The McCarthy proposals will break the 18-year social contract with disadvantaged communities. The Government has not, as yet, endorsed the proposals in the McCarthy Report (Bord Snip Nua) for radical cuts across all areas of social spending.

Given the composition and "secretariat" of the group that produced the McCarthy Report, it can be seen as the wish list of the Department of Finance.  But, as The Irish Times commented, the report "presents a menu of financial options to Government without any reference to the social policy of the state" (Editorial, 17th July). And that is the core issue.

Current social spending by the state not only on social welfare but on a wide range of programmes that target resources to the most disadvantaged urban and rural communities, is one of the major elements of the social contract developed through social partnership since 1991.

In that year, and following campaigns by community organisations and the insistence of Congress, the Partnership for Economic and Social Progress (PESP) committed for the first time to invest in disadvantaged communities. That commitment has been maintained in each successive agreement since. If the recommendations of the McCarthy Report regarding this spending were taken on board, this would represent a breach of that 18-year-old social contract.

Its proposals, if implemented, would cut welfare, reduce basic services and close down large numbers of programmes currently operating almost solely in disadvantaged areas. From the social policy point of view this would represent regression on a major scale and fundamentally break the social contract that has been in place for nearly twenty years between the state and the most disadvantaged communities in Irish society.

Many of these programmes - e.g. CDP, LDSIP, RAPID/CLÁR etc. - may need re-thinking, restructuring, 'streamlining' or whatever. But for all their faults, taken together they represent a significant redistribution of resources to disadvantaged communities. In a breathtaking judgement, however, An Bord Snip found that "there is little evidence of positive outcomes for these initiatives."

An Bord Snip was selective in its approach, and there were many sacred cows it left untouched (salaries of high public officials and the judiciary, hospital consultants - paid three times the rate of their French and German counterparts, and so forth). It ruled out increased taxation as undesirable, although it was not mandated to comment on that.

As the most weakly funded local projects were scrutinized for "waste", not a single road project or prison plan was questioned. Quite the contrary: the prison building programme "should proceed in a cost-efficient manner as soon as possible." As one commentator noted, more prison space will certainly be required if the proposals of the McCarthy report are implemented!

An Bord Snip in fact simply tore up the mandate given to it and wrote its own one instead. The Minister's instructions were to "review the scope for reducing or discontinuing Expenditure Programmes with a view to eliminating the current budget deficit by 2011". This was to be achieved through proposals "rationalising and streamlining delivery of public services in the consumers' interest."

But the Group decided to invent its own one instead. Its 'Basis of Evaluation', it tells us, involves "raising basic questions such as the necessity for provision of the service, and the reasons why public service provision might be warranted, rather than allowing the private sector to provide the service..."  Grant programmes were examined from a point of view again of whether there was any need for the subsidies in the first place. Surely this was also something the Group was simply not mandated to do.

The Government has both owned and disowned the McCarthy report. It published it six months ahead of the budget and made it clear that it regards its recommendations as proposals only, as "part of the solution."  It is clear that it is meant to mesh with other civil service plans, especially the 2008 OECD report on public service reform, Towards an Integrated Public Service, though also the Report of the Commission on Taxation and the report of the Review Group on higher public sector salaries.

Taoiseach Brian Cowen has at least defended the investment that has been made in social spending during the decades of social partnership: "Every recession provides the opportunity for a restructuring of our economy and that is what we have to do today".

Furthermore, the boom years had created considerable wealth which had been invested in physical and social infrastructure: "We have seen a lot of improvements, and quite rightly so, in a whole range of social policy areas down the years. . . I think all of us have to avoid any knee-jerk reaction to the report and just recognise that the quicker we get our public finances in order, as we know from recent economic history [i.e. the 1980s - Ed.], the quicker we can put ourselves in a position to get back to growth and jobs again." (The Irish Times, 18 July).

Breaking the social contract that has been in place for nearly twenty years between the state and most disadvantaged communities in Irish society cannot be the starting point.

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