Public service

Union leader warns civil service pay talks will fail if ‘living standards deficit’ not resolved

A union leader has warned that talks to overhaul the current pay deal for 340,000 civil servants will fail if a “living standards deficit” is not adequately addressed.

In an email to members of the Irish Trades Union Congress public services committee this afternoon, chief negotiator Kevin Callinan said that although figures were not presented by either side in the talks, the The shortfall in real terms between the “modest” wage increases in the current deal and the cost of living is “substantial and could rise further”.

He calculates that last year the gap between increases due – if annualized – and inflation was 2.15%.

Mr Callinan said that if inflation averaged 7% this year, “and it could be higher”, the gap would be 6.75%.

He says Public Expenditure and Reform Minister Michael McGrath wants a deal done before the October budget, and committee officers have agreed, at the government’s request, to discuss the extension of Building Momentum until 2023.

“We have been equally clear that this cannot replace solving the 2021-2022 living standards deficit,” said Mr. Callinan, chairman of the Public Services Committee (PSC).

“The current talks will fail if this deficit is not adequately addressed.

“We are working in good faith to avoid such an outcome, which would fundamentally destabilize Building Momentum and make an extension of the agreement through 2023 impossible.”

Mr Callinan said the talks which entered a more intense phase this week focus on two things.

The first is to fill the gap between the salary increases provided for in the Building Momentum agreement and the current decline in living standards caused by “particularly high and persistent inflation”.

He says this led the utilities committee to trigger the Building Momentum review clause in March.

The union leader noted that the minister later said the government was willing to go beyond the wage terms of the deal.

The second key concern, he says, is to extend the Building Momentum agreement until 2023. He says the minister has indicated that the government wants certainty on the civil service wage bill at a time of “economic volatility and geopolitics”.

He says the minister said he would prefer to get a deal done before the October budget.

“PSC officers have indicated their willingness to try to achieve this, although we have said that the timetable for negotiations and votes is difficult,” he says.

He says that despite speculation, the talks are not about broader cost-of-living measures or changes to taxes and benefits.

The cost of living measures are being discussed in a separate process involving Ictu, Ibec and the government under the Workers’ and Employers’ Economic Forum.

He says little concrete progress has been made in these talks, but the Ictu intends to put forward proposals to see if it is possible to reach an agreement on an improved “social wage”.

“Ictu’s position is that improving the social wage will require increased spending in the short to medium term in areas such as health, education, childcare, housing and public transport” , did he declare.

“We don’t think deep tax cuts are consistent with that, and Congress isn’t involved in any negotiations on tax cuts.”