Salary rises for top public servants may be deferred

Minister for Public Expenditure Michael McGrath to run rule over top-level pay

Planned pay increases for the most senior public servants in July of this year, which would reverse cuts made during the financial crisis more than a decade ago, could be deferred or cancelled under plans by the Minister for Public Expenditure Michael McGrath to review top-level pay in the public service.

Mr McGrath indicated on Wednesday at the Oireachtas finance committee that he intended to establish an independent review group to examine the process for appointing top public servants and their salaries.

It is understood that as well as looking at how posts are filled, the new group will examine how more private sector applicants can be attracted to senior roles in the civil and public service.

Sources say the process is likely to have implications for the final “restoration” of the austerity era cuts for top earners in the civil and public service, due on July 1st. Under the Public Service Pay and Pensions Act 2017, those earning more than €150,000 are due the final phase of restoration on that date. The increases in salary due then are understood to be between 10-15 per cent, sources say, a measure that people in Government fear could lead to a public outcry.

Sources said the Minister would examine “options he has to adopt a revised approach to this issue” – though it remains for now a legal obligation. Other public servants have already seen their salaries restored to pre-austerity levels.

Robert Watt’s €300,000 salary

Separately it has emerged that senior civil servant Robert Watt’s salary is on course to top €300,000 in October when the last increase in the current public sector pay deal kicks in. The public sector pay deal increase is separate to the July financial crisis cuts reversal which does not apply to Mr Watt.

There has been controversy over the €81,000 pay rise Mr Watt received when he was appointed as the secretary general of the Department of Health on a permanent basis in April last year.

Oireachtas finance committee chairman John McGuinness– who has been highly critical of the initial €81,000 pay increase for Mr Watt – has said he should not get further increases.

However, during an appearance at the committee on Mr McGrath said that further increases are part of the wider public sector pay deal and that excluding an individual is not the way collective agreements are done.

Mr McGuinness’s committee, along with the Public Accounts Committee, examined the issue of senior public sector executives’ pay following questions concerning the process involved in Mr Watt’s appointment to the Department of Health post on an interim basis in January 2021 pending an open competition for the permanent role.

The committees’ report found that the interim appointment and salary increase were arranged in an “ad hoc fashion following discussions among a small number of senior officials and members of the Government”.

Mr McGrath said on Wednesday that he has considered the report and his intention is to propose the establishment of an independent, external review panel to strengthen the recruitment process for senior public service posts including making recommendations on the process of determining terms and conditions for such posts.

Mr Watt said last April that he would waive the €81,000 increase “until the economy begins to recover and unemployment falls”.

It was confirmed last week that he was taking the full salary which at that point stood at €294,920 – including a civil service pay increase that kicked in last October. The department did not say when Mr Watt stopped waiving the increase.

Minister for Health Stephen Donnelly has since confirmed to Social Democrats co-leader Catherine Murphy that Mr Watt’s pay rose to €297,869 as of Tuesday under the Building Momentum public sector pay deal.

Mr McGrath confirmed another 1 per cent increase is due for civil servants from October 1st. Mr Watt’s salary is set to top the €300,000 mark at that point.