55. Deputy Barry Cowen asked the Minister for Public Expenditure and Reform the status of the issue of recruitment and retention under the Public Service Pay Commission; and if he will make a statement on the matter. [43916/18]
Vol. 974 No. 2
55. Deputy Barry Cowen asked the Minister for Public Expenditure and Reform the status of the issue of recruitment and retention under the Public Service Pay Commission; and if he will make a statement on the matter. [43916/18]
Approval has been given to Deputy Troy to take Deputy Cowen's questions in his absence.
I thank the Office of the Ceann Comhairle for facilitating Deputy Cowen's request. I ask the Minister for Public Expenditure and Reform to update the House on the Public Service Pay Commission's consideration of issues of recruitment and retention.
To date, the Public Service Pay Commission has completed two reports that address recruitment and retention issues in the public service. The first report, which was published on 9 May 2017, primarily focused on the unwinding of the financial emergency measures legislation. The Government asked the commission, in making its findings, to take account of evidence on recruitment and retention issues arising in the public service. The commission found that "evidence suggests that there are not significant recruitment difficulties to the various large scale public service vocational streams". It advised that "consideration could be given to commissioning a more comprehensive examination of underlying difficulties in recruitment and retention in those sectors and employment streams where difficulties are evident". Under the terms of the public service stability agreement, PSSA, the commission was commissioned to undertake a more comprehensive examination of the limited recruitment and retention issues in the public service. The commission's work is constrained by its terms of reference and by the PSSA and does not amount to a review of the pay of a particular group or groups of workers. As Deputies will be aware, the commission's second report focused on recruitment and retention in our health services. It concluded that "current pay rates do not appear to be unduly affecting the number of nurses, midwives and doctors applying to work abroad". It considered that "national levels of nursing and midwifery turnover rates do not indicate a generalised retention crisis". It found that "the available evidence suggests that none of the turnover rates reported are significantly out of line with those experienced in private sector employment". The commission made a number of recommendations, which I accept. I want to use this opportunity to thank it and to acknowledge the work it has done to date.
The Minister has spoken about the challenges and difficulties that exist in the health area, for example with regard to staff turnover. Any Deputy who engages with his or her constituents, particularly in a constituency where there is a large cohort of health professionals working in the local hospital, will be aware that there are major problems with hiring and retaining staff. The overwhelming rejection of the deal by 94% of members of the Irish Nurses and Midwives Organisation, INMO, confirms what I am saying about the feeling within the health service. What is the Minister's view? Given that the INMO has overwhelmingly rejected the proposal, how does he intend to advance?
As I indicated in my Budget Statement earlier this month, I will be accepting the Public Service Pay Commission's recommendations on recruitment and retention in the health sector. Of course we are willing to engage with representatives of the health service, while making it very clear that our pay bill and our pay policy are determined through the PSSA. Our public pay figures for next year, and under the remainder of this agreement, are very clearly set out. I want to take this opportunity to ask Deputy Troy to confirm what Fianna Fáil's policy in this area is. At an Oireachtas committee meeting earlier this year, Fianna Fáil's health spokesperson acknowledged:
Starting with doctors, numerous sources say our doctors are still some of the best paid in the world ... we are in the top ten [countries] ... the reality is that our doctors are not badly paid, but well paid ... it appears that our nurses are pretty well paid. Our doctors also appear to be well paid.
What is Fianna Fáil's policy in this area? Its health spokesperson acknowledged earlier this year that pay levels are good and reflect the quality of work that is going on in our health services, but he argued for more pay on "Morning Ireland" last Friday. Does Deputy Troy accept the Public Service Pay Commission's recommendations in respect of recruitment and retention?
The Minister is trying to deflect from his own responsibilities. He is in government and is responsible for making decisions. It is the Minister, and not any Deputy on this side of the House, who has the executive functions. Does he believe that if the Public Service Pay Commission's report is fully implemented, it will resolve the recruitment and retention issues in the health service? He seems to think there are no recruitment and retention issues in the health service, but it is clear that such issues exist. What are the plans for recruiting and retaining staff within the health service? Does he think the system will cope with the new demands associated with our increasing population and the roll-out and implementation of Sláintecare? I am speaking quite parochially as a representative of Longford-Westmeath who engages with the health professionals working at Midland Regional Hospital in Mullingar.
