THE GOVERNMENT has told all departments and State bodies that they will have to meet the cost of implementing the proposed new national pay deal from their own resources.
In a letter sent to Government departments this month, the Department of Finance said in finalising its spending plans for next year the Cabinet had decided that no specific additional provision should be included to meet the cost of the increases due next year.
Under the terms of the proposed agreement, more than 300,000 staff in the public sector are set to receive a 3.5 per cent rise from September.
The Department of Finance said the effect of the Government decision was that "the payroll cut being sought in 2009 amounts to just over 4 per cent, rather than the 3 per cent decided on in July".
The Department of Finance said the decision applied across the board. It has sought a report on how the pay increases will be met by public sector bodies by the end of next month.
"Accordingly, on the basis that the September 2009 increase is liable to be met, you should identify the steps that would be required to meet the payroll target in your department and the bodies under its aegis, and report thereon to this department not later than Friday, November 28th, 2008," it said in the letter.
The country's largest union Siptu said yesterday it had not been informed of the Government move and would be seeking clarification.
The Irish Times revealed on Thursday that the Health Service Executive (HSE) had indicated to unions that pay increases for its 110,000 staff may have to be financed through work-practice changes and efficiency savings.
The HSE estimated the 3.5 per cent increase for its employees next September could cost about €112 million.
In a letter to the HSE in recent days, the Department of Health said Minister for Health Mary Harney had instructed that services were not to be reduced as a way of funding the new pay increases.
It is understood the Minister maintained that the money would have to be generated through work-practice reforms or efficiency savings.
Informed sources said the HSE was proposing that to meet the funding shortfall it could consider reducing the amount paid in overtime to non-consultant hospital doctors. The bill for such overtime is running at about €130 million per year.
The HSE is also suggesting that the levels of on-call staff in the health sector could be examined, as could changes in current travel and subsistence arrangements.
Spending on training for health service staff may also be examined.
Union leaders have said there cannot be different rules for pay increases in the health sector under the proposed new national wage agreement than those applying in other areas of the public sector.
Health service union leaders told the HSE at a meeting on Thursday night that the proposed national pay deal contained provisions for the entire public service and in no other area had moves been made to link pay increases to work-practice reforms.
Meanwhile, the executive council of the Irish Nurses' Organisation (INO) has recommended that its members accept the proposed new pay deal in a ballot to commence next week.
The INO said its executive council "arrived at this decision following a detailed consideration of the agreement, the current status of national issues specific to nurses and midwives and from feedback from a series of regional meetings held earlier this week".
The INO executive also decided to meet on November 4th to assess the implications of the Government's allocation to the health service for next year.
