An extension to a deal where civil servants take a day off a month unpaid is set to be an uphill struggle for Government, a union insider warned yesterday.

Ministers and the unions are to sit down next month to negotiate a new package in a bid to cut the cost of Government following last year’s agreement to cut a day a month — effectively a 4.6 percent pay cut. But the insider said: “The unions caught so much backlash for the last time — it will be very interesting to see how it will go.

“An extension is something that means members will have to go for another year and they are struggling already.”

The insider added: “If prices increase, they will be losing more. That is something that will be very tough to get through.” Public sector workers and Government signed the two-year deal last year, which was expected to save at least $21 million a year to cut the massive near $2 billion deficit.

The package — due to expire in March next year — also included incentives for early retirement, a wage freeze until 2015 and the setting up of a committee with representatives from Government, the unions and employers. BPSU president Jason Hayward said unions recognised Government would be “looking to recoup additional cost savings in future years” — but declined to speculate what might be on the table.

He added: “We agreed to certain conditions based on shared sacrifice — we don’t think there’s been much shared sacrifice and we have to look at what’s in our best interests.

“At this point, I don’t have a feeling until I speak to my members and find out what they feel to be reasonable.”

And he said that the union would look for more “creative solutions” to help solve the national financial crisis.

Mr Hayward added: “In Bermuda, and around the world, cuts haven’t helped the general position — perhaps they should try spending as a stimulus.”

And Mr Hayward said: “Based on the feedback I have received thus far, furlough days are hurting our members — if we can discuss alternatives to furloughs, that’s what we will do.”

Mr Hayward added it was up to Minister of Finance Bob Richards to prove Government finances were still “in such a dire state” that more austerity measures were needed.

And he said: “I believe we need a more creative solution than that which we’ve had in the last two years.”

Mr Richards last night declined to comment in advance of the start of negotiations — but signalled that Government was set on continued savings in public expenditure in a bid to cut debt.

But he said: “It will be challenging. The only guide I can give is our medium term expenditure plan we put forward in the Budget.

“It calls for a seven percent reduction in Government expenditures for the financial year we are in now, a further five percent next year and a further three percent the year after that.”

And he added: “These are the parameters in which we have to find agreement.”