Benchmarking body's figures don't add up

Business Opinion: Here is a funny thing. The Government has just agreed to spend an extra €1 billion a year of tax-payer's money following the advice of six individuals, only one of whom could be said to work for the State.

The individuals have refused to discuss their recommendation and even more surprisingly they have also declined to make public the research on which they based their decision to propose an 8.7 per cent increase in the public sector pay bill. Despite this the Government has moved to rubber stamp the recommendations with an alacrity rarely seen in the corridors of power.

The five individuals in question are the Hon Mr Justice John Quirke, Judge of the High Court; Mr Billy Attley (former general secretary of SIPTU); Mr John Dunne (the former director general of IBEC); Mr Phil Flynn (former president of ICTU); Ms Maureen Lynott (a management consultant) and Mr Paddy Mullarkey (the former secretary general of the Department of Finance). They are otherwise known as the Public Service Benchmarking Body which last Monday published the results of a two-year study of public sector pay.

Put simply, the body was supposed to make recommendations that would bring public sector pay rates in line with those in the private sector, allowing for factors such as the job security and attractive pensions that go with working in the public sector.

The body's terms of reference said its recommendations "should be grounded in a coherent and broadly based comparison with jobs and pay rates across the country". To do this the body was required to conduct "in-depth and comprehensive research, examination and analysis of pay levels across the private sector".

The body has now finished its work and made its recommendations. What it has not done is publish or make easily available the in-depth and comprehensive research on which the recommendations are based. In the normal way you would expect such information to be made available, unless, of course, it does not support the conclusions!

It is worth noting that this information is not being made available to anyone, including the Government and the unions. The Government however does not seem too concerned and is happy to spend €1 billion a year on foot of research it has never seen.

Equally curious is the Government's decision to exempt the body from the Freedom of Information Act, albeit by default. In the two years that the body was in existence, the list of organisations that are covered by the act was extended five times, but the benchmarking body was not included. Although the body continues in existence there are no plans to bring it under the scope of the act. As a result, the most useful tool available to citizens trying to prise information out of the State has been denied to them.

There is another reason to suspect that the outcome of the benchmarking report is something of a ready-up. At Budget time last December, the Minister for Finance let it be known that he had allowed €150 million in his figures to cover implementing the first instalment due under benchmarking, which is backdated to the start of this year.

Funnily enough, the net cost to the Government of paying the first instalment of the pay increases recommended last week is €150 million. The gross cost is €250 million, but roughly one-third of this will flow back to the Exchequer in the form of tax.

The Government must be extremely pleased with this happy coincidence and also the body's decision to recommend that payment of the remaining three quarters of the awards be linked to "adaptability, change, flexibility and modernisation" in the public sector.

It would be interesting to ask the body - if it was taking questions - whether this implied that only 25 per cent of the awards could be justified on the basis of bringing public sector wages into line with the private sector.

Why would the benchmarking body made recommendations that are not supported by the extensive research they commissioned?

The answer lies in the first line of the first paragraph of the first chapter of their report. It reads: "The Public Service Benchmarking Body (the Body) was established under the terms of the Programme for Prosperity and Fairness".

The benchmarking body was above all else a creature of social partnership, the faustian pact that was struck between employers, unions and the Government in the 1980s. The partnership approach and the "real politik" that underlay it takes much of the credit for the reversal of the country's economic fortunes. Not surprisingly the people who forged it became very powerful and influential figures. Among them were Billy Attley, John Dunne, Phil Flynn and Paddy Mullarkey.

As successive agreements were forged over the last 15 years, it became apparent that there was a real meeting of minds among these individuals and the other big players in the process, including the now Taoiseach, Bertie Ahern.

In fact the more jaundiced observers were increasingly of the view that the negotiations on successive partnership agreements were choreographed to arrive at an outcome that has already been determined by the big players.

One can't help feeling that something similar went on in the benchmarking process. It smells very like a massive compromise was reached between the pent up demands of the public sector workers and the reality that they are not actually that badly paid compared to their counterparts in the private sector.

The members of the body may have felt themselves imbued with a higher purpose: the survival of the partnership process that is integral to our economic success. They would also appear to have the tacit support of Government.

If this is the case, then the fact that the basic research may not have supported such a compromise was not really all that important.

But it looks like we will never know if this is the case or not.