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Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach debate -
Tuesday, 2 Feb 2021

Salary Increase for Position of Secretary General at the Department of Health: Minister for Public Expenditure and Reform

We are joined by the Minister, Deputy McGrath, from the Department of Public Expenditure and Reform and Mr. David Moloney, acting Secretary General of that Department. I ask members to turn off their mobile phones. I remind them that for identification purposes and for the recording of the meeting that they should remove their face masks when making a contribution.

The purpose of the meeting is to discuss the recently sanctioned salary increase for the position of Secretary General at the Department of Health. There are other issues but I suggest we first deal with that matter fully before we move on to any other matter.

I ask members to note that there are limitations to parliamentary privilege and the practice of the House as regards references they make to other persons in their evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected pursuant to both the Constitution and statute by absolute privilege. However, today's witnesses are giving their evidence remotely from a place outside the parliamentary proceedings. As such, they may not benefit from the same level of immunity from legal prosecution from proceedings as a witness physically present does.

Witnesses are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable, or otherwise engage in speech that may be regarded as damaging to the good name of that person or entity. That generally covers the note on privilege.

I invite the Minister to make an opening statement.

I thank the Chairman and members of the committee for the invitation to come before them today, albeit virtually. As the Chairman has done, I acknowledge Mr. Moloney, the acting Secretary General of my Department, who is also with us. As members know, this is my first time appearing before the committee. As a former member of many years, I am familiar with the valuable work undertaken by the committee on a constant basis. It is a great privilege to appear before the Chairman and members in my capacity as Minister for Public Expenditure and Reform.

I am also happy to have the opportunity to address the points raised in the Chairman's recent correspondence regarding the post of Secretary General in the Department of Health. At the outset, I want to emphasise that the matter in question relates to an ongoing process for recruitment to a post that is of strategic importance for the Government. It is important that commentary on this issue is cognisant of that fact and is not prejudicial to the outcome of that process.

As the committee will be aware, as Minister for Public Expenditure and Reform, I have statutory responsibility for the terms and conditions of service, including remuneration, of civil servants, as set out in the Civil Service Regulation Acts. In meeting this responsibility, I engaged with the Taoiseach, the Minister for Health and the Secretary General to the Government regarding the terms to apply for the recruitment to the post of Secretary General in the Department of Health.

In that context, I took account of a number of factors. It is no secret that the post of Secretary General in the Department of Health is a highly complex one with a challenging brief, especially in the midst of a global pandemic. There are significant responsibilities attached to the role, including the ongoing management of the response to the Covid-19 public health emergency, implementing the Government’s ambition to deliver on Sláintecare and the management of the greatly increased budget of €22 billion for health in 2021.

Ultimately, it will be the responsibility of the successful candidate to fulfil the Department of Health's mission to improve the health and well-being of the people of Ireland. Reflecting these points, I consider that a salary of €292,000 is commensurate with the scale of the responsibilities and the unique challenges attached to the role, not least at the current time.

The decision to appoint a serving Secretary General to the Department of Health on an interim basis pending the holding and conclusion of an open competition for the substantive vacant post is a matter for the Government. In that context, in line with the decision taken by the Cabinet on 6 January, Mr. Robert Watt was assigned to the role of Secretary General in the Department of Health on an interim basis. I wish to clarify for the committee that Mr. Watt had no input into my sanctioning of the salary of €292,000 to apply for the open competition for the substantive post. The newly sanctioned salary will apply only to the person appointed arising from the open competition currently under way.

Regarding the selection process, the members will be aware that the position was openly advertised on 8 January this year by the Public Appointments Service, PAS, on behalf of the Top Level Appointments Committee, TLAC. In addition to the advertisement by PAS on its portal, the position has been internationally advertised online on selected websites, EXEC Jobs, The Guardian, and the Health Service Journal. It was on LinkedIn and so on, and targeted media. PAS also issues job alerts by email and text message to those who have registered their interest in the position at this level on TLAC circulated it to Departments in addition to other public service bodies.

The selection process to recommend prospective candidates for the advertised position is being undertaken by TLAC. The Government has a policy of open recruitment. The role of TLAC, as an independent body, is to support that and ensure that the recruitment and selection process for senior Civil Service posts is accessible to the widest pool of candidates. TLAC operates under the code of practice issued by the Commission for Public Service Appointments in accordance with the principles of fairness, consistency, accountability, probity, best practice and professional confidentiality. The secretariat is based in my Department to support this operation, while the competition is administered by PAS on behalf of TLAC. TLAC will consider any applications received by PAS for the advertised position. The same recruitment process will apply to all candidates for the position of Secretary General at the Department of Health.

