Public service pay warning

Minister for Finance Brian Cowen gave a warning on public service pay during the debate on the annual estimates. He said the taxpayer was entitled to full value for money in respect of a very significant outlay.

"Accordingly, payment of the pay increases, under Towards 2016, will be dependent, in the case of each sector, organisation and grade, on independent verification of co-operation with flexibility and ongoing change, including co-operation with satisfactory implementation of the agenda for modernisation set out in the agreement." Mr Cowen said that the gross provision to fund public service pay and pensions next year was some €18 billion, an increase of €1.2 billion or 7 per cent.

The pay terms of the Towards 2016 social partnership agreement accounted for just over €740 million of that. Mr Cowen said that next year's pay and pensions bills of €18 billion was a very significant commitment of resources. Some €14.9 billion, or 83 per cent, related to frontline services in health, education and security.

"The Government has permitted increases in the number of staff in these areas in recent years, and I make no apology for this. The fact of the matter is these are labour intensive services and, if we wish to get maximum benefit from enhanced capital expenditure in the areas of health and education, we must adequately staff the resultant new or enhanced facilities."