They are at breaking point in their ability to recruit and retain key staff. That is a fact.
I accept fully the recommendations as Minister for Public Expenditure and Reform and I have answered Deputy Troy's questions. I accept the recommendations and analysis put forward by the Public Service Pay Commission. It stated we have challenges in particular areas. I accept the recommendations it has put forward on what needs to be done from a targeted allowance point of view. My answer is very clear. On that basis I and the Department of Health will engage with representatives from nursing. In acknowledging where I stand on the issue, it is important for everyone, and particularly for Fianna Fáil as the main Opposition party that has made great efforts under Deputy Michael McGrath, to be clear on where they stand on key issues of economic responsibility.
Who speaks for Deputy Troy's party on this matter? Is it Deputy Michael McGrath, Deputy Cowen, Deputy Troy himself or is it Deputy Donnelly? If it is Deputy Donnelly, then he is saying different things depending on the audience. My understanding is that Deputy Troy's party is committed to the implementation of the public service stability agreement. If that is the case, I want to understand from Deputy Troy if his party accepts the recommendations of the Public Service Pay Commission. Is it willing to be clear in outlining that in order to manage new service demands and new resourcing needs we need to be careful about how we manage our public sector wage bill?
56. Deputy Jonathan O'Brien asked the Minister for Public Expenditure and Reform his plans for pay equalisation for post-2011 entrants to the public service; if full equality will not be reached until 2026; and if he will make a statement on the matter. [43896/18]
57. Deputy Barry Cowen asked the Minister for Public Expenditure and Reform the status of the issue of pay inequality; and if he will make a statement on the matter. [43948/18]
58. Deputy Paul Murphy asked the Minister for Public Expenditure and Reform his views on fully restoring pay and allowances to new entrant public servants; and if he will make a statement on the matter. [43949/18]
59. Deputy Thomas P. Broughan asked the Minister for Public Expenditure and Reform the steps he is taking to address new entrant pay equalisation in the public service; the additional spending being provided in 2018 and in budget 2019 to achieve pay equality in sectors such as health and education; and if he will make a statement on the matter. [43875/18]
My question is in a similar vein. What are the plans of the Minister for Public Expenditure and Reform, Deputy Donohoe, for pay equalisation as announced in the budget?
I propose to take Questions Nos. 56 to 59, inclusive, together.
After the passage of the Public Service Pay and Pensions Act 2017 in the Oireachtas, I accepted an amendment to section 11 of that Bill that required the preparation of a report on new entrant pay. The report was furnished to the Oireachtas in March this year and provided the context within which negotiations on this issue were recently completed. The measure announced provides for a pathway to address the remaining salary scale issues in a way that is both balanced and sustainable. It provides the fairest and the most affordable path to managing the €200 million cost I have identified as being associated with this issue.
The agreement we have reached provides for two interventions in the pay scales of these public servants. One will take place on point 4 of the pay scale and the second will take place on point 8. If accepted, this measure will apply from 1 March 2019 and will be applied to each eligible new entrant as he or she reaches the relevant scale points, points 4 and 8, on his or her current increment scale. This will have the effect of bypassing the relevant points on the scale and thereby reducing the time spent on the pay scale for progression to the maximum point. This measure will benefit over 61,500 public servants who have been recruited since 2011 and underscores the value of being part of the Public Service Stability Agreement, PSSA, 2018-2020. This will include, for example, 16,000 teachers, 5,000 special needs assistants, SNAs, and almost 10,000 nurses. It is estimated that some 58% of new entrants will benefit from this measure in 2019, rising to 78% or 47,750 people by 2020. All new entrants will have received the two point jump by 2024 with carryover costs falling in 2025.