On the conclusion of its processes, TLAC may recommend up to three names, in alphabetical order, to the Government in respect of those candidates considered to be of the standard required for the post. As requested, correspondence and documentation on this matter have been provided to the committee. My Department will publish the material on its website at the conclusion of today's session.

I am aware that the focus of attention is the salary associated with the post but I would like to touch very briefly on a couple of wider issues. With regard to our general expenditure, overall gross expenditure for 2020 came in at €85.3 billion. The increase of almost €15 billion against the original 2020 expenditure allocations reflects the additional funding provided in response to Covid-19. This significant allocation of resources has continued into 2021, with, as outlined in Revised Estimates Volume 2021, a Government expenditure ceiling of €87.8 billion for this year, inclusive of a contingency reserve of €2 billion and a recovery fund of €3.4 billion. We are also undertaking a review of a national development plan, NDP to the value of €116 billion.

My Department is centrally involved in the management of Ireland's draw-down from the Brexit adjustment reserve, and the indications are that we will get over €1 billion in phase 1 of that. Along with other Departments, we are preparing Ireland's national recovery and resilience plan to enable us to access grant funding of €853 million as part of the EU-wide recovery and resilience plan.

On public service pay, balloting is under way on the proposed new public service pay deal, Building Momentum. We should have the outcome of that in the next few weeks. In addition, there is a wide programme of both public service and Civil Service reform ongoing within my Department.

I appreciate that the Chairman is under pressure for time so I will leave my opening remarks at that. I look forward to questions and our engagement.

I will call Deputy Mairéad Farrell first. I ask members to address the first item on the agenda, which concerns the Department of Health and the salary of the Secretary General.

In the correspondence we have received as a committee, we do not see any explanation as to where the astronomical increase of €81,000 comes from.

Where was this figure plucked from? Where are the calculations to show why an increase of €81,000 was chosen?

If the Deputy looks through the correspondence and documentation in its entirety, in particular the minutes of the meeting at the end of October 2020, which was attended by me, the Taoiseach, the Minister for Health and the Secretary General to the Government, it was for the very purpose of looking at the needs in the Department of Health and the need for a new Secretary General to be put in place there for the coming years. The context of the final decision I arrived at is set out in the minutes of that meeting. A number of options were considered as part of the discussion. The option that we arrived at as a collective at the meeting was that there would be a need for an enhanced salary to attract the very best candidates from all over the world to apply for a position of significant responsibility.

It is also important to point out that just over two years ago the attempted recruitment of a CEO of the HSE was unsuccessful and the position had to be re-advertised ultimately with a larger salary sanctioned. The current salary of the CEO of the HSE is approximately €363,000. In making the final decision I looked at other salaries at very senior levels across the public service. The final salary that has been arrived at is approximately 20% less than the current salary of the chief executive officer of the HSE. It is fair to say that there is an element of judgment involved as to what level one believes is appropriate to attract candidates of the very highest calibre. It remains to be seen who has applied and ultimately who will come through the process, but if I put my hand on my heart and ask myself if the money was worth it, if somebody comes into the Department of Health following this process and he or she does a good job, then it will have been.

There is one reality for some and then there is a totally different reality for others. I did look at the minutes of the meeting but it did not give exact calculations on how the €81,000 was agreed on. It just seems that €292,000 was seen as a nice, round number. The Minister mentioned in his opening statement that he feels the figure of €292,000 is commensurate with the scale of responsibility, but he recently voted against pay for student nurses. Is it the case that voting against pay for student nurses is commensurate with the scale of responsibility?

The Minister indicated that he looked at international examples. I am very interested in how he benchmarked this and what international examples he considered. The director general of the WHO earns €199,000. The top scale for Britain's most senior civil servant, who manages a civil service workforce of 456,000, earns approximately €232,000. It seems to me that this is significantly higher than international comparators. Could the Minister clarify what international examples he looked at and how he benchmarked this because it seems to be outrageously high?

