Benchmarking was a mistake, admits Harney
Published 20/11/2010 | 05:00
HEALTH Minister Mary Harney admitted yesterday that the Government regrets the expensive benchmarking system that gave big pay rises to public servants and politicians.
A decade after the system was set up, she belatedly said it would have been better to have pegged their wages with public servants abroad rather than private sector earnings.
She was speaking as speculation mounted that IMF and EU officials would demand deep cuts in the €19bn public sector payroll.
The minister was quizzed on government decisions taken in recent years that may have contributed to the country's dire financial predicament.
"There may be areas we would have done differently in hindsight," she said.
"Should we have had a benchmarking exercise, benchmarking public sector pay against private sector pay?
"Perhaps we should have benchmarked public sector pay against public sector pay in other countries, for example."
However, she added: "There is no point in going forward in a blame game. The last thing we need now is to take our eye off the ball."
She insisted that the decisions taken by the Government in the past two years have been "saluted" internationally.
Despite the last Budget's pay cut, the latest Central Statistics Office figures show average public sector wages far outstrip the private sector, by €290 a week.
The Irish Business and Employers' Confederation (IBEC) said public sector pay was much higher than the pay of state employees in the eurozone.
The employers' body said the ECB found average public sector pay increased by 67pc between 1999 and 2006 in the Republic, whereas in the euro area it grew by just 22pc.
The Public Service Benchmarking Body, set up in 2000, gave awards averaging 9pc to public servants, pensioners and politicians, at an annual cost of €1.2bn.
The last benchmarking exercise in 2008 did not recommend widespread increases.
It awarded pay rises -- from 1pc to 15pc -- to just 15 out of 109 grades, at a cost of €50m a year.
This is not the first time the benchmarking system has come under fire. It was famously described by former general secretary of the Irish National Teachers' Organisation, Joe O'Toole, as an "ATM machine" for the public sector.
Bord Snip chairman Colm McCarthy last year called for a new benchmarking report that could recommend pay cuts.