I move: "That the Bill be now read a Second Time."
I thank the Leas-Cheann Comhairle and Deputies for facilitating the commencement of Second Stage of this Bill this evening. This Bill is a key enabler for the new public service pay agreement, Building Momentum, and allows for a range of reforming pay matters, including implementation of aspects of Sláintecare. It continues the process of unwinding and repeal of the financial emergency measures in the public interest, FEMPI, legislation. As such, it builds on changes that began with the Lansdowne Road agreement in 2015 and the Financial Emergency Measures in the Public Interest Act of 2015 and continued with the Public Service Pay and Pensions Act 2017 and Public Service Stability Agreement 2018-2020.
The Bill will allow implementation of the pay increases provided for by Building Momentum. Before dealing with the specific provisions of the Bill, I note that in December 2020, negotiations concluded on a new public service pay agreement entitled Building Momentum, which will apply for the next two years. The agreement was accepted by my colleagues in Cabinet and ratified by the public services committee of the Irish Congress of Trade Unions on 23 February. That decision by ICTU is welcome as it will deliver stability for the Government, public service users and public servants over the lifetime of the agreement.
We will all agree that the public service has stepped up to the challenge of the Covid-19 crisis and has delivered a world-class response. Public servants have been quick to adapt and readjust the way in which services are delivered so as to minimise the negative impact of the pandemic on the public. It is important that this agreement recognises the value of the work of our public servants during this pandemic and provides for affordable increases with pay adjustments weighted toward those on lower incomes. This is balanced by ensuring that the Government continues to exercise a prudent approach to the overall management of our public finances. The economic sustainability of this agreement is based on a pay pause for the majority of 2021 and modest but reasonable pay increases in 2022 when we expect a strengthening economy and labour market recovery as the vaccine roll-out takes effect.
The agreement provides for general pay increases of 1% in October 2021 and in October 2022, or €500, whichever is greater. I am also allocating a sectoral fund amounting to 1% of basic pay to resolve any outstanding issues such as those that resulted in industrial action in the period of previous agreements. There is also an independent process on the issue of Haddington Road agreement hours and an envelope of €150 million is being allocated to make a start in 2022 on implementing recommendations from that agreement in respect of the issue of hours.
This is an agreement that is weighted towards those at lower incomes, with an increase of approximately 5% for the lowest paid public servants. These groups will also benefit more from other measures in the agreement, including changes to overtime rates and premium payment adjustments. The pay adjustments provided for by the agreement are phased with implementation commencing later in 2021. In that regard, the agreement is fair, affordable and sustainable, and recognises the economic challenges facing the country. Most importantly, the agreement provides certainty on pay and industrial peace over the next two challenging years. A key element of the deal, one which taxpayers expect and the unions have now agreed, is that industrial peace will be maintained and there will be no additional cost increasing claims.
The agreement also sets out a reform agenda that seeks to embed the agility demonstrated during the Covid-19 period into enhanced public service delivery in the future. These include harnessing the capacity of technology and remote working across public services. It takes a new sectoral approach which recognises that different areas may have unique and innovative approaches to providing service delivery. A key element of this is that each sector will produce and publish reform plans that will demonstrate delivery each year.
Crucially, payment of the 1% sectoral fund will be conditional on the delivery of actual reforms. There will be scope to extend opening hours of public-facing services, so when people need to see someone to access a public service, it will be at a time which is convenient for them. Learning from experience in the Covid-19 pandemic, mechanisms will be agreed where staff will move quickly to different parts of the public service to deliver a response to critical and urgent demands.
As noted, the Bill will also enable progress on a range of pay reform matters. I will touch briefly on two of these, namely, Sláintecare and the seagoing commitment scheme in the Naval Service. A key objective of the Sláintecare implementation process is to remove consultant private practice from public hospitals. Central to implementation of this reform is a move to public-only consultant contracts and to tailor that contract to align with wider Sláintecare reforms. Taking that into account, all future consultant appointments will be to a new Sláintecare public-only consultant contract from a date to be decided shortly. The Sláintecare contract will have no provision for private practice and will be available to all existing consultants. The offer will be informed by a process of consultation with key stakeholders.
The new contract, noting the significant reforms involved, is to offer an increased pay level.