The reference I made to the international context a few moments ago was the expectation that a salary of this order would attract applicants from all over the world and one would hope people with experience of dealing with a large public sector or private sector organisation. When one looks at the responsibilities of the Secretary General of the Department of Health, one must bear in mind the fact that, as Accounting Officer, he or she has responsibility for a spend of €22 billion. Even though the HSE sits under the Department of Health, as such, the Secretary General of the Department is the Accounting Officer and is legally responsible for all of that expenditure. There are approximately 600 staff within the Department and the overall sector employs in the region of 125,000 people. There are also 19 non-commercial State bodies under the Department. It is a pivotal position right at the heart of government. The Deputy knows the ambition the Government has for Sláintecare. We increased the budget for health in 2021 by approximately €4 billion.

Some, but not all, of that is Covid related because we have real ambition to transform our health service and deliver on the Sláintecare programme.

The Minister has not-----

Deputy Farrell referred to the juxtaposition in regard to student nurses. I of course fully understand that and the Government is determined to resolve that issue. As she knows, the Government appointed Professor Tom Collins to undertake a short-term review of clinical placement allowances for student nurses and midwives. He has reported back and made a recommendation. There is ongoing engagement between trade union representatives and the Government on that issue. We value the work of student nurses and all those involved in education placements throughout the health service. There is a determination to resolve that issue.

The Minister has said there is a determination to resolve the issue. There are reports. Nurses who went on strike and are now on the front line of the pandemic got a Public Service Pay Commission. However, when it comes to top civil servants there is an increase of €81,000 and there does not seem to be any clarity. The Minister has given us no clarity as to how that figure was calculated. What calculations were made in respect of it? The Minister is determined to resolve the issue of student nurses pay, but that is taking up a lot of time for people who simply do not have that kind of money.

The Minister has not clarified for us the position regarding the €81,000 increase. We need detail. What evidence does the Minister have, apart from one meeting for which we received the minutes, that the increase of €81,000 was needed? Did he speak to recruitment agencies about it? Where did the figure of €81,000 come from? Was the figure plucked from the sky?

No, it absolutely was not. As I said, the context is very clear. The meeting to which I referred involved very senior people, including the Head of Government. There was consensus at that point that there would be a need to go beyond the standard terms if we wanted to get the best candidates interested in and applying for-----

Why was the increase €81,000?

It remains to be seen who ultimately applies for the job and comes through the process. In arriving at the figure I considered other senior roles across the public service. I touched on a number of those already. As the Deputy knows, bespoke arrangements were put in place for the Garda Commissioner and the head of the HSE. There is a very high salary for the Governor of the Central Bank.

The view I arrived at, in consultation with my colleagues, was that this level of salary, albeit high, is commensurate with the level of responsibilities required for the post. Therefore, I believe it was the right decision and it is to be hoped it will attract candidates of the very highest calibre who will make a real difference.

I remind Deputy Farrell of her time.

Who did the Minister speak to in his Department? Did he speak to the Secretary General about it? Did he heed the warnings he got from people in his Department that the increase could have a knock-on effect on others in terms of pay scales? What risk analysis did he carry out?

Your time has concluded Deputy Farrell.

I engaged directly with the pay division of my Department regarding the specific salary. That can be seen in the memo that was generated. There were discussions with my pay division prior to that. I referenced the engagement that was ongoing with the Taoiseach, the Minister for Health and Secretary General to the Government. I also consulted the Minister for Finance to draw on his experience as a former Minister who was involved with a group of very senior people in the area of health, something to which I referred to earlier. That is the context.

People understand the logic that the salary of a person who holds such massive responsibility will be commensurate with that responsibility. People's jaws dropped right across the country when the figures that we are discussing today were publicised.

The Minister mentioned the fact that we are competing internationally on this, but the Secretary of Health and Human Services in the USA earns less than €200,000 a year, the British Prime Minister earns just over €150,000 a year, and the director-general of the WHO earns less than €200,000 a year, as I understand it. These are also positions of high responsibility and the salaries are far less than the one we are discussing. There seems to be two Irelands here. There is the Ireland of the healthcare assistant who earns €24,000, or the student nurse, who is struggling to get any earnings for the work they are doing, and even the family carer, who earns about €11,000 per year. Do these people not need to receive proper salaries to recruit the number of individuals that we need? There are pinch points across the healthcare service in nursing and the caring professions because these people are not getting paid the salaries they need. How come the Government does not have the same attitude to these key workers as regards necessary salaries?

