Haddington Road Agreement 2013 - 2016 and Financial ... - TUI

HADDINGTON ROAD AGREEMENT 2013 - 20166EXECUTIVE SUMMARYIreland is committed to reducing its generalgovernment deficit – the gap between Governmentrevenues and spending, which must be financed byborrowing – to less than 3% by 2015.As the Public Service Pay and Pensions Billaccounts for 35% of spending, the Governmenthave decided that a proportionate contribution tothe necessary overall additional expenditurereduction required must come from this area.The Parties are agreed on the following series ofpay and productivity measures to be implementedin order to achieve the necessary €1 billion savingsin the cost of the pay and pensions bill over the 3years from 2013 to 2015.The Parties acknowledge the significant level ofreform that has taken place across the publicservice under the Public Service Agreement 2010-2014. However, they also agree that furthermeasures are required to underpin the delivery of amore integrated, efficient and effective publicservice. Under this Agreement further sustainablereform measures will be implemented in thefollowing areas:• Redeployment• Performance management• Flexible working arrangements• Work-sharing arrangements• Workforce restructuring.The Government reaffirms the commitment givenunder Paragraphs 1.6 and 1.15 of the PublicService Agreement in relation to pay rates ofpublic servants and compulsory redundancy,subject to the provisions set out in this Agreement.This Collective Agreement, subject to ratificationby the Parties, will apply for a period of 3 yearsfrom 1st July 2013. The pay and productivityprovisions set out in this Agreement will beimplemented with effect from 1st July 2013.1 INTRODUCTIONContext1.1 Since 2008, expenditure reducing andrevenue raising measures designed to saveapproximately €25 billion (around 16% of2011 GDP) have been implemented. Thesemeasures have been wide-ranging and havehad a significant impact on the livingstandards of all the citizens of the State,including public servants.1.2 Ireland is committed to reducing its generalgovernment deficit – the gap betweenGovernment revenues and spending, whichmust be financed by borrowing – to lessthan 3% by 2015. Given the volume ofborrowing required, the State’s debt-to-GDP ratio is set to rise further to over120% of GDP and the proportion ofrevenue that goes towards servicing thatdebt will also increase.1.3 The deficit for 2012 is estimated to be justunder 8% of GDP, or over €15 billion inExchequer terms. The Parties recognise thevery large challenge remaining, both interms of revenue streams and reducingpublic expenditure, to reduce that deficit tothe necessary sustainable level over theyears ahead.1.4 The Government’s Medium Term FiscalStatement indicates that, in addition to theoverall fiscal consolidation of €3.5 billionrequired for 2013, an additional €3.1 billionin savings and revenue-raising measuresmust be identified for 2014 and €2 billionin 2015.1.5 The scale of consolidation required canonly be achieved with a contribution fromall the main components of publicexpenditure. As the pay and pensions billaccounts for 35% of spending, aproportionate contribution to the necessaryoverall additional expenditure reductionrequired must come from this area. Thiswill involve a further reduction of some €1billion in the cost of the pay and pensionsbill over the 3 years from 2013 to 2015.These savings must be over and abovesavings already identified for the pay billthrough to 2015 and a substantial portion,some €300 million, must be delivered in2013.