The country’s highest-paid public servants, some earning €200,000 to €350,000, are underpaid by up to 30% and should no longer be subject to pay caps, according to a Department of Public Expenditure report.
In cash terms, were that cap to be bridged, it would mean pay rises of €60,000 to €105,000 for top secretaries-general and heads of semi-state bodies.
Decade-old pay caps limiting the salaries of 1,000 top civil and public servants “may no longer be appropriate” as they are leading to significant difficulties in filling positions, officials claim.
This is despite their department arguing restraint in this month’s budget and the failure to reduce taxes or increase welfare payments to the country’s least well off.
“The current policy for pay determination continues to be dictated by caps and limits imposed during the crisis,” the report states.
The significant upward pay pressure being applied and the recruitment difficulties that have been encountered at senior levels suggest that, given the effluxion [passage] of time, the caps and limits set during the crisis may no longer be appropriate.
The submission by Minister Paschal Donohoe’s top officials to the Public Service Pay Commission, seen by the Irish Examiner, argues the legacy of the caps and limits imposed during the financial crisis, the timing of the phased unwinding of pay reductions for senior public servants are combining to present challenges to recruitment and retention at senior levels in the public service.
The Department of Public Expenditure is headed by Robert Watt, who earns about €200,000 a year. In its submission, it complains that “growing complexity and public scrutiny of roles” is having an impact on the Government’s ability to attract top talent from the private sector.
Pay for CEOs of non-commercial State bodies are under increasing pressure and significant upward pay pressure is being applied as positions come to be filled, the report also states.
In 2011 the government introduced a general pay ceiling of €200,000 for future appointments to senior positions in the public service. Part of their demand for relaxation in the pay cap included references that prior to the economic downturn of the late 2000s, “performance-related awards” or bonuses had been a feature of certain senior-level remuneration in the public service.
In 2009, those performance-related payments were terminated in the case of civil service grades and for related groups across the public service.
However, they also referred to highly generous pension perks for secretaries-general who were entitled to “immediate payment of pension without actuarial reduction at the completion of term of appointment, the provision of up to 10 added years of service, and severance payment of six months’ pensionable remuneration”.
Such perks could be worth several hundreds of thousands of euro in some cases. In requesting a pay rise, the civil servants argue that there has been a significant drop when comparing the percentage of applications received from the private sector with the percentage of successful candidates provided by the private sector.
“This raises the concern that, as well a decline in the percentage of applications from outside the civil and public service in recent years, senior posts may not be attracting the right calibre of external applicants,” the officials claim.
The report highlights the recent appointments of Drew Harris as Garda commissioner and Paul Reid as chief executive of the HSE where “it was deemed necessary to revise the recruitment package significantly in order to attract the interest of suitably qualified candidates”.
A salary of €250,000 was agreed for Mr Harris in June while a salary of €350,000 was agreed for Mr Reid following the conclusion of the second recruitment campaign in April.