Pay and pensions - Report puts spotlight on public sector

THE Department of Finance’s analysis of pay and pensions from 2001 to 2006 has some startling findings, especially in the detail. The net cost of pay and pensions is projected to increase by 58.9% between 2001 and 2006.

The number of publicly funded service employees (excluding local authorities) was 257,023 on January 1, 2006, which was an increase of 38,760, or 17.8%, since 2001.

This was a sector on which the Government was supposed to cut back, but that has gone the way of so many other promises.

Pensions increased by 81.3%, as opposed to the overall pay bill, which increased by 56.8%. This may not have been as readily recognisable, because the pensions account for only 10% of the latest total, but that is up from 8.6% in 2001.

What is the explanation for the higher increase in this non-productive sector of society as opposed to those working? The figures are not annual increases, but raises stretched out over five years.

The extra increase in pensions may well be highly justifiable. The report only provides the details, not the real justifications for them.

The health sector accounts for 41% of the total pay and pensions, while the educational sector accounts for 32%, the Civil Service for 13%, and the security sector for 11%. Those four account for 97% of the public sector pay and pensions bill.

In addition to detailing the increase in Exchequer spending, a significant part of the report relates to a lack of progress in a number of areas. There is criticism of the insufficient transparency to support the benchmarking process. This was largely due to a fear that providing sufficient detail could violate confidentiality and thus lead to other difficulties.

The report also notes “slow progress” in relation to non-consultant doctors, working an average of 58 hours a week, while little progress was made in relation to pay claims by nurses, and complaints of a gender bias against women in the benchmarking process, according to the report.

Two of the teacher unions have called for the rejection of the latest national wage agreement, but they would seem likely to have difficulty explaining their position in relation to the figures produced in the report. The educational sector is expected to account for 32% of the pay and pensions bill in 2006, up from to 30% in 2001.

Pay in the educational sector has increased by 67% in those years.

This is well above the overall average. By comparison the other sectors have increased by 55%.

Initially, according to the report, there was not “sufficient transparency” to back up benchmarking recommendations.

It would seem that this transparency is still lacking and the teachers will have some explaining to do if they vote to reject the current national agreement.