SINCE ITS INCEPTION two years ago there has been much said and much written about the Croke Park Agreement by those closely linked to it such as politicians, trade union leaders and ordinary workers in the public service.

But while there has been much talk of increments, redundancies, and reforms there are some who are still a bit confused as to just what exactly the agreement is all about.

Recently we were asked by some readers to explain what the agreement entails, why it is so important, and what it means on a wider level for the country, its economy and its workers. We’re a pretty obliging bunch here at TheJournal.ie, so here’s what you need to know…

What on earth is the Croke Park Agreement?

What will now and forever (or at least until the end of this piece) be known as the CPA is an agreement reached by the government and the Public Services Committee of the Irish Congress of Trade Unions (ICTU) as well as the Garda and Defence Forces representative associations in June 2010 i.e. public sector workers.

Officially known as the Public Service Agreement – but given the name because of the venue where negotiations took place (in its conference facilities as opposed to on the field!) – it runs from 2010 to 2014 and is broadly a commitment by the public service to “change the way it does business” and in return there is a commitment from the government that there will be no reductions in pay rates or compulsory redundancies within the public sector.

Excluding those who work in semi-state companies like the ESB there are just over 334,000 people working in the public sector which accounts for just under a fifth of the current workforce in Ireland. That makes the agreement a pretty significant one within the Irish labour market.

Okay but what does “changing the way it does business” mean?

Effectively it means that public servants and their managers are required, under the agreement, to work together to change the way in which the public service operates so as that it does so with less money and less staff  but more efficiently.

The idea is that while there is less money and less staff the level of service from the public sector does not fall and in some cases it is hoped the level of service can be improved.  The primary goal, as it was when the agreement was reached pre-bailout, is to get the budget deficit below 3 per cent of gross domestic product by 2014 and this effectively requires a significant reduction in the number of people working in the public service.

So if we look at health for example, the idea would be that even if there are fewer doctors, fewer nurses and less money for management in the health sector to operate with there would be a change in the way they work to ensure that the same level of service continues. Similarly this would be the case in education where fewer teachers, and less money would still mean that pupils and students would get the same level of education.

The same would theoretically apply in all areas of the public service such as the gardaí – where we know that station numbers are being cut - emergency services and the overall civil service. This also all ties in with the current government’s wider reform agenda with Health Minister James Reilly looking to radically overhaul the provision of health services in Ireland, as just one example.

Hold on, but 2010 was when the last lot were in power?

That’s right. This agreement was reached in the final months of the Fianna Fáil-Green Party coalition government but had broad cross-party support and the current government has pledged to honour the CPA particularly given many of the unions involved in it would have an affiliation to the Labour Party. As recently as April, the Tánaiste and Labour leader Eamon Gilmore said of the CPA: “An agreement is made, you honour the agreement.”

The programme for government commits to reducing staff levels in the public sector by between 18,000 and 21,000 by 2014 compared to the total number at the end of 2010.

So we’re in 2012, halfway through the deal. How has it been working so far?

Well so far we’ve had two annual reports into the deal and how it is being implemented which have claimed that savings of €600 million were made across the public service in the first year and €920 million in the second year. That brings you to around €1.5 billion in total which has been saved so far across the public sector.

Staff numbers have been reduced by 17,300 in those two years which include the exodus of more than 8,000 staff in the early part of this year under an early-retirement scheme. You may remember that was causing particular concern about what contingency plans were in place to deal with these departures and the potential effect on frontline services. There was a lot of talk of redeployment of workers in areas where there would be the type of losses than might impact services.

On top of that we had one of the country’s leading economists Colm McCarthy bemoaning the government’s handling of the retirements as well as criticising the public service pension scheme which he said is underfunded and akin to a “Ponzi scheme”.

But aside from that the two reports so far have indicated the in broad terms the agreement is working and functioning as it was intended. The public service was “doing more with less” the Public Expenditure and Reform Minister Brendan Howlin said at the publication of the second review by CPA Implementation Body recently.

So it’s working fairly well. What should we be worried about?

Well broadly the CPA is working, yes, but there are a myriad of concerns from both the government and the public sector trade unions and representative groups as to whether the CPA as it stands is sustainable for another two years.

