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€1bn pay rise bonanza for public sector

Public sector workers have received more than €1bn in incremental pay increases since Ireland's worst ever recession began in 2007, despite the dire state of the public finances.

Figures released by the Department of Finance show that although the country has had to borrow roughly €20bn a year to run the State since 2008, length-of-service pay increases have continued across all departments, agencies and organisations in the public sector.

The perception of a pay freeze and the pension levy hitting public sector workers stands in stark contrast to the reality of State employees in permanent, pensionable jobs. They are still seeing their gross salaries increase because the Government is allowing them to receive increased pay purely on the basis of time served.

Jim Power, chief economist with Friends First, said: "It's a disgrace -- given that the private sector has borne the brunt of the recession in terms of pay cuts and, more importantly, job losses -- that these top-up payments have continued. It's nuts when you see the meltdown in the public finances, and hopefully the new Government will deal with this issue. It shows clearly how the unions have been running this country for the past 10 years and still are."

The public sector pay bill in 2010 was €15.1bn, and new figures released last week showed that state employees earn one-third more than their private sector counterparts.

According to a new Central Statistics Office report on wages, weekly earnings in the public sector rose from a three-year low of €882 a week in the first quarter of 2010 to €913 in the final quarter. In contrast, in the final quarter of 2010, weekly earnings in the private sector were almost a third lower at €625.

Ireland's public sector pay structure is substantially higher than most other European countries and, on average, one-third higher than public sector workers in Britain. Latest comparable figures show that average British public service weekly earnings were €634 compared with the €913 paid to State employees here.

Some civil servants at the top of their respective pay scales are getting wage rises of €2,400 for long service. The previous government shied away from further angering public sector workers already reeling from pension and income levy increases.

A sample survey across a range of departments shows an average payout of €2,345 for the civil servants entitled to the long-service payments. The pay scales in the public sector see most workers go up the scale each year, meaning their gross salary increases on an annual basis.

Former Finance Minister Brian Lenihan repeatedly refused to impose a freeze on such incremental payments, on the grounds that it would impact on lower grade workers unfairly.

A spokesman from the Department of Finance explained: "Suspending increments would have an uneven impact and would disproportionately affect lower-paid staff. Higher-paid public service grades have, in general, significantly shorter incremental scales than lower-paid staff and, consequently, more of them are at the maximum of scales. Some higher-paid grades do not have incremental scales at all and their salaries are single points."

It must also be remembered that cuts of up to 14 per cent have been inflicted upon public sector workers, the spokesman added.

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Before entering office, several Fine Gael ministers. including Leo Varadkar and Richard Bruton, called on the incremental pay increases to be frozen as long as the country remains in recession. A Fine Gael source said last night that the views of the party had not changed.

Given the arrival of the IMF last November and the change of government, new Public Expenditure and Reform Minister Brendan Howlin is set to come under significant pressure to end the practice as part of any reform process.

The Department of Finance confirmed €250m was spent on salary increments in the public sector last year.

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