Thursday, 9 February 2012
Dáil Éireann Debate
The Taoiseach told the Dáil earlier this week that next Tuesday the Cabinet would approve the setting up of transition teams to manage the retirement of thousands of public sector employees at the end of February. It is shambolic that the Government has left it until two weeks before the deadline to put these teams in place, despite having 12 months notice that this issue was coming down the track. Such is the lack of preparation for dealing with the fallout from the impending retirements that the Minister for Health is admitting that staff who are being incentivised to leave can and will, in some cases, be immediately rehired to fill gaps in the service. It is no excuse to say the final numbers leaving only became available last week. When the Government took office 11 months ago today it knew that thousands of public sector staff would be leaving at the end of February 2012. If we get through this process without essential public services being dangerously compromised, it will have been because of the flexibility and the commitment of public servants.
What reassurance can the Minister provide for the people about the state of critical front-line services, particularly in the health sector, at the end of February following the retirements? The Government has been noticeably reluctant to spell out the net savings that will be achieved in 2012. All we continue to hear is that by the end of 2015 the gross public sector pay bill will be €2.5 billion lower than in 2008. When our public expenditure spokesman, Deputy Sean Fleming, sought information on the financial numbers and the savings underpinning the retirements this year, he was told by the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, that the information was not available and that he should contact each Department for the information. That is a joke. I want the Minister to provide clarity on the net savings to be achieved. In particular, what will be the gross payroll savings arising from the retirements this year? What will be the net payroll savings, taking into account the extra pension costs that will be incurred and the revenue forgone by way of the income tax, PRSI and pension contributions and pension levy payments being made by these public servants and the fact that some of them will be rehired.
Minister for Social Protection (Deputy Joan Burton): I wish to be associated with the condolences offered by Deputy Michael McGrath to the deputy leader of Fianna Fáil, Deputy Éamon Ó Cuív, on the death of his mother, Emer Í Chuív.
This is a retirement scheme which, as I am sure the Deputy will recall, was arranged and introduced by the late Brian Lenihan, with a retirement date of February 2012. What it means in practice is the bringing forward of retirements which would have been due to take place this year and next year of staff close to retirement age. It is different from a special scheme. It merely allows people to take advantage of the additional pension income they will derive as a consequence of taking retirement earlier, as set out by the Deputy’s late colleague, Brian Lenihan, when Minister for Finance. Therefore, the Deputy’s mystification about it now is a little odd. Perhaps he did not understand it at the time and that is the reason he is now befuddled.
Deputy Joan Burton: ——of course we have been aware of this scheme, we inherited it from your good selves, and in every Department planning has gone ahead to deal with this transition and transformation, which is also a critical element of the changes which are taking place under the Croke Park agreement. The Taoiseach correctly has asked for this to be formalised by bringing it for discussion before the Cabinet not only last week and on previous occasions but on doing so again next week now we have finally established the numbers. I remind Deputy McGrath that in the arrangements his party left us there was no requirement for advance indication of people’s arrangements.
Deputy Joan Burton: ——that probably the most notable example of surprise was the notification one day of an option, which was perfectly exercisable by the individual concerned, as he was entitled to do under the arrangements and commitments the Deputy’s party in government made in the context of the broader Croke Park agreement and other arrangements with public servants, when we heard that the director of the Office of Corporate Enforcement would avail of the provision, as he was entitled to, after due consideration. As to why Deputy Michael McGrath would be concerned——
Deputy Michael McGrath: ——about what the savings will be arising from the retirements that will take place at the end of this month. She gave no answer to any of those questions. That pretty well sums up the way this Government has handled this issue over the last number of months. The fact is that there was no preparation——
Deputy Michael McGrath: ——no plans were put in place and with two weeks to go, the Government will consider formally establishing transition teams to manage an exodus of 7,000 to 8,000 public sector employees, which was known about 11 months ago today when the Minister came into office. That is the simple truth.
Deputy Michael McGrath: The very purpose of this scheme is to save money. I have asked the Minister again about this and we have asked the relevant Minister repeatedly about it but we have been unable to get basic financial information about the savings that will be achieved. What will be the gross savings on payroll in 2012? What will be the net savings, taking into account all the issues I mentioned, and how much will be paid in lump sums in 2012? Surely we are entitled to get that basic information.