Unions such as the country’s largest, SIPTU, are worried about the effect the deal is having on low-paid workers which they believe are being disproportionally affected by roster changes, redeployment, extended working days and loss of allowances.

On the other side of the table, business repesentative groups such as Chambers Ireland have voiced concerns that the deal is not delivering enough savings given the deficit which for the first half of this year was around €9.4 billion. Some within government have also raised concerns about the deal.

Chief among them are the Transport Minister and Fine Gael TD Leo Varadkar who caused controversy in two instances last month. First he suggested that there should be compulsory redundancies in situations where a State agency or quango is closed down. The CPA specifically states that compulsory redundancies will not apply within the public service.

He also suggested that pay increments should be deferred saying that it could save as much as €200 million a year. The CPA makes no mention specifically of increments but commits to there being no further reductions in the pay rates of serving public servants for the lifetime of the agreement.

Unions would view increments as being part of pay rates and also argue that such a reduction in increments would hit the low-paid disproportionately. They also think that allowances, which were in the news this week, are protected under the agreement and cannot be touched by the government. Some teaching unions have gone as far as to say that they will ballot for industrial action if they are cut in anyway.

Given the economic situation, surely Varadkar is not being unreasonable in suggesting some changes?

Well it should be noted that the CPA came about after two years where €3 billion had been saved from the public service pay and pensions bill with a considerable effect on the public service. This came about through pay increases due that were not paid, a general moratorium on recruitment and promotion, a pension related deduction of, on average, 7 per cent applied to all public servants’ earnings and a reduction in rates of pay at the beginning of 2010.

From a public service worker’s point of view they made significant sacrifices leading up to the deal and have agreed to significant sacrifices in the deal whereby they are committing to doing more with less staff and less money at their disposal. In return they will keep their jobs and their pay rates which for some, worried about Ireland’s deficit and the overall efficiency of the public service, is not sacrifice enough.

Those who question the effectiveness of the CPA cite the annual bill for sick leave of around €26 million and the myriad of public service allowances that were disclosed this week and think that more needs to be done to cut the cost of Ireland’s public service.

What does the public think?

In April an Irish Times/Ipsos MRBI poll found that the majority of the public wanted the deal either renegotiated or abolished. The opinion poll found that 16 per cent believe the deal should remain in place, 43 per cent want it modified in some way, and 22 per cent want it abolished. But nearly a fifth (19 per cent) have no opinion at all on the deal.

Those who were polled are likely to have varying reasons for wanting the deal to be altered in some way. Some believe that as it stands, the CPA is not delivering enough savings in the public service and that more needs to be done in terms of there being a provision for redundancies and for pay rates to be cut.

Others believe that the deal as it is structured now is not fair on the low-paid workers in the public sector in that the changes that are coming into effect are more likely to affect those on lower wages than those earning higher salaries.

So clearly there are issues, disagreements and splits but what’s going to happen?

The deal has another two years to run. While there will no doubt be plenty of talk about it in the months and years ahead the official line for the moment remains that the government is committed to it as long as the unions are committed to it too. The unions will maintain the line that the agreement must be preserved while holding the threat of industrial action and possible strike if it is not.

Speaking in the Dáil recently, Brendan Howlin – whose responsibility it is it to oversee the implentation of the agreement – said: “So long as Croke Park and the unions signed up to it deliver their side of the bargain, the government is committed to delivering its side.”

Politically, there is a strong feeling within the Labour Party that the agreement needs to be honoured. While on the face of it there is also a commitment from Fine Gael to the deal there is, as evidenced by the comments of a senior party figure like Varadkar, a belief that the agreement may need to be revisited. At the very least there is a frustration with the limits it puts on reform of the public service among some in the senior coalition party in that there can be no sackings or pay cuts.

Despite a series of austerity laden budgets and unemployment this week hitting just short of 15 per cent there has been little in terms of industrial strife in Ireland. Unlike Greece, people here have not been on the streets in their masses and that has a lot to do with the presence of the CPA which accounts not only for significant portion of the workforce but just under half of those in the workforce that are members of unions.

And for that reason the success of the Croke Park Agreement will be largely dependent on the success, or not, of the economy in the months and years ahead.

Read more on the Croke Park Agreement >