Benchmarking Report Creates Huge Challenge for Pay Talks
10 Jan 2008
Today's report of the Public Service Benchmarking Body (PSBB) is a lengthy and detailed document, which will require careful study over the coming days and weeks. However, the first reaction of most public servants will be disappointment and many will inevitably be angry.Even on an initial reading of the report it is clear that its conclusion, that most public servants should receive zero, has been shaped by two PSBB decisions: one to change its methodology from that used in the first exercise and, two, to impose a much higher premium on pensions than was used in the first exercise.
The ICTU Public Services Committee accepts that any increases recommended by the PSBB must be supported by the evidence in its surveys of public and private sector pay and benefits. However, it is inevitable that public servants will conclude that the PSBB's decision to change its approach was influenced by relentless criticism of the first report and of the benchmarking process itself. This despite the fact that one of the main criticisms, the myth that public servants earn 40 percent more than private sector workers, is utterly dismissed by the PSBB report itself.The PSBB acknowledged that its change of methodology is "open to criticism" yet it gives no reason for the change. Many will conclude that the change was simply designed to minimise the pay awards.
Pensions
It is clearly unfair that the thousands of public servants on low and middle incomes have had their pensions valued at 12 percent of salary, almost the same as those on six figure salaries whose pensions were valued at 15 percent. A departmental secretary general, who will retire on a pension of €150,000 a year, may see this as fair. A low paid special needs assistant with little job security or pension expectations will not.
Implications for pay talks
The Public Services Committee believes that the report presents the Government and employers with a huge challenge going into next month's pay talks, which are now the only mechanism available to protect living standards for all workers - public and private - against a backdrop of higher than expected inflation. Unions, public and private, will be more united than ever on pay, the growing gap between top managers and ordinary workers, and issues like the exploitation of agency workers. The benchmarking report covers some 300,000 workers - or a sixth of the total workforce - most of whom have traditionally been supporters of national agreements. The forthcoming pay talks will now have to deliver pay increases significantly above inflation. The Government and employers should be under no illusion. Failure to produce an acceptable deal will create a very real risk of rejection by the workers that have hitherto been the bedrock of social partnership.
Public service modernisation
The benchmarking report also presents the Government with a challenge over the future of public service modernisation. Since benchmarking was established, pay policy has been the main driver of change in public service working practices and working conditions. (This is also true of the private sector where big changes in banking, finance, aviation and other sectors have been oiled by pay settlements above those set out in national agreements). The Public Services Committee welcomes the PSBB's acknowledgement that there have been significant advances in public service modernisation. The public still expects and deserves better services, but the Government will have to rethink its entire approach to public service modernisation in the aftermath of today's report.