Written Answers. - Public Sector Pay.

Michael McDowell

Question:

50 Mr. M. McDowell asked the Minister for Finance the gross rise in the public sector wage bill for 1995; the prospects for 1996 in respect of public pay; and the relative increases in public sector pay and inflation in each of the years from 1993 to 1995. [17885/95]

I will provide the Deputy with details in respect of the Exchequer pay and pensions bill which covers the pay and pensions of the Civil Service, the Garda, the Defence Forces, teachers and the pay and pensions elements of grants to the health boards and other health agencies, non-commercial State bodies and third-level colleges.

The total Exchequer pay and pensions bill figure contained in the revised Estimates volume for 1995 is £4,619 million. This represents an increase of 6.1 per cent on the 1994 outturn of £4,355 million. The reasons for this increase can be broken down as follows: pay increases under the Programme for Competitiveness and Work, 1.75 per cent; structural drift, 0.8 per cent; service improvements 3.5 per cent.

The service improvements referred to include the costs of increased numbers of staff in the education sector, the health services, including acute hospital and childcare services, the Department of Social Welfare and the Office of the Revenue Commissioners. Structural drift includes the cost of increments.

The prospect for 1996 on public service pay is that the general round increases of 1.5 per cent from 1 June 1996 and 1.5 per cent from 1 October 1996 will have to be provided for. These increases, as well as the carryover cost of the 2 per cent increase from 1 June 1995 will add, on an annualised basis, an additional 2.1 per cent to the Exchequer pay and pensions bill in 1996. Discussions with a wide range of staff throughout the public service under the local bargaining clause of the public service annex to the Programme for Competitiveness and Work pay agreement are continuing. At this stage it is not clear what form of agreements will emerge but in any event the cost will have to be within the parameters set out in the Programme for Competitiveness and Work, in the order of 3 per cent during the period of the agreement.

As regards public service numbers, the Deputy will be aware that the Government decided in July 1995 on a restrictive policy on recruitment to all the main areas of public service employment up to 1997. This policy will result in significant savings to the Exchequer pay and pensions bill in 1996 and 1997. Further consideration is being given to the staffing requirements in the main public service areas as part of the normal annual Estimates process.
As regards relative increases in public service pay and inflation from 1993 to 1995, the following is the position.

Year

Total Increase in Exchequer pay and pensions bill

Increase due to pay increases

Inflation (Annual CPI)

%

%

%

1993

9.0

7.4

1.5

1994

6.6

3.0

2.4

1995

6.1

1.75

2.4

(at mid August)

It can be seen that the Programme for Competitiveness and Work pay policy which has been in place since 1994 is delivering moderation in the level of pay increases in the public service.