James Reilly said he would identify the grades of health workers with the worst sick leave and absentee rate

In an embarrassing U-turn, the Government is to abandon a plan -- announced in the Budget -- to cut €75m in allowances and premium payments to staff across the public sector, the Sunday Independent can reveal.

Brendan Howlin, the Minister for Public Expenditure and Reform, wrote -- in a memorandum to the Cabinet on Tuesday -- that the support of public sector unions to reduce by 5 per cent the €1.5bn paid in about 800 allowances and payments each year, could not be achieved.

Fine Gael ministers are understood to be annoyed that Labour is to cave into the public sector unions at a time when severe cuts to many frontline health services are to be implemented.

Health Minister Dr James Reilly, who on Friday described the pay issue as the "elephant in the room", was understood to be particularly incensed at Mr Howlin's announcement.

However, Dr Reilly will effectively be hung out to dry by the Cabinet, which is to remain committed to the Croke Park agreement to protect public sector pay and pensions until 2014.

A Fine Gael minister yesterday told the Sunday Independent: "I understand Minister Reilly's frustrations. It's very hard to reduce spending when you can't touch payroll. But we are committed to Croke Park until 2014."

analysis pages 4 24-27, 28, 38

In his memorandum, Mr Howlin said agreement had been reached with unions to the effect that allowances and payments -- many historical, and several which seem bizarre in nature -- will not be paid to new entrants or existing staff when promoted.

Among the more curious allowances is a payment of €1.71 per day for staff who eat lunch at their desk, an annual allowance of €1,783 for franking post and a paper keeper's allowance of €3,176 a year.

But the Government is to execute what amounts to a U-turn on an announcement by Mr Howlin in the Budget last year to achieve savings of €75m in allowances and premium payments across the public sector this year.

In last December's Budget, Mr Howlin said: "In 2012, public service bodies will have to achieve savings in respect of overtime of 10 per cent and in allowances and premium payments of 5 per cent.

"My department will lead a review of allowances and premium payments across the public service, in consultation with all government departments, in early 2012."

The unions have claimed that the allowances and payments make up their members' pay and are, therefore, protected under the Croke Park deal.

The disclosure today that the Government has scrapped the review will provoke outrage among many people expected to be seriously affected by the Health Service Executive (HSE) announcement on Thursday to slash spending by €130m.

The announced cuts to home help and services for high-dependency patients, in particular, have provoked a furious reaction from groups working with older people and the disabled.

It has also led to a barely concealed outbreak of hostilities between the coalition partners related to the Croke Park agreement, which protects pay in return for reforms in the public service, which Mr Howlin has said are not being fully embraced.

On Friday, Dr Reilly said the agreement had to be "expanded" to deal with the critical financial issues facing the health service.

He said that between 70-90 per cent of his budget went on pay, argued he could make no more savings in non-pay sectors and said public sector workers -- "some of the best-paid people in the State" -- should shoulder the burden.

However, Mr Howlin responded that Dr Reilly should cut the pay of hospital consultants.

An estimated 3,000 hospital consultants are paid about €200,000 a year by the State; a €25,000 -- or 12.5 per cent -- pay cut would also achieve an annual saving of €75m.

Had the Government, therefore, reached agreement to cut allowances and premium payments across the public sector, and had Dr Reilly honoured his pledge to reduce hospital consultants' pay, savings could have been achieved to avoid the cuts now planned by the HSE.

In opposition, the then FG health spokesman, Dr Reilly, said at the time: "I am saying very clearly that the days of people who think they can take €180,000 out of the State and another €300,000 from the VHI will be over under Fine Gael, because it's just not sustainable."

However, last October 8, Dr Reilly told the Irish Hospital Consultants' Association that they would be spared pay cuts.

While the Programme for Government provides for a reduction in consultants' pay, Dr Reilly is pushing for a deal of greater flexibilities.

But Labour protestations at the announced HSE cuts will now be seen against Mr Howlin's capitulation to public sector unions on his promise to achieve savings in a review of allowances and premium pay across the public sector.

A telephone poll for the Sunday Independent/Quantum Research today has found that more than three- quarters (78 per cent) said the Croke Park deal should be revisited in light of a slew of cuts, taxes and charges now proposed by the Government.

Among the public sector perks are:

• Department of Jobs and Enterprise: a higher duty allowance awarded for temporarily carrying out the duties of a higher grade: €6,111 to €8,097 a year.

• Department of Justice: a weekly switchboard allowance of €33.

• Department of Defence: Border duty allowance of €96.23 a week and €112 to an officer. An election gratuity allowance of €201 at election time, and an explosive ordnance duty allowance of €92 a day to those who qualify.

• Department of the Arts, Heritage and Gaeltacht: a 'tool' allowance of €844 a year and a shoe allowance of €60 a year.

Also, an allowance of €1.71 a day for eating lunch at your desk.

• Department of Agriculture: an allowance of €3,087 a year to meat inspectors to compensate for the smell in meat factories and bone meal plants.

• Department of the Taoiseach: clothing allowance of €444 a year for staff in the protocol section, and government press officers receive an 'on call' allowance of five hours' overtime at double time every week.

Also, in the same department, an allowance for franking post of €1,783 a year, and a paper keeper's allowance of €3,176 a year -- a 'historic payment' to the now defunct workers whose responsibilities had included filing, sorting post and record-keeping.

• Department of Transport: a railway safety commission on-call allowance of €4,074 a year.

• Department of Communications, and Department of Foreign Affairs: a keyholder allowance of €36 a week.

• Department of Environment: an eating on-site allowance of €988 a year where canteen facilities are not available.

• Department of Social Welfare: forklift allowance of €34.49 a week.

• Department of Finance: a seniority allowance, comprising one per cent of the salary paid to higher civil servants.

Sunday Independent