Pay hikes recommended for ministers were ‘unjustified’

MASSIVE pay increases for the Taoiseach, ministers and senior civil servants recommended in Government-commissioned reports were unjustified, a leading economic think-tank has found.

In 2007 and 2008, the Government-appointed Review Body on Higher Remuneration in the Public Sector published reports recommending increases for an array of senior state employees, including cabinet members, judges and secretaries-general of departments.

But the Economic and Social Research Institute (ESRI) yesterday published a detailed analysis of public sector pay in 2006 and found it had already been high enough when the review body made its recommendations.

For that reason, the ESRI said it could provide “no support” for the review body’s findings – effectively saying there had been no justification for the recommended pay increases.

As it happened, the recommendations proved hugely controversial, and the Government was forced to scrap plans to grant the increases.

The ESRI said it could also not support pay increases recommended by a separate Government-appointed expert group, the Public Service Benchmarking Body, in 2007.

While the review body examined salaries at the higher levels of the public service, the benchmarking body looked at the middle and lower grades, and it too recommended increases in a number of areas.

But the ESRI found that by 2006 – prior to the recommendations of both bodies – public servants were already earning far more than their private sector counterparts.

In 2002, public sector workers had been earning 9.7% more than private sector workers, but by 2006, the difference had risen to 21.6%.

When the value of public sector pensions was factored into the equation, the gap widened to almost 25%.

However, the ESRI stressed that as the findings related to 2006, they did not take into account the public service pension levy which took effect from March this year, and which effectively cut public-sector pay by an average of 7.5%.

Speaking following publication of the ESRI report, Taoiseach Brian Cowen refused to rule out a cut in public sector pay in the December budget.

But trade unions representing public sector workers rubbished the ESRI analysis and threatened strikes if the Government attempted a pay cut.


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