Employers’ cuts proposals spark storm
A freeze on wages in the public sector, reducing absenteeism and ending free prescription charges are some of the proposals put forward in a controversial report by business leaders yesterday on how to deliver spending cuts.
The Confederation of British Industry’s (CBI) report Time for Action calls for a radical shake-up of public services in Northern Ireland, which it describes as “employing too many people while delivering too little”.
Inevitably, the report led to business leaders clashing with trade unions, who claim the scale of the cuts would “wreck” the local Northern Ireland economy and lead to tens of thousands redundancies.
The report was compiled in anticipation of plans by Chancellor George Osborne to shave £2 billion off the Northern Ireland budget by 2014.
At a meeting in Belfast yesterday, Terence Brannigan, CBI Northern Ireland chairman, said there was a need to redress the “massive imbalance” between public and private sectors.
“We have too many structures, with too many layers, employing too many people, often rewarded too highly while delivering too little to the people who ultimately employ them — the citizens of Northern Ireland,” he said.
“Too often we appear reluctant to employ modern, cost-effective methods, systems and processes that would undoubtedly improve their efficiency.”
Mr Brannigan claimed businesses had already taken the hit by streamlining, cutting wages and developing more affordable pension provision over the past three years.
The report states some bold facts about Northern Ireland’s public sector which make a strong case for reform, including: public expenditure in Northern Ireland has almost doubled in the past decade — yet productivity fell; the average annual salary in the public sector is £25,000, compared to £18,000 in the private sector.
The report makes a wide range of suggestions to tackle spending. By reducing labour costs, including pay freezes, £340m could be saved annually. It calls for the reversal of “ a range of populist reductions in charges to the public”, like free prescriptions and transport for the over 60s.
The CBI chairman told the First Minister Peter Robinson that “no area should be untouched”.