This is a measured agreement that allows for progress in this area but does not compromise our ability to make progress on other societal priorities such as health and the provision of social and affordable housing. As such, it is both fair to public servants and fair to all those who depend on our public services. The cost of this measure in 2019 will be €27 million and this was provided for in budget 2019. The benefits under this measure will be effective from 1 March 2019 and will be restricted to parties adhering to the Public Service Stability Agreement 2018-2020.
I am sure the fact that four of the five Priority Questions today are on this issue indicates its importance, not just to the Opposition but to the Minister as well and, more importantly, to the public sector workers who will be affected by this. I appreciate the extra time being given because the questions are grouped.
I am sure the Minister is aware of the ballot last week by the Irish Nurses and Midwives Organisation, INMO. Of those who cast their vote, 94% rejected the proposals that are going to be brought forward by the Government. The executive council of the INMO confirmed it would consider industrial action at its next meeting. The organisation's president also gave a stark warning to the Minister and his Government by stating that they were "sleepwalking into a serious industrial dispute". The teachers' unions have also criticised the Minister's proposals for failing to deliver pay equality and, as a consequence, failing to tackle the recruitment and retention crisis of which Deputy Troy spoke.
The reality is there is not going to be pay equalisation until 2024, 2026 with the carryover cost, but 2024 as the Minister indicated in his reply. This is completely unacceptable to many public sector workers, as indicated by the INMO ballot. This was a political decision. There is nothing stopping the Minister from implementing pay equalisation over one, two, three or four years. He has chosen to stretch it out to 2024 for political reasons.
I will take individual questions now and then I will group the second set of questions.
On the two points Deputy Jonathan O'Brien has made, first, this does represent a genuine and comprehensive effort from the Government, and myself, to respond to the issue of new entrant pay. I am honouring the commitment I gave in the public service stability agreement. To give an example of what this means, we can look at the teaching profession. The move I am proposing to make with the adjustment of two points will mean that the first point of the teaching scale at which recruitment occurs - as Deputy O'Brien knows it is currently €36,318 - will move to €37,692. That is a significant change in pay level at that point on the pay scale. It seeks to deal with the issues raised by unions in respect of new entrant pay and to recognise the value all public servants contribute, and our front-line public servants in particular.
On the Deputy's second point about the decision made that these changes be spread over a number of years, this is a political decision. It is a political decision I made as Minister to try to ensure I have the ability to meet this need while also meeting all of the other service needs in coming years. Deputy Jonathan O'Brien is aware of those needs.
I listened to the reply from the Minister. There is a process under way within the unions. It is not fully complete and I do not want to pre-empt it. Pay inequality in the public service, however, between our teachers, special needs assistants and nurses is causing friction within staff rooms and hospital wards. It is harming the morale of workers. From what the Minister has said, his intention is that this is not going to be resolved until 2026. If we are to wait until then for this to be resolved, it is going to lead to problems over the next eight years.
To respond to Deputy Troy, I understand the issues pay inequality has caused. I have engaged with the matter through my representatives and the Department of Public Expenditure and Reform over the last year.
We believe this is a comprehensive proposal that looks to address the issue, and it has been acknowledged as such by some unions. There is a process under way and, as it is under way, it is incumbent on me to point out the benefits of this approach and also to make the point that it offers the ability to meet other needs that arise, for example, in regard to education and our health services. That is why we have put such effort into this proposal.
The Deputy said it will take a number of years for this matter to be dealt with but it is worth making the point that a large number of those affected by this issue will see a change in their circumstances beyond the public service stability agreement during 2019.
I think it shameful that the Government has decided to institutionalise two-tier pay and pay discrimination against new entrants until 2024, and that Fianna Fáil, let us be clear, has agreed to that continuation. I salute the members of the INMO for their resounding rejection of the proposal, with 94% voting against. It is solidarity in action, understanding that an injury to one is an injury to all and refusing to be divided. Ms Phil Ní Sheaghdha made the point that her members are telling us they cannot go on with this number of unfilled vacancies; it is not safe for patients and it is not safe for staff. This is not just about those who are affected but about the ability to fill our public service positions. Teacher unions are currently balloting and I hope the teachers will follow the action of the nurses in rejecting this institutionalisation of two-tier pay. The Government could then be faced with joint action by teachers and nurses to finally reject this entrenched pay inequality.
