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October 23, 2008



And perhaps some countries understand 'public sector reform' as code for outsourcing and privatisation of services, which frequently cost more while delivering less - seeking as they do to profit on delivery. "Reduce public sector numbers and give me a slice of the pie" is what I am really hearing from the O' Reilly's of this world when they make their rallying cry.


Mmmm....facts, as Homer Simposn would say.

I can see why ISME et al call for the axe to fall on the public sector rather than them when it comes to shoring up the public finances, but its interesting to note that the anti-public sector discourse was already being promoted in the same quarters during the boom. This would be puzzling if tax were the issue, since it's not like tax increases were being threatened to maintain/increase the public sector at that time. In fact, of course, the impact of the public sector on private sector labour market conditions is at least as important for employers as tax issues - this should be borne in mind (especially by private sector employees) when we hear employers' spokespeople decrying the disparities in the pay, pensions etc. of public and private sector workers.

Having said all that, I do think there must be room for wage cuts at the top of the public sector if the average salary is really €49,000.

Michael Taft

Yvonne, yes, reform of the public sector. There is much in that word 'reform'. Or rather, much for some, a lot lot less for most.

Cutting public sector workers is a demand for all seasons when it comes to the right. But you put your finger on a point that is often missed in the debate, James - the extent to which private sector companies are reliant upon public spending (through procurement, etc.). I have no problems with this - in fact, we need more. But I wonder if members of ISME and IBEC really understand the implications for their own businesses from the demand to cut public spending.

Michael Taft

Also, James, as to limiting growth in high wages and redirecting that money to low and average incomes (which would be more beneficial since they would have a greater propensity to spend), I have no problem with that - either in the private or public sector, whether through pay agreements, taxation or both.


To deal with a few of the points mentioned above,

a) Irish Public Services salaries are high when compared with many other EU nations. Benchmarking One used larger mainly foreign owned business for comparison purposes. Average salaries in many of those companies are far higher than the average.

b) Education stardards of a lot of Public Service staff are very high and many bodies spend a lot of money on education and training, around 3% of a Govt. Dept,'s salaries are training costs.

c) The greatest area of discrepancy is at the lower grades. The starting rate for Clerical Officers is €13.37 per hour is very high for in effect a trainee. This scale goes to €22.16 per hour and this is without any promotion. (I won't get into the pension argument)

d) Benchmarking Two, which made comparisons with much smaller businesses and was of the view that clerical grades were overpaid.

e) There is vast room for savings at local authority level, without privatisation. For example, accounting functions of many of the smaller authorities could be handled more effectively if grouped together. The same is probably true for engineering and other specialist services. This currently happens within the Civil Service. The Revenue collects PRSI for the Dept. of SFA and also does much of its printing, and distribution also.

f) Perhaps the greatest degree of overstaffing is at Govt. level. A cabinet of 12 with perhaps 7-10 junior ministers would suffice.

cactus flower

This is a timely reminder. There is a series of OECD reports that make the point that public service spending reduces inequality more effectively than solely financial measures. The other side of this, as someone who worked 10 years in the public sector, public service workers are a privileged group. I don't like the division opening up between public and private sector workers. The only way I can see to reduce it is to provide more equal financial security both during working years and on retirement.


And here the call for 'public sector reform' can be seen to be doing as intended - pitching public sector workers aginst their private sector opposites and deflecting too close an examination of other causes!

I have no doubt there is room for efficiencies as Niall suggests through shared services etc. but no one calling for 'public sector reform' has said where or how those efficiencies are to be achieved and where these efficiencies can be used to enhance services to the public - only that numbers must be reduced.

I am deeply concerned, as I think Cactus Flower suggests, that this deflection does not lead to a dimunition of conditions for the former but to better security for all.

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