The Report of the Public Service Benchmarking Body is to be welcomed for its realism and common sense. It has accepted that pensions are an integral part of the overall remuneration of employees in both the public and private sectors. It has assessed that public service pensions are significantly more valuable than the pensions available to employees in the private sector, quantifying their superiority as equivalent to 12 per cent of salary.
When allowance is made for this, the report finds that, in general, and for similar work, public service salaries compare well with those in the private sector. It concludes that there are few grounds for awarding pay increases to public servants on the basis of comparability with the private sector. Of the 109 individual public service pay grades examined by the benchmarking body, it has recommended comparability pay awards in the case of just 15. The full costs amount to some €50 million a year or 0.3 per cent of overall public service pay costs.
The results of the current benchmarking exercise stand in stark contrast to those of its predecessor in 2002 which recommended average pay relativity awards of 8.9 per cent across the public service. Against this background, it is unsurprising that trade unions representing public service employees were disappointed by yesterday's benchmarking report. However, their principal objections do not appear to be well-grounded.
In the first place, the size of the premium imputed to public service pensions, at 12 per cent, has been deemed to be excessive. However, the Review Body on Higher Remuneration in the Public Sector, reporting last October, assigned an even higher premium of 15 per cent to account for the superior value of public service pensions without occasioning any visible dissent.
Second, the minimal pay awards made to rank-and-file public servants in yesterday's report have been contrasted adversely with the much larger awards made to top public sector managers and Government Ministers by the review body on higher remuneration last October. The review body recommended average comparability increases of 7.3 per cent for the holders of 1,600 top public sector jobs. But to criticise this disparity is to misunderstand the nature of pay comparability exercises. The objective of such exercises is to ensure that similar work commands similar pay in both the public and private sectors. However, in mirroring trends in private sector pay, comparability exercises necessarily reflect the growing pay gaps within the private sector itself.
In one area only is the report of the benchmarking body open to criticism. Nurses have received nothing. Last year, the nurses were advised from all quarters to take their claims to the benchmarking body where, they were told, they would receive a sympathetic hearing. Sympathy they may have received, but no substantive pay increases. It is important now that the Government signals that their claims will be incorporated into the negotiations on a new national pay agreement.