireland back on track.

  53. @ Johnny Foreigner

    “All sorts of schemes have been tried to raise revenues with little success so now we have to cut.”

    Not true. The income tax rates have been left completely untouched at their historic low rates, a curious omission.

  54. @EWI

    The % of gross income that is requisitioned by the State has increased substantially in the last 3 years with the biggest increases for high earners. You can do it with levies, charges, thresholds, bands, credits or whatever else you fancy, the reality is these adjustments are increases in income tax. I agree that increasing the headline rates would be a more honest approach but the effect is the same.

  55. Tim
    “Does anyone have accurate figures on the average salary of a full time, department paid, secondary school teacher?”
    Hmm.

  56. Mickey
    Those are established figures. Here’s the latest OECD data..http://statlinks.oecdcode.org/962010071P1G022.XLS
    See table 2.2
    Now…leaving thr Pisa data aside, do you think we should go back to the sod of turf on yer feet walking three miles to school cutting the switch to be bate with , or not? And, feel free to adjust this dat and then do a rank correlate with Pisa scores……
    Also, Ireland is in post primary 12.3, vs an OECD average of 13.7 and an eu19 average of 12 ..your task is to determine if giving he observed data , at what degree of significance, and apologise if your a Bayesian, 12.0, 13.7 and 12.3 are statistically not different from each other. Resampling, bootstrapping or use of the jackknife are allowed.

  57. @Sarah Carey

    “Can the government manage the exodus”

    I think by its very nature, an exodus (whether in private or public sectors) can’t be ‘managed’ as such. At best, you do everything you can to limit the damage it will cause ….. assuming you have the will to do that.

    I can only speak for the private sector – where there’s usually a will to limit the damage and survive intact – and it’s bad enough when you get a few key people leaving around the same time, let alone a whole team departing.

    I dread to think the vacuum that could be caused by several hundred people (e.g. teachers, nurses, etc.) leaving en masse, no matter how large the organisation. It usually puts a lot of strain on those they are leaving behind and its often difficult to find good replacements in the short’ish term.

    I’m not sure what the strategy is for replacements in these public sector jobs as I haven’t really kept up with this story but I would imagine they are doing it to keep numbers down (government) and wages up (unions)!

    I do know there are plenty of ready replacements out there in teaching (if there are now some openings when these people retire early) given the large numbers graduating from e.g. St. Pat’s and Hibernian over the past couple of years who are still without a job or surviving on 1-2 days substitute teaching per week (that is, when they can get past the retired teachers elbowing them out of the way for sub teaching days – though I thought I heard that practice is coming to an end?).

  58. My better half is working in the health service front line.I know of two consultants who are taking early retirement in Feb(500k package I believe)Can anybody verify!!! and already have contracts to be re-employed on contract/locum basis for 12 month period.

    Crazy stuff

  59. Bunbury knows what he is talking about. As someone about to retire from the HSE after 32 years I think he is spot on in most of his comments.

    Far too many so called managerial grades and not just in nursing; also a lot of made up jobs with trendy titles but little real patient impact. This has happened in all areas of the HSE. There are also a lot of older staff who have burnt out What is required is a new stucture with one management grade above clinical staff, as it used to be when I started, and with a new intake of young well trained enthusiastic staff.

    Lastly while PS pensions for those who retire before the end of February are based on their 2009 salary scale they will be subject to pension reductions as per FEMPI Act 2010. Those who retire after February will not be subject to these pension reductions but their pension will be based on the current “cut” salary rate.

  60. @ Johnny Foreigner

    I think a 5% poll increase would only be achieved if your PS salary cuts were part of a package to include things such as 20-50% cuts in professional services fees paid by gov’t departments to the private sector. I dont know how much this would save but from a fairness perspective then surely all sheltered parts of the economy should contribute to balancing the budget

  61. @JohnFrancis
    500k seems an exaggeration. A person in the HSE who retires after 40 years service is entitled to a maximum pension of half their salary and a lump sum of 1.5 times their salary. Assuming a consultant earns 250k per annum from the HSE their maximum lump sum would be 375k. Most people who retire from the HSE don’t have 40 years service. Also lump sums in excess of 200k are subject to tax (don’t know details).

  62. @Tullmcadoo

    As I understand it, the USC doesn’t apply to income from dividends, interest, and so on, so it’s progressive for those earning €100,000 or less, but simply doesn’t apply to the hyper-rich.

  63. @Noneu
    Thanks for the link.

    The OECD figures are reports from individual countries with vastly different ways of teaching. In Europe I am familiar with the German system where half to three quarters of teachers are part time. The reported figure will be correct (Germans do not lie.) but it overstates the number of teachers by 100% at least. Another wrinkle is the use of internships and what are known as Lehrerhelferin (teaching assistants).

    Here is a link that will give some insight into German teachers and what the the perception of the German public is.

  64. @Mickey Hickey
    “The pupil teacher ratio is way out of whack.”

    One of the main reasons our secondary pupil teacher ratios are low is that we’ve a compressed school year. It’s a very deceptive ratio, because in reality the average number of students crammed into a class room is much higher than the ratio would suggest.

    We’ve more hours for students per week, and fewer weeks per year than most of the countries we’d be comparing ourselves to. This is a highly unproductive way to use skilled, well paid teachers. Hard to explain in a couple sentences why it’s such a poor use of talent. Essentially however you need to hire extra cover for staff who can’t due to timetable restrictions cover all the classes in a week that that our school year demands.

    Lengthen the school years, shorten the school week and you’d have a significantly more productive secondary system. Less teachers can then teach the same number of hours of classes per year.

    Put another way we’ve a low student teacher ratio, however we also have significantly more teachers than classrooms they can teach simultaneously in. Or another way the greater the difference in the number of hours a teacher per week can be expected to teach and the number of hours per week a student is expected to be taught; the fuller the school staff room.

  65. @Sarah Carey
    The answer to the question “Can the Gov’t manage the exodus.” is yes.

    The Gov’t can put out an offer with inducements to retire early which would benefit only people over 55 with 25 or more years service. The wording of the offer would make it plain that the Gov’t can refuse to accept an offer from any employee deemed essential to providing services.

    Similarly an offer can be broadcast to all employees offering one, two or three weeks per year severance. Again the wording of the offer would leave the employer free to choose who to keep and who to let go.

    Before offers one and two an announcement would be made that XXX number of employees will be let go, outlining the terms and conditions which would be less generous than the ones above. In properly run Civil Services appointment are on merit and lay offs are on reverse merit.

    I know Ireland is a special case but it boggles my mind that a Gov’t as employer cannot choose who it hires and who it lets go. As for unions, not too many can withstand a strike of more than 3 months particularly if the gov’t shows a willingness to lock out if necessary. Ireland has its underwear tied up in legalistic knots to the point where Gov’ts cannot govern.

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