I thank the Deputy for his question. As he will be aware, as part of the additional funding we are providing for the Department of Health and the health sector, there is an ambitious plan to recruit approximately 16,000 additional health professionals over the course of 2021 to make the move that we all agree is necessary, which is to implement Sláintecare and build up the permanent capacity of our public health service. We are determined, as a Government, to do that. In the recent negotiations that we had for a successor agreement to the current public service stability agreement, the way we structured that in agreement and negotiation with the trade unions was that the benefits are very much weighted towards those at the lower end. For example, even in very difficult times, which we are in, and we are under budgetary pressure, the 1% increase next year will be worth a minimum of €500, even for the lowest paid public sector workers. That is just an example of how committed we are to dealing with the issue of low pay. I fully understand that the issue of deciding salaries for people in very senior leadership positions is always difficult, is always going to be contentious and may not sit well with people. As a public representative, I engage with people every day who are going through very real struggles. However, in government one has to use judgment and make decisions that ultimately will deliver better outcomes. That is why we have made the decision to go with an enhanced salary with a view to getting a stronger pool of candidates for the post.

The people working in the healthcare service currently will note the key difference between the Minister's approach to them and his approach to this particular position. His approach to increasing the salaries of those within the health service is in the future tense, while his approach to this particular salary is in the present tense. That is a world of difference for the lives lived by these people today.

Well in excess of 500,000 people have been made unemployed because of Covid, hundreds of thousands of people have had their incomes radically reduced across the country and families listening to this meeting at the moment are being pushed into poverty. In 2020, we had a budget deficit of €19 billion, while the excess national debt that we will accumulate this year will be approximately €35 billion. We have a national debt of €239 billion, which works out at €47,000 for every man, woman and child in the country. People will see this type of largesse in salary for these particular roles in stark contrast to their own experience. They will see a chasm that exists between their own experience and how Government is treating these particular positions. Of all the documents I have seen, none points to the fact that this country is in economic dire straits at the moment. Was that not taken into consideration when discussing this particular salary?

It is only fair to say that the Government has not been found wanting when it comes to supporting people directly impacted by the economic devastation caused by Covid-19.

We have extended the PUP again, leaving it open for new entrants and maintaining the higher rates. The same applies to the wage subsidy scheme. The Government has spent vast sums of money to try, insofar as we can, to cushion the blow for people who were directly affected by the loss of a job or the loss of business income. I am not saying that we have always got it right but we have certainly tried our best with initiatives like the local authority rates waiver and the new Covid restrictions support scheme. We had a €19 billion deficit last year not because our taxation receipts collapsed but because we spent the money that we needed to spend to support people. That was the right thing to do and it is the Government's intention to continue to support people. That is why we have provided a Covid recovery fund of €3.4 billion. We also have a contingency fund of €2 billion. We will need those funds over the coming months in order to be able to continue to support people. That is the Government's strategy and we are in a position to pursue countercyclical policies at the moment. We can borrow at historically low rates of interest and will do so in a responsible way.

On that point, there has been very little talk to date about what the next two to four years will hold but there is no doubt that our budget deficit will have to be dramatically reduced. Historical evidence suggests that under Fianna Fáil and Fine Gael, much of that reduction will take the form of tax increases for low and middle income earners and cuts to public service investment. How can the Minister make an argument for a salary increase of almost €90,000 in that an environment?

As the Deputy said, our national debt is rising significantly but the cost of servicing that debt is actually falling. The average interest rate on our debt is now in the region of 1.6%. The National Treasury Management Agency, NTMA, has done a great job of taking maximum advantage of the really favourable borrowing conditions by refinancing our debt where possible and availing of the longest possible maturity profiles in the market. That said, of course the Deputy is right to imply that this cannot be sustained forever. The Minister for Finance and I, along with our colleagues in government, have been upfront about that. We genuinely believe that bringing about economic recovery is the best way to close the deficit. If we can help people to get back to work and keep businesses alive that are really struggling now, that is the best way to rebuild our tax revenues and to reduce expenditure on necessary social supports. That is our objective and that is the way we intend to approach this over the coming years.

Deputy Richmond is next.

I have a couple of questions that are not related to the Secretary General's salary. Should I leave them to the second round? Is it better to focus on the Secretary General for now?

Yes; the Secretary General only please.

