10. Deputy Dara Calleary asked the Minister for Public Expenditure and Reform his plans to address pay equalisation across the public sector; if his Department will take a leading role in determining the way in which pay equalisation will be rolled out across Departments; and if he will make a statement on the matter. (Question 47264/17 asked on 09 Nov 2017)

Deputy Dara Calleary: In the context of forthcoming legislation to unwind the financial emergency measures in the public interest, pay equalisation is to be dealt with by the Public Service Pay Commission. Will the Minister provide a timeline for addressing this issue? When does he expect to be in a position to receive a report or recommendations from the commission?

Deputy Paschal Donohoe: The issue of addressing the difference in incremental salary scales between those public servants who entered public service employment since 2011 and those who entered before that date was addressed with the relevant trade union interests under the provisions of the Haddington Road agreement. My Department and the Department of Education and Skills reached an agreement with the INTO and TUI on many, albeit not all, of the issues related to pay equalisation and we made progress in resolving some of them.

As part of the public service stability agreement, a commitment was made to commence a process of examining pay equalisation within 12 months of the agreement being reached. While the agreement has only recently been ratified and I have not yet introduced legislation to give effect to it, I am pleased to note that the first meeting under this process took place on 12 October. As a result of that meeting, a process has been agreed whereby the issue will be analysed and data generated. The process will be managed by the oversight body for the public service stability agreement, on which officials of my Department and representatives of the Irish Congress of Trade Unions sit. The process will be managed by both parties to the agreement and I am sure efforts will be made to progress work quickly next year.

To return to a point I made in my exchange with Deputy Lisa Chambers earlier, the Department of Education and Skills has estimated that the cost of implementing pay equalisation in education would be €70 million in 2018. If pay equalisation were extended to the Department of Health, the cost would increase to €156 million. If it were extended to all staff hired on new entrant scales, it would increase to €209 million. To reiterate a point I made to Deputy Lisa Chambers, it is very difficult to make a move in one area that does not have consequences elsewhere. To put the figure of €209 million in context, it amounts to a significant proportion of the full cost of the entire pay agreement in the early years after its implementation.

Deputy Dara Calleary: I thank the Minister for the update. Is there a deadline for the work to conclude or will it proceed through next year? Will it be completed in advance of next year’s budget? Is the projected cost of €209 million to address pay equalisation an annual or once-off cost?

Deputy Paschal Donohoe: It is an annual cost. In terms of the timeline for completing the process, I expect it to conclude - one way or another - in advance of next year’s budget. We will engage in the process in good faith. From my dealings with the INTO, which has raised the matter with me, and the Irish Congress of Trade Unions, I am aware of the difficulty the pay equalisation issue causes. It would be very difficult to address it in isolation, however. The costs of implementing pay equalisation in the Department of Education and Skills alone are significant. An additional €70 million is roughly comparable to twice the yield from the training levy for next year. This levy will generate a significant amount of the additional resources the Department of Education and Skills will receive next year. These will be invested in third and fourth level education. All of this is taking place in the context of the improvements we have tried to make in recent years to starting salaries of public and civil servants.

Deputy Dara Calleary: While I recognise the complexity of this issue, when an organisation such as the INTO, which normally takes a very constructive approach to participating in many issues in the past ten years, takes the decision it did on the public service pay agreement, it highlights the importance of starting the process and addressing the pay equalisation issue once and for all. We all recognise the complexity of the issue and I welcome that the process has started. Will the process include a public consultation on pay equalisation or will the issue be addressed exclusively within the confines of the public service pay agreement?

Deputy Paschal Donohoe: I do not envisage a broader consultation on this. It is part of the agreement that I made with representatives of the union movement on the Public Service Stability Agreement. In fairness, given that I have made that commitment, I will adhere to the process.

The process, as I understand it, does not include a role for public consultation. No doubt the union movement, in dealing with this issue with us, will consult with its own members on the issue. I am sure that is already under way.

I am well aware of the importance of the INTO and the contribution it and other unions have made at times of great difficulty to our country. It is in recognition of that that, for example, I reached an agreement with the Minister, Deputy Richard Bruton, and the INTO and the TUI approximately a year ago to make big progress on that matter for a number of teachers. As I have said, due to the importance of the matter we have initiated this process. Even though the agreement only requested us to do it within the first year of the agreement and we are only a few weeks into it, we already have that work under way.

Deputy Aindrias Moynihan: I seek clarification on the implications for the health service. Often organisations, such as COPE and the hospice movement, who would be providing services to people would not be funded directly. I refer to the difference between the section 38 and section 39 organisations. Where do such organisations stand in relation to any changes coming down the line? They would have seen the cuts through the FEMPI and many of them have not felt any benefit from its unwinding. I ask to see whether the Minister is taking a leadership role in also providing for them in an unwinding of it.

Deputy Paschal Donohoe: This is exactly the point I was making earlier on at different points in these questions. It is that if one makes one move in one area, it always has consequences in other areas. The Taoiseach dealt with this matter in Leaders’ Questions during the week and both myself and the Minister, Deputy Harris, are engaged in this matter at present.

I understand that the organisations that are the subject of Deputy Aindrias Moynihan’s question have received significant additional funding of up to €120 million over the past number of years. As I have said, the Taoiseach has asked that myself and the Minister, Deputy Harris, examine the matter and that is what we are in the course of doing.