The Deputy's response to this does not surprise me because all he is interested in is division, friction and turmoil.
The Government created the division.
That is the clear agenda of the Deputy and is articulated as such by his views. Let us look at the facts. In 2019, if this agreement is accepted, 58% of those who entered during the new entrant period will benefit from this agreement, and this will increase to 78% by 2020. Underneath those percentage figures is the reality that this is an agreement which will offer benefits to 47,750 of our public servants who do such valuable work in our hospitals, classrooms and all across the public service and Civil Service.
Last night, in the debate on the Finance Bill, we discussed the unwinding of FEMPI. Effectively, the Minister said this will take at least 16 years for 300,000 public servants so that rather than having one decade of austerity, they are heading for two decades. Were there not other options for moving to immediate pay equalisation under section 11 of the Public Service Pay and Pensions Act 2017? The Minister and other Deputies will know that, any time we visit a school, we find the whole issue of pay equality comes to the forefront. The 16,000 new teachers hired since 2011 consistently raise this with us as a grave injustice. The Minister explained the jump in the two increments but we are not returning to pay equality.
I met several delegations of hospital doctors and consultants just last week. Yesterday, the Minister for Health, Deputy Harris, said the two-tier system is clearly a factor which is profoundly affecting recruitment and retention. He said it is estimated it would cost €45 million to bring the pay of new entrant consultants into line with their colleagues. Week in, week out, we hear of children waiting for mental health assessments and other assessments but we simply do not have the staff to do that and we cannot retain the staff we have. It is a grave injustice. The Minister needs to unwind FEMPI once and for all.
We are unwinding FEMPI. I do not know if the Deputy has missed what we have been doing and what I have been looking to do in successive budgets. The last item of FEMPI legislation I brought in front of the House about a year ago lays out a path whereby the majority of our public servants on low and middle incomes will see the FEMPI measures that were applied to them gradually unwound, and they will see their wages increased back to levels that are affordable for the State and allow us to meet all the other service needs we have. I am in classrooms in primary schools every week and I have heard the issues the Deputy is raising in regard to the concerns teachers have about their careers and where their wage levels stand.
The Minister is the guy who can fix it.
That is why we have made this change. What the Deputy is not recognising in what he said is that austerity tends to be defined by reducing public expenditure and reducing pay. We are doing the opposite. We are increasing public expenditure and we are affordably increasing pay. Regarding what the Deputy said about retention and staffing difficulties, he is not acknowledging that, in recent years, we have increased the number of public servants we have working for the State and in our front-line services.
What price does the Minister put on industrial harmony? The full cost of pay equalisation is €190 million. The Minister has set aside €75 million out to 2020 and he will then spread the rest out up to 2026. We are not talking billions of euro. It will cost €190 million for industrial harmony and to try to bring people back to levels of equality post-2011. It is not a huge ask. People look at the recovery and the amount pumped into banks, to which, by the way, the Minister is still giving tax breaks. He could have addressed that in the budget by way of a bank levy and he would have had more than enough to fund €190 million. I do not say it should have been done over one year but to do it out to 2026 is unacceptable.
The Minister said in his initial reply that as ratification is currently under way within the unions, he is not going to pre-empt that process. In the event that the majority of the unions reject the proposals that are in place, what is his plan and how is he going to deal with this issue? As I said, there is an uneasiness within our public services, for example, in the classrooms, to which the Minister alluded. How will he ensure this issue is addressed in advance of 2026?
