Pay caps for top public service jobs must be addressed – department

Pay caps and limits set for about 1,000 top-level public service posts during the financial crisis may no longer be appropriate, the Department of Public Expenditure has suggested.

In a submission to the Public Service Pay Commission, the department said "without an objective mechanism for pay determination at these levels, it will become more and more difficult to effectively manage senior leadership remuneration and provide an adequate remuneration package to attract and retain top talent".

In a report published on Tuesday the commission said the Government should consider re-establishing a special review body to examine pay for top-level executive staff in State organisations.

In its full submission, which has now been published, the department said there was evidence to suggest that “a number of factors, including the legacy of the caps and limits imposed during the financial crisis, the timing of the phased unwinding of (financial emergency) Fempi [Financial Emergency Measures in the Public Interest] pay reductions for senior public servants, growing complexity and public scrutiny of roles, and an emerging pay deficit with the private sector, are combining to present challenges to recruitment and retention at senior levels in the public service”.

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Upward pressure

The department said in recent campaigns to fill the posts of Garda Commissioner and the chief executive of the HSE it had been necessary to revise the recruitment package significantly to attract the interest of suitably qualified candidates. It said ultimately a salary of €250,000 was agreed for the Garda Commissioner role and €350,000 for the head of the HSE.

“Pay for [chief executives] of non-commercial State bodies are under increasing pressure and significant upward pay pressure is being applied as positions come to be filled. In addition to the challenges faced in recruitment there has also been a noticeable increase in the number of post holders (or their boards/organisations) seeking improved/revised terms or regrading during their tenure, or at time of reappointment, in response to a perceived inadequacy in the pay offering.

“In order to address this, revised salaries for certain senior posts are effectively being arrived at on an individual basis without a robust underlying and credible sizing exercise, except a sense that a higher salary is required to attract more candidates.”

Reduced salaries

The department said that between 2009 and 2013 five piece of financial emergency legislation were introduced that included measures to reduce basic salaries and allowances. It said the Government also put in place reduced salaries for newly appointed staff at top levels in the civil service as well as the regrading downwards of senior posts in the public service and in non-commercial State bodies.

It said in 2011 a general pay ceiling of €200,000 was introduced for future appointments to senior positions across the public service while performance bonuses were also terminated.

It also maintained that reduced pension terms were also put in place for senior public service personnel.

The department said that although full pay restoration for all public service personnel earning up to €70,000 would be in place by October 2020, for many in senior roles this process would not be completed until July 2022.

The department in its submission said in the current environment, pay levels for those in senior posts would “continue to be managed in an individualised way”.

“Without an objective mechanism for pay determination at these levels, the issues encountered with senior leadership remuneration will become increasingly difficult to manage effectively.