Four important elements designed to ensure value-for-money from the benchmarking deal were ignored, writes Richard Bruton
If I knocked on the doors of every one of the 1.28 million households in the State and asked them to hand over more than €1,000 in cash next year and every year after that, the first question I would be asked is: what am I getting for my money?
If I told them that the total of €1,300 million I planned to collect from them each year would pay to run all of our 4,000 primary schools or that it would fund the operation of seven new hospitals the size of Beaumont Hospital, they might accept that it was money well spent. But, if I said that their annual €1,000 contribution will, in fact, go towards paying a benchmarking deal that has failed to deliver on any real benefits, they would certainly be entitled to say "hang on a minute - explain to me again what I am going to get for my money?"
A €1,300 million bill - the combined exchequer and non-exchequer elements - is the reality of the benchmarking deal for the taxpayer. Value for money has been the Fine Gael position since the deal was struck. We, and the taxpayer, are entitled to ask - what are we getting for our money and how will we pay for it?
Is it good value?
Benchmarking was supposed to have four elements designed to ensure that it would give good value.
• Extra payments would only be made where there was hard evidence of recruitment difficulties or of lower pay than the private sector.
• It would end all relativity-based pay claims.
• Co-operation with change would not be the basis for any pay increase.
• Three quarters of the award would be conditional on delivery of improved public services.
Rather than focus on these four elements, the Government completely blew the opportunity to deliver real reform and improvements in the public service.
The taxpayer will never see the hard evidence to justify the awards, because the Government has ensured that this evidence will never be released.
However we do know that the independent economist on the benchmarking body resigned because, he said, that the evidence did not stand up.
Also, the reported death of relativity claims is greatly exaggerated. The recent craft workers parallel pay deal with 4,000 staff resulted in another 50,000 workers piggybacking on to a 17 per cent pay increase because their pay is still being judged relative to the craft workers.
Far from bringing to an end an era when pay increases would be given for co-operation with modernisation, the Government has relied almost exclusively on "co-operation with change" as the basis for its claim that taxpayers are getting some value in return. No trade union was asked to move beyond established positions. Business as usual was presented as if it were reform.
When pushed in the Dáil by the Fine Gael leader, Enda Kenny, for three tangible improvements that the taxpayer could see as a result of benchmarking, the Government couldn't even come up with one.
How will we pay for it?
Regardless of the actual hollowness of the deal and what it was supposed to deliver, no Minister has yet addressed the very basic issue of how we will pay for the deal. You don't need to be Einstein to see what has happened as the first €500 million of Benchmarking was paid out in 2003. The Government resorted to a frenzy of increases in charges, levies, price increases and stealth taxes.
Even still, nine out of every additional €10 spent on public services went on increases in the public pay bill. While pay increased by 12 per cent, the non-pay budget increased by just 1 ½ per cent. What followed was inevitable. Hospital beds had to be closed down. Home help services were curtailed. Respite care was denied to families. Community Employment schemes were axed. Not only were ordinary families paying more, but services for the most vulnerable sections of our community were crudely cut back to make way.
The same will happen, only worse, as benchmarking gets fully into gear on January 1st, 2004. Even before making provision for the benchmarking award, the Minister for Finance has already predicted a €3,500 million deficit in his Budget. To meet the cost of the deal he would have to put up the standard rate of income tax by three and a half points. For local authorities to pay their share would require a 20 per cent increase in commercial rates and service charges. The alternative to a choice from this menu is to inflict deep cuts in public services.
Finally, some commentators have suggested that Fine Gael has belatedly taken a stand on the benchmarking issue. This is not the case.
Back in July of 2002 when the deal was first announced Fine Gael said the key to unlocking benchmarking was getting value for money. The key was to negotiate reforms that would deliver better quality services. We waited in vain. The real laggards on this issue are the junior Government partners. It is pitiful to see them squirm as they try to show that there is a pay-back for taxpayers. They offer very thin gruel.
They cite industrial peace, but industrial peace has been a condition of all of the past agreements.
They cite promotion on merit, but this is precisely the sort of change for which no payment was to be made.
They herald parent-teacher meetings to be conducted "half within and half without normal school time" but this was already agreed and paid for in PCW.
Fine Gael knows that renegotiating the deal is unpopular with some groups. However renegotiation of pay deals has happened in the past where the circumstances warranted it.
On this occasion, the responsibility lies squarely at the door of Government for failing to put in place a reform package that will yield value in return for benchmarking.
The fault may be that of the Government, but we are all in this together. Providing the breathing space to get it right is unquestionably the right course to pursue.
Richard Bruton, TD is the Fine Gael deputy leader and spokesman on finance.