The Minister says that all I am interested in is division and dividing people. It is deeply ironic because, on this issue, it is the Government which, continuing the actions of previous Governments, is precisely dividing people and trying to divide between new entrants and older entrants, with the result that teachers and lecturers starting at the bottom of their scales get paid more than €4,000 less than if they had started in 2010. The INMO, in voting against those proposals, stands for unity and for people to say they stand together and reject the division that the Government is trying to impose on them. It would be excellent if the teachers took the same stand in the ballots that are currently taking place. It is the best way to reject the Government's continued approach of divide and rule. If teachers and nurses were to stand together to reject these agreements and to threaten industrial action, the Government could be brought to heel and forced to cough up to pay for pay equalisation and to end pay discrimination now.
I echo the comments of my colleagues. The report we got from the Parliamentary Budget Office in regard to the €190 million showed that the adjustments would be something like €80 million for health, similar for education, €12 million for the justice area and €4 million for the local authorities.
Thus, for a relatively small measure in the context of the total budget we could begin to address this problem.
I will return to a point made by the last delegation I met. They were representing the hospital consultants. They made a powerful case by saying the people recruited after 2011 had a 57% cut in salary. Moreover, there was a 25% difference over nine years, even with some of the more recent changes. The example I was given compared Ireland with countries like Sweden and Norway. On the basis of the level of consultants per capita Ireland compares in an adverse way. For example, there was no mention from the Minister about the acute beds in the budget speech or the type of staffing led by consultant doctors that we need. We have only nine paediatric emergency consultants in the country, while the profession and the health sector estimate that we need something like 30 consultants. We are spending approximately €114 million per year on agency doctors when it would only cost €20 million to introduce pay equality. The Minister seems to have his priorities wrong in this area. If we want to have a vibrant, well-led health sector, then we need to expedite this process in the coming year or so.
We have a vibrant health service. We have a health service that, despite many of the difficulties it faces every day in the accident and emergency units, through its front-line workers, by and large delivers better health outcomes for our citizens. Due to the efforts of our staff and the resourcing and support they get, when our citizens get into the system they get the care and focus they need and deserve. We have a system that is capable of responding to the health needs of our citizens.
I will go through each of the points that have been put to me in turn. I will begin with what Deputy Troy said. A process is under way. The process involves votes being cast and then counted. I am clear about the proposition that we have negotiated with the public services committee of the Irish Congress of Trade Unions. I believe the proposition can make a difference to a large number of public servants quickly while also meeting all the other service needs that have been raised with me, even those raised during this session.
I stand by what I said to Deputy Paul Murphy. It is noticeable that he used the language of threats to Government. I am interested in trying to constructively engage with other stakeholders and reach agreements with our citizens that deliver outcomes for them, including outcomes relating to their wages and relating to meeting all the other priorities that we expect Government to be able to respond to.
From what Deputy O'Brien said one moment ago, it appears he wants this issue dealt with within a single year.
I referred to a period of two years.
It applies even across a two-year period. In fairness, Sinn Féin has outlined ways in which tax could be raised to do that. However, my contention is that the tax measures Sinn Féin has outlined involve multiple tax increases and dealing with those sectors of employment that create jobs. At a time of such potential uncertainly due to Brexit we need to ensure that policies are being implemented by Government that can retain and create further jobs as opposed to affecting them through the kind of tax raises Sinn Féin is looking to bring forward.
What about the banks?
I will deal with the point made by Deputy O'Brien relating to the banks. There are consequences with regard to what Sinn Féin is looking for in terms of our banking system. I realise we will be dealing with this matter during the Finance Bill. I have published a paper that deals with the consequences of treating our banking sector differently. There are consequences, including consequences for consumers of those banks. There are consequences for those in our economy who need credit from those banks. Finally, there are consequences for our State, which still owns a large chunk of those banks.
I will address what Deputy Broughan said as well. I have acknowledged the issues that have arisen and my determination to make progress in this area. Will Deputy Broughan acknowledge that since 2011 over 61,500 new entrants have joined our public services? That amounts to almost 19% of the total workforce. In our efforts to treat them in the way I have described, we put forward a proposition that, I hope, will be favourably considered.