Deputy Joan Burton: Let me say again in regard to the various Departments, as I think the Deputy will appreciate, this has been an ongoing matter of continuous discussion between individual Ministers and the Secretaries General of their Departments. I can speak for myself but I know I also speak for other Ministers.
Deputy Joan Burton: ——in our Department. Can I just explain? In the Department of Social Protection we have taken in 1,700 new staff under the transformation programme, the former community welfare officers and the former FÁS employment staff.
Deputy Joan Burton: I am giving Deputy Michael McGrath a serious answer to what I thought was a serious question. We are also losing somewhere in the region of 300 staff through advanced retirement. We have been engaged in continuous planning but what we did not know until last week, and I hope Deputy Michael McGrath will take this as an honest answer——
Deputy Joan Burton: ——what I as a Minister and what the other Ministers did not know — while we could anticipate what the numbers would be like — and generally speaking we monitor them weekly, was the exact number until last week.
Deputy Joan Burton: Deputy Michael McGrath asked for a full financial analysis. That is being done at the moment. We have the internal figures but the Deputy should remember, and this is why he cannot be given a complete answer now——
Deputy Joan Burton: ——is that some people have not proceeded with their retirement. While unfortunately I cannot be exact, Deputy Michael McGrath will appreciate that my powers are limited to forecasting——
Does the Minister recall that 12 months ago yesterday her colleague, the then Labour Party health spokesperson, Deputy Jan O’Sullivan, stated that in the first months of Government “we will lift the moratorium on replacement of front-line staff where beds or operating theatres are closed because of a shortage of nurses”? That was before the general election and what we are now seeing is nearly 4,000 health service workers leaving the service early before the end of this month and they will not be replaced, and 1,054 of those are nurses. We now have in excess of 2,000 public hospital beds closed. Is the Minister aware that the Psychiatric Nurses Association of Ireland, PNA, yesterday described the mental health services today as a complete shambles? Those are its words. A PNA survey has shown that up to 400 of its front-line service providers, psychiatric nurses, will be leaving by the end of this month over this tranche of early retirements. That represents 9% of the total complement of psychiatric nurses within the system.
I give the Minister just one example of the effect of cuts because it is important that we understand the impact. Even before the January-February exodus of staff, in the north County Dublin mental health services in the run up to Christmas 17 people sought admission as inpatients and every one of them was refused access. One of them has since tragically died as a result of suicide. When the general secretary of the Psychiatric Nurses Association states, as he did yesterday, that we are facing the horrendous prospect of leaving mentally vulnerable people without any services and that there will be a consequent increase in the suicide rate, not only do we need to take note of the alarm bells he is ringing, we also need to act.
Deputy Joan Burton: Although the final number of nurses availing of the scheme in the area of mental health and psychiatric care is not yet available, 436 mental health staff have indicated their intention to leave our mental health services by the end of February 2012. The HSE’s service plan includes a commitment to reduce acute inpatient capacity by a minimum of 153 beds nationally in 2012, in line with the recommendations of A Vision for Change. The Minister for Health, my colleague Deputy O’Reilly, and my colleague Deputy Lynch, who is the Minister of State dealing with this area, have been particularly commended by all of the organisations interested in this vital area of health for what is contained in terms of change, reform and progress in A Vision for Change. The document, as I am sure Deputy Ó Caoláin knows, includes a commitment to allocate €35 million for mental health in budget 2012, in line with the programme for Government. Within that, there is a commitment to involve an additional 400 people in mental health services.
I can understand that the loss or early retirement of 436 colleagues is a serious matter for the members of the PNA and their patients. However, A Vision for Change takes account of this. As I said to Deputy McGrath, we must bear in mind that the people who are availing of the end of February deal are by and large those who are close to retirement and are leaving somewhat earlier to avail of the existing pension package, which will fall dramatically after the end of February. In A Vision for Change, we are looking at transformation of mental health services. At a time of tight budgets, we are specifically providing a commitment of €35 million in budget 2012 for mental health services. There was recently a good debate in the Seanad with the Minister of State, Deputy Lynch, in which there was widespread agreement among all political parties and Independents that A Vision for Change was the route to take for positive development of mental health care.