No problem. That is fine. I thank the Minister for his comments and answers so far. I wish to elaborate on some of the points made by Deputies Farrell and Tóibín regarding the agreed salary. Beyond the exact figure that has been quoted, what other benefits come with the position? People have mentioned the WHO and the HSE. Is there any comparative data for other EU member states, particularly those with comparable populations or health services of a similar size? What sorts of salaries and packages are on offer for equivalent positions? On the other side of that equation, what is expected in return? The Minister mentioned the Government's ambitions for the Department of Health and our health service as a whole. Tied to the salary, the package of benefits and the conditions, will there be any targets or delivery markers in terms of doing the job and fulfilling the contract beyond what is contained in the advertisement? How will performance be rated? Will there be six-monthly or annual reviews with the Minister for Health or will the Secretary General be solely answerable to himself?

I will ask Mr. Moloney to answer the question about the non-salary terms associated with the role which are standard in nature for these types of competitions. He will be able to provide some context vis-à-vis competitions run by the Public Appointment Service, PAS and the top-level appointments committee, TLAC.

I thank the Minister.

I can come in on the specific responsibilities of the position and where it fits into Government priorities.

Mr. David Moloney

The most obvious associated element of the package is the pension entitlements that come with different Civil Service packages. Pension entitlements are, of course, a complicated area insofar as the rules have changed a lot over time. The way in which Civil Service pensions, in particular, are treated has changed over time due to various reforms. For a Secretary General grade such as this one, there are two categories. The first applies to a person who was appointed before 2011 and if such a person was to be successful in this competition, one set of rules would apply to him or her. Another set of rules would apply for a person who joined the Civil Service after 2011. Broadly speaking, for someone who joined the Civil Service before 2011, the package includes the potential for added years and pension benefits that rely on final year salary. After 2011, those conditions are more restricted and, indeed, if the person appointed as a result of the current competition is new to the Civil Service or public service, they will join the single pension scheme and will not be eligible for any enhancements above and beyond other members of the single pension scheme. Those pension entitlements are the key additional benefits associated with a post of this nature. They are dependent on length of service and the conditions of the person who is eventually successful in the competition. Broadly speaking, the three categories that would apply are people who joined the Civil Service before 2011, those who joined post 2011 and members of the single pension scheme.

People always look at salary and pensions. We talk about comparing this role with non-governmental and private sector roles. Are expenses included in the package? Is there a mobile phone allowance or private health insurance included in the package? What else is included? Are mileage or fuel cards, those ancillary elements, included? It is a major role and there is often a lot more beyond salary and pension entitlements. Is it possible for either Mr. Moloney or the Minister to give a bit more detail about the ancillary parts of the package that perhaps have not come out in the public domain yet?

Mr. David Moloney

The kinds of benefits the Deputy has outlined were available to a very limited number of Civil Service positions in the past. Such a package would perhaps have included a performance-related pay element. Those types of elements are no longer common and do not really occur in the Civil Service and public service any more. None of the benefits that the Deputy mentioned would accrue to the post that is under discussion here.

Will the person who is successful in their application not be given a Government mobile phone or fuel card even if it is required in the carrying out of their duty?

Mr. David Moloney

I apologise. It is certainly the case that many officials have an official mobile phone and the successful candidate certainly would be expected to have an official mobile phone. In the modern age, that person will be expected to be contactable 24-7. Other than the mobile phone, there are no ancillary elements to the package.

I will come in on the other aspects of Deputy Richmond's questions. I know he has read the booklet that was published as a part of the open competition which sets out the exact responsibilities in terms of oversight, management and leadership of the Department and of the overall health sector. It is a high-level leadership position in health across the country. The Secretary General is, of course, required to provide advice to the Minister for Health and to three Ministers of State on an ongoing basis. He or she will also participate in a number of different groups of officials and Cabinet committees. He or she will be the Accounting Officer with legal responsibilities under the legislation and will lead the Department's management board. He or she will also be a member of the overall Civil Service management board and the public sector leadership board.

I think we can take that as read.

How does the Minister justify a salary of €292,000 for the new Secretary General of the Department of Health when the Director General of the World Health Organization is paid €199,000 per annum?

Again, to bring it back to an Irish context and in regard to senior leadership positions here, which is where the person appointed to this post following the open competitive process will be based, just over two years ago there was a failed attempt to fill the role of CEO of the HSE. That is a pretty sobering fact which we all must bear in mind. When I look at the performance of the current incumbent in the HSE and the leadership that is provided - no doubt the Deputy does not agree with that salary either, as is his right - to me, the quality of that leadership and its value is immense. If we can get someone -----

Does the Minister accept that an observer looking at those two figures, €93,000 a year more for the Secretary General of the Irish Republic's Department of Health than the Director General of the World Health Organization would scratch his or her head a little?

