Gay Mitchell
Question:63 Mr. G. Mitchell asked the Minister for Finance if he is satisfied with the operation of the benchmarking exercise and its impact on the public finances and the efficiency of public services.
Written Answers. - Benchmarking Process.
The benchmarking process, established in July 2000, was an important step in changing the system of public service pay determination. The objective was to move from the old relativities – driven system which was characterised by leap-frogging claims often with no real basis other than that some other group had received an increase. The benchmarking process allowed a single assessment of the groups in the public service and there was agreement that historical cross-sectoral relativities were incompatible with this exercise. It also linked public service pay rates to similar jobs in the private sector.
In the new national agreement Sustaining Progress the parties have agreed that benchmarking was an important initiative in developing a better system of public service pay determination and is an appropriate way to determine public service pay rates in the future.
The benchmarking body recommended that the payment of the balance of the awards, that is excluding the payment of the first quarter from 1 December 2001, should be dependent on real and verifiable outputs from modernisation, flexibility and change. This was endorsed by the social partners in Sustaining Progress. It was further agreed that the payment of the general round increases as well as the final two phases of the benchmarking increases should be conditional on satisfactory implementation of the modernisation agenda and the maintenance of industrial relations stability.
The agreement sets out the modernisation targets both generally for the public service and specific objectives for the major sectors. The aim of the modernisation programme is to ensure a better delivery of public services. The agreement sets out a verification process to be followed, including the preparation of and reporting on action plans, verification of progress by performance verification groups with a strong independent membership and final decisions by the relevant Secretaries General in each case that the necessary conditions have been met or not as the case may be.
Under Sustaining Progress public servants are to receive standard round pay increase totalling 7% over the next 18 months and the implementation of the recommendations of the Public Service Benchmarking Body. The total cost of these increases when fully implemented will be about €2 billion a year. This therefore involved the commitment of a very substantial part of the available resources in a very tight budgetary situation to public service pay.
In deciding to make these amounts available for public service pay costs the Government was influenced in particular by two important considerations. These were the conditionality attaching to the pay increases in relation to public service modernisation and the commitments in the agreement to industrial relations peace and stability. All of the previous agreements contained industrial peace clauses but the provisions in Sustaining Progress were reinforced and underlined to a much greater extent than previously. Everyone involved knows that industrial relations stability is an essential requirement and must be delivered on. This is what the Government and the public sector unions signed up for.
We are now only a few months on from the conclusion of the negotiations and ratification of the agreement and we find ourselves with a number of disputes which, in my view, are in breach of the peace terms of Sustaining Progress and indeed would have been in breach of the terms of the Programme for Prosperity and Fairness.
I am concerned that these disputes may well have implications for the implementation of the terms of Sustaining Progress in these specific cases. More widely, however, unless they are resolved speedily they raise questions about the credibility of the Sustaining Progress agreement as a whole and, indeed, could cast a shadow on the whole benchmarking exercise.
I hope that the current difficulties can be resolved and that there would be a return to the more orderly arrangements envisaged in Sustaining Progress.