Deputy Caoimhghín Ó Caoláin: Much of what the Minister said was very predictable, and the PNA, in its statement yesterday, forecast exactly that type of response. Will the Minister admit that preventative community and primary care services will be hit severely by these cuts, not only because of the departure of human resources but also because of the cuts in other resources? It makes nonsense of the HSE claims that services are being developed across these areas. That is not the case at all. The so-called €35 million that has been ring-fenced, allegedly, for the further implementation of A Vision for Change — which I absolutely support — is a myth by another name, because it is not new money. Let us get to the core of it and have it explained precisely. It will not even plug the gap, let alone enhance services.
I made the point last year — I did not think I would have to make it again, but it is even more applicable today because the situation has become even worse — that as a Deputy here for almost 15 years, I have never looked at the health service with such concern as I do today. I reflect the reality of the people who come to me, as a health spokesperson and as a Dáil Deputy, from across this State. We are facing a very serious situation. I ask the deputy leader of the Labour Party whether she accepts that the concern I have reflected is real and growing and that it is of itself having a negative effect on people’s health. Perhaps she does, perhaps she does not; but if she does not, she should, and if she does understand it, I ask her what she is doing about it. That is our question. The Labour Party appears to be voiceless in this regard, and it is high time its members played the part they heralded in advance of the general election, for which there has been no evidence over the 12 months since.
Deputy Joan Burton: I respect the Deputy’s long-standing interest in the issue of mental health. I went to school beside St. Brendan’s hospital and, like many Members of this House from all parties and none, I am concerned about utilising the limited resources we have in the best way possible for people with mental health difficulties. The €35 million is not imaginary money. It is in the budget for A Vision for Change, which is accepted and acknowledged by commentators — as I am sure the Deputy is aware——
Deputy Joan Burton: ——as a good document. There is a long history on the north side of Dublin, between St. Brendan’s and Portrane, of high standards of care and attention to patients, particularly by psychiatric nurses. I am very aware of that.
Deputy Joan Burton: As for what the Government is doing, apart from the commitment of €35 million, I am sure the Deputy is aware that a new mental health facility is being built in Beaumont at the moment. I am sure he is also aware that the Government has committed, in a tight capital programme, to correctly rebuild the Central Mental Hospital. I do not know why the Deputy should feel that the commitment of this Government, as detailed in the programme for Government, to prioritise mental health services is not being delivered on. However, it will take time to rebuild the Central Mental Hospital and to complete the building of the new facility in Beaumont. A special allocation of €20 million was made for primary care in the budget. The challenge for all health services, as in other Departments, is the significant number of staff who are resigning in advance of their expected time. This is challenging for managers but, as we all know, we have many managers in the HSE——
Deputy Joan Burton: ——and it is their job, and that of the Minister, to deal with this. In fairness to the Minister, if the Deputy was talking to his predecessor, she would not have answered any of his questions, because she did not take any responsibility.
However, I hope they are not saying the same things in the United States as they say here. They started off badly by making exaggerated claims about the economy here which will not have credibility overseas.
Last night, Deputy Eamon Gilmore, the leader of the Labour Party, claimed the fact that a very daring and audacious fund manager had put €2.5 billion into Irish bonds was a very positive sign. He ought to be careful in what he says. That particular fund is at the bottom of its peer group in terms of performance in the United States. It withdrew from the Irish Financial Services Centre, IFSC, three years ago and it is not a fund with which we would necessarily wish to be associated. It has also taken a massive punt on Hungary.
Second, I beg the Taoiseach not to promote the line he has been peddling on the bond markets in the United States again. Last week, he claimed in this House and elsewhere that the fact there had been a very small bond swap from one bond to another was a great victory for Ireland in the bond markets. What actually happened is that the National Treasury Management Agency, NTMA, twisted the arms of various Irish banks and forced them to take this swap. It was not a genuine move.
Deputy Shane Ross: Is the Minister aware of the fact that, contrary to what is being said by the Taoiseach and the Tánaiste, Dr. Michael Somers, who was the Government’s nominee to the board of Anglo Irish Bank and the head of the NTMA for 20 years, said this week that the bond markets will not tolerate Irish bonds at the designated time in the Government’s timetable and that we will need a second bailout? Mr. Colm McCarthy, who is the Government’s nominee to the board of the Dublin Airport Authority, DAA, this week, has also said Ireland will need a second bailout.