I can understand that but the reality is that when in government, one must make decisions.

I hear where the Minister is coming from -----

The point I would make is -----

I would like to pose my second question. The Tánaiste said that the huge pay increase for the Secretary General of the Department of Health will inevitably result in knock-on pay claims from other senior civil servants. Does the Minister accept that?

I would not accept that there is a comparable position in respect of which it would be possible to make an equivalent case. Of course, I accept the Tánaiste's point that it could lead to other requests and demands on pay. It has not done so at this point, nor do I expect it to, but if it did -----

It is early days.

Yes, but if it did, I would not envisage that a case could be made of the same nature and quality. There are other examples across the public service. Did the enhanced salary for the Commissioner of An Garda Síochána result in the deputy and assistant commissioners being paid a lot more? It did not. When the CEO of the HSE got a greatly enhanced salary, did that result in national directors across the HSE getting paid an awful lot more? It did not. To answer the Deputy's question, I do not envisage this decision placing pressure or, at least, resulting in any change in relation to general pay policy at senior level.

In his introductory remarks, the Minister laid a certain emphasis on the fact that the new Secretary General of the Department of Health will be coming into the position at a time of great challenge with the pandemic, etc. There are other public sector workers who face very difficult tasks and challenges in doing their work at this point in the pandemic. One such group, for example, is nurses. The Minister's proposal is that nurses would have a 1% pay increase this year. The pay increase for the Secretary General is 40%. Does the Minister believe that a pay increase 40 times that of the percentage pay increase for a nurse is justifiable in the current conditions? Does he accept that a pay increase which is more than the vast majority of what nurses take home in a year is justifiable in the current circumstances given the work that those front line workers are doing in the pandemic?

They are doing phenomenal work, I know that the Deputy and I absolutely agree on that. We are in the middle of balloting on a possible new public service pay deal. I hope it is ratified, that remains to be seen. The Irish Nurses and Midwives Organisation, INMO, and other unions which represent nurses will play their part and conduct the process as they see fit.

I am of the view that this Government's public pay policy leans in favour of those at low- and middle-income levels across the public service. I will make a few brief points to back this up. I mentioned already, and I will not repeat it in detail, the fact that the two general rounds of 1% pay increases have a floor benefit of €500 for every public sector worker. As a result, even somebody on €25,000 will not get €250 but €500 and that is proper order. They will get it twice if the agreement is ratified. There is also a sectoral bargaining component. Inevitably, the way this will work out is that it will be of greater benefit to people on low and middle incomes. We have agreed a process in respect of the Haddington Road hours which, of course, are very relevant for people on low and middle incomes throughout the public service. We are putting real money behind this, with €150 million in 2022. With regard to technical grades, we have the reinstatement of twilight payments and tool allowances-----

-----that had been cut, in addition to the restoration of overtime rates that had been cut previously under past agreements. These are all measures that undoubtedly favour people on low and middle incomes throughout the public service. That is as it should be.

Despite all the points the Minister has raised, the fact remains that it is a 1% increase for a nurse and a 40% increase for the Secretary General of the Department of Health. I do not think this is a position the majority of ordinary people would support. In fact, a significant number of them would share my view that it is outrageous. I also think the Tánaiste is correct that, as night follows day, there will be knock-on pay increase demands from senior civil servants. The Minister conceded that this could be the case. I would go further and state that it almost certainly will be the case. The Director General of the World Health Organization is on €199,000 a year while the Secretary General of the Irish Republic's Department of Health is on €292,000, which is €93,000 more. The Minister can make all the points he wishes about filling the position but an ordinary person looking at that will say it is bizarre and outrageous.

In the context of the public sector pay deal, many workers have been on the front line of the Covid crisis and have put their health and lives on the line in some cases. Our public sector workers are worth a lot more than 1%. They are doing phenomenal work. They do not need phenomenal pay increases. They need real, genuine good decent pay increases-----

I thank Deputy Barry.

-----but 1% is not that. I would encourage them to reject the deal.

May I respond briefly?

In short, and for the information of members, the Minister might just confirm, arising from the minute of 30 October 2020, that the suggestion on this presumably came to him from the Minister for Health and that this triggered the meeting we are speaking about in October. How did the selection process for the interim Secretary General of the Department of Health work? Who approached Mr. Watt? Was there an interview process? Very quickly, will the Minister put this in context for me?

