Correct public pay policy dies on partnership altar

BUSINESS/Opinion: Evidence that the public sector benchmarking process is a multibillion euro sham is coming thick and fast, writes John McManus.

Last week saw the publication of data on vacancies in both the public and private sector which all but demolish the myth that the civil service finds it harder to recruit and retain staff because of wage differentials.

This canard is at the very centre of the argument that civil service wages should be benchmarked to the private sector. This is currently being done at a cost of at least €1.5 billion. Some economists estimate that the whole business could actually cost more than €3 billion, which is a hefty price to pay to keep the public sector unions onside for the current national wage deal, Sustaining Progress.

The proximate justification for the benchmarking payments is the Report of the Public Service Benchmarking Body published last June. Long on rhetoric but short on facts, it recommends pay increases averaging 8.9 per cent for public sector workers in order to deal with a number of alleged problems such as the recruitment and retention of staff in the public sector. However, it contains no figures to support its conclusions.

Compare this with the facts as we now have them courtesy of the vacancy survey carried out by the Expert Group on Future Skills Needs. It found that vacancy levels in the public sector were 4 per cent compared to 3 per cent in the private sector. Significantly, vacancies in the civil service proper and education - supposedly the most hard-pressed parts of the public service - were 3 per cent.

Even more interesting is that areas of the public sector were vacancies are highest are not the areas in which the benchmarking review body recommended the highest increases.

Areas such as the Garda, engineering professionals and technicians which were identified as having vacancy levels in excess of 4 per cent, received increments of less than the 8.9 per cent awarded on average by the benchmarking body.

The findings of the Expert Group on Future Skills Needs go a long way toward explaining why the Benchmarking Body has refused to make public any of the research on which it based its recommendations. It has long been suspected that the reason is because the empirical data it collected does not support its conclusions. Last week's reports on vacancies certainly lends credence to this view.

The report also knocks a pretty significant hole in the reason given by the body for not releasing the data and having itself exempted from the Freedom of Information Act. The argument that information was provided to it in confidence seems a bit hollow given that the Expert Group on Future Skills Needs seems to have acquired and published the same data without any great problem.

It would be tempting to think that all this dissembling does not really matter because the black hole at the heart of the benchmarking body's conclusions will eventually be exposed as information enters the public domain through other avenues.

This would be true, of course, if the Benchmarking Body's report was merely some piece of dodgy academic work. Unfortunately it is not. It is the basis on which the Government is spending at least €1.5 billion of taxpayers money at a time of very scarce resources.

The real tragedy of course is that benchmarking will probably be heralded as a runaway success when in fact it solved what is probably a non-existent problem that - if it did exist - would have taken care of itself. Assume for moment - contrary to the evidence of the Expert Group vacancy reports - that there actually is a problem with recruitment and retention in the public service. Any such problem is likely to rapidly improve of its own accord in the current economic climate, but that will not stop the proponents of benchmarking claiming the credit.

The whole thing has rather disconcerting parallels to the thorny issue of assessing the real value of the national wage agreements. The Programme for National Recovery and its assessors have been given a disproportionate degree of credit for the improvement in Ireland's economic fortunes over the last decade. Several other - mostly extraneous - factors such as the devaluation of the pound played as important if not a more important role.

It is no surprise then to find that the people who brought you partnership culture crop up all over the benchmarking body. Its members include Mr Billy Attley a former general secretary of SIPTU and Mr John Dunne, the previous director general of IBEC. Also in its ranks are Mr Phil Flynn, the former president of ICTU and Mr Paddy Mularkey who in his previous life was the Secretary General of the Department of Finance.

These are the grandfathers of partnership, steeped in its culture and hubris. They are high priests of the cult of the national wage deal, which holds the partnership agreements to be the godhead of our economic revival.

It is now looks like they believe partnership is so important that, in order to ensure the continued participation of the public sector unions, they will recommend pay rises that are not deserved and which the taxpayer cannot afford.