Deputy Joan Burton: I have great respect for the commentary and writings of Deputy Ross. I recall his commentary on many occasions, particularly coming up to Christmas and the new year, on luminaries of the Irish collapse. I believe Mr. Seán FitzPatrick was always his nominee to be Governor of the Central Bank or Minister for Finance.
The whizz kid bond trader who was featured in yesterday’s edition of The New York Times and funds a big mutual fund in America for wealthy Americans, Mr. Hasenstab, might yet feature in Deputy Ross’s list of people he admires, given that he picks losers and winners.
With regard to Ireland’s current position, we have regained a certain level of reputation. People in Ireland, be they private individuals or public servants, have made enormous sacrifices for this country, many of them deeply unpleasant and difficult for families, individuals and businesses. We are working our way out of that. The biggest difficulty, as the Deputy knows and writes about, is the current difficulties in the eurozone. When the agreement with the troika comes to an end, the Government will, as with all such agreements, seek an orderly exit from it. However, that depends on us being able to interact with the market.
The Deputy cited Dr. Michael Somers, a man with a very strong and independent mind. His successors in the current NTMA are also independent in the exercise of their functions. The Deputy says the recent bond sale is of no significance. Actually, as the Deputy knows well, progress in the markets is made up of small and significant steps, and the bond sale is one such step. The Taoiseach and the Tánaiste are perfectly right to cite that when speaking to an American business audience, as they are also right to tell Irish people here that it is a small but positive step. What if no one was buying our bonds?
Deputy Ross will recall that the new governor of the ECB has a policy of financial easing with regard to liquidity and banks. That was not only widely welcomed in the eurozone but was sought by countries such as the United States and by other international observers of the eurozone crisis. The small steps are positive. Would we like to have more steps? Absolutely. Are we pleased that Mr. Hasenstab has invested some of his funds in Ireland? On balance, that is a positive step. If no one was investing anything in Irish bonds, we would not have the basis for a slow but steady take-off. That is what we are hoping will happen and if it coincides with easement in the case of movements in the eurozone, that could be tremendously positive for this country.
Deputy Shane Ross: However, I cannot accept her statement that the NTMA is somehow an independent body. There is an advisory board for the NTMA. It might not do anything but there are political appointees on that board. They are appointed by the Minister.
Deputy Shane Ross: The chairman is Mr. David Byrne, who gets €50,000 per year. Along with him there is Mr. Kevin Cardiff, who might have just resigned, and Mr. Hugh Cooney, a Fianna Fáil fund-raiser. The idea that the NTMA is independent is utter nonsense. Does the Minister or anyone else in the House agree with the Taoiseach when he says, quite wrongly, that the growth rate this year will be 1.3%? Are we going to allow him to peddle that porkie in the United States when he is selling the Irish story?
Deputy Joan Burton: The most difficult issue Ireland has had to weather this year has been the crisis in the eurozone. Any changes relating to growth rates, as the Deputy knows, arise from the general fear that there might be a general recession in the eurozone. The introduction by the head of the ECB, Mr. Mario Draghi, of a form of additional liquidity directed particularly at banks to get credit moving again within the eurozone, enhance the reputation of the eurozone and restore confidence to the markets is welcome for Ireland. These measures will help our overall position, particularly if they are successful in inducing confidence in a market that has become deeply unstable and the velocity of which is beyond the tempo at which sovereign countries, or areas as large as the eurozone, operate. As a former broker, Deputy Shane Ross knows this better than I do.
What the Taoiseach is saying to an American audience, in working to attract investment and jobs to Ireland, is perfectly appropriate and I hope it will have the desired result. The context of the visit to the United States of the Taoiseach, the Tánaiste and the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, is that when the Global Irish Economic Forum took place some months ago, former President Clinton offered to host a forum on investing in Ireland for American investors in New York. Is Deputy McGrath suggesting the Taoiseach should give a negative message about the country after all the sacrifices made by everyone and after everything people in the country have suffered?
Deputy Joan Burton: Is the Deputy seriously suggesting that if the Taoiseach was to sit beside President Clinton today, he should talk down the country and its prospects of recovery? I do not accept this.
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