Yes, absolutely, but first I will very briefly respond to Deputy Barry. In recent months, we have had the final payment under the public service stability agreement of 2%, which went to all public servants. With regard to pay pressures that will possibly follow this decision about one post, the Deputy has to judge us on the decisions we make, if and when those pressures arise. To the Deputy's point as to how many people feel about a salary of this nature, I totally understand that. However, many people also will judge the value of it on the outcomes achieved and how well somebody performs.

If we were to pursue the policies advocated by the Deputy-----

Could we move on rather than getting into a scrap?

I have a right to reply and I will come to the Chairman's question. I am just making the point that if we adopted and implemented the policies of Deputy Barry in respect of public service pay, we would not have Paul Reid as head of the HSE or Drew Harris as Garda Commissioner. That is just the reality. They may be uncomfortable but those are the facts.

I do not disagree with either of those comments.

Could we move on?

Of course. Members have read the minutes of the meeting from the end of October and, as pointed out, the catalyst or origin was a request by the Minister for Health to have a discussion on the position of Secretary General in his Department. As members know, the post was vacated in June of last year, when the serving Secretary General moved to another Department. For the period since, there was an acting Secretary General serving in the Department at a time of truly extraordinary challenge. The minutes set the thrust of the discussion and where it led to by way of a conclusion that there would be a need to go beyond standard terms in order to attract candidates of the highest calibre.

Turning to the question of the appointment of Mr. Watt as interim Secretary General of the Department, pending the outcome of the open TLAC process, ultimately, the Taoiseach asked Mr. Watt to move across to the Department of Health on an interim basis. That is what happened in the first week of January.

Most of the correspondence thereafter to and from officials within the Department would have been copied to Mr. Watt and the various officials there are also attached to the TLAC secretariat. Is that correct?

The correspondence speaks for itself in that sense.

It is just to confirm it.

I should make the point that one of the options discussed at the meeting of 30 October was that an existing Secretary General could possibly move across to the Department of Health by way of transfer. We had a full and open discussion at that meeting and different names were mentioned of existing Secretaries General who may or may not have been suitable or interested in doing it. Mr. Watt was mentioned and I was aware through November that there was a possibility of him being asked to go across to the Department of Health on an interim basis. That is all it was up to that point and no decision had been taken. It was not my decision to take. In the correspondence, members can see that, in a cautious and prudent approach, I took the view that it would be better, in view of the specific salary question-----

We are not dealing with the salary. I am just asking about the process. We now have it down to the point where Mr. Watt was asked by the Taoiseach to take the role. That is how it happened. Did a memorandum have to go to the Government then?

That is correct.

A memorandum did go to the Government.

There is a formal Government decision of 6 January on the appointment of Mr. Watt on an interim basis.

That is based on the memorandum to the Government.

Every appointment of a Secretary General must go before the Government.

I understand that. It was based on a memorandum to the Government.

The issue of salary is a matter for the Minister.

Was it based on a memorandum to the Government? The Government was notified about this, discussed it and the interim appointment was made.

The Taoiseach gave an update to the Cabinet on that day and informed us that Mr. Watt was to move across to the Department of Health on an interim basis and that there would be an open and competitive TLAC process for the permanent post.

Is that how the Minister describes a memorandum to Government? That is what I am asking.

That was delivered verbally. Decisions can be made in that way. One does not have-----

I am not questioning that. I just wondered about it because I heard in the public domain that one Minister had declared that there was no memorandum to Government. That clarifies that.

Yes. It was a contribution by An Taoiseach which was loud and clear. Everyone heard it and it was noted as a formal Government decision. Government decisions are circulated to Departments after the event and such a decision does exist.

I can see the long list of members who want to get in so I will not repeat questions that have been asked about the salary but I would share many of the concerns expressed by the other members here today. It is a highly paid job and that is a significant pay increase to receive. In saying that, whoever gets the job has a tough road ahead of them considering that we had many problems in the health system prior to the pandemic. I do not believe matters have improved considerably so it will be a tough job for whoever gets it.

In the statement the Minister submitted to the committee he talked about the national recovery and resilience plan. I would like to touch on that, if possible. Last year, there was talk of the European green deal budget. I also heard a reference to the next generation European budget and now we have the national recovery and resilience plan. Can the Minister explain the relationship of those three funds? Are they the same names for the funds and will he explain how are we interacting with that European funding?

I thank the Deputy. Yes-----

I am sorry for intervening but I want to deal with this item first. If Deputy Matthews has questions directly associated with the first item he should please ask them and we can come back on the others if we have time at the end.

My understanding was that an opening statement was submitted that covered a number of issues that-----

We stated at the very beginning that because of the time pressure we are under we would take this particular topic first and that is what we are doing.

I have expressed my concerns on the pay increase. The Deputies have asked similar questions. If we keep going around the room the same questions will be asked and-----

No. I would ask Deputies to consider that.

There is a large amount of important European funding there-----

Yes, there is, but we will deal with that in due course. I will come back to the Deputy. I call Deputy Durkan.

I thank the Chairman.

I presume that some considerable thought was given to the sensitivity of this particular appointment when it was being made and that a consensus was arrived at in the context of the Covid-19 crisis and the pressure the Department, the health services in general and the workforce of the Department are under. Was it taken into account that a precedent could be set in this particular case? That is the first question.

I thank the Deputy. Will he clarify the first part of his question? When he says "this particular appointment" is he referring to the salary associated with the open competition now or the interim-----

There is another question coming up but I want to get an answer to that first, if possible. The other question will become obvious later. For instance, the increase in salary presumably carries on to the ultimate appointee.

It does not apply to anybody else. The salary is for whoever comes through the open Top Level Appointments Committee, TLAC, process. There is nobody currently being paid the €292,000.

The Minister mentioned earlier the difficulty in finding a chief executive for the HSE some time ago. Was that the deciding factor here and will it become a deciding factor in other appointments throughout the year?

I believe it is one part of the overall context within which the decision was made. I said that earlier so I do not need to repeat it. There was certainly a recognition that when it comes to a senior leadership role in a hugely challenging and highly complex area we need to attract the very best candidates from all over the world.

This salary was designed with a view to doing that. That process is well under way. The deadline for applications has passed at this stage and it is going through the initial PAS, Public Appointments Service, process now. It will then go on to TLAC from there. Mr. David Moloney can provide more context and detail on this.

On the point about pressures that it might lead to, I had a good engagement with Deputy Barry on that question earlier. There may well be others in the public service who will point to this to burnish their own argument for an enhanced salary. I have not come across any arguments, nor do I envisage any being made, that include the same challenges and can make a similar case of such quality as the need for having strong and effective leadership in the Department of Health.

I thank the Minister for his replies. Unfortunately, whether one is in government or opposition, one has to ask these questions. Have the outstanding issues with FEMPI been resolved to the satisfaction of those directly affected?

We are well on the way towards the full rewinding of FEMPI at this stage. Back in October, we had the full unwinding, for example, for all of those earning up to €70,000. There is what is called the long tail of FEMPI for the higher earners. In July of this year, there will be the unwinding of FEMPI for those between €70,000 and €150,000. In 2022, there will be the unwinding of the remaining tail of FEMPI for those earning above that figure.

That is set out in legislation. That is not a decision that I have made. In approaching the issue, I sought legal advice and engaged directly with the Attorney General. His advice to me on those issues was clear, namely, it would not have been possible to seek to extend those dates further.

In addition to that, the way we have designed the public service pay deal, which is being balloted, is that people at the higher end who will benefit from FEMPI restoration either this year or next year will not get the pay increases provided for under the agreement for those years in question.

Does the Minister think this particular issue is likely to influence discussions that may take place at a later stage in respect of FEMPI?

I do not because we are coming to the end of FEMPI, as I have outlined. All low and middle-income public service workers have been fully reinstated at this point. We will have further restoration for higher earners in July of this year and then the final restoration for the highest earners in July 2022. Those dates are effectively set out in law. I would have had to issue orders before Christmas in respect of those issues. It was in that context that I sought the advice of the Attorney General as to the obligations in this case and the legal issues that needed to be considered. His advice was clear.

Can the interim appointee be a candidate for the position in question and considered for the ultimate appointment?

Anyone can apply for the role. The closing date has passed. I do not know who has applied nor do I want to know. I have full faith in the process that it will be fair and objective. We have some outstanding people serving on the Top Level Appointments Committee. Many of them are private citizens who are doing a valuable job for the State. I have no doubt they will do their business professionally and objectively. As I said in the opening statement provided to the committee, if there are a number of candidates they deem suitably qualified for the post, they can provide up to three names to the Government.

Then it falls ultimately to the relevant line Minister to bring a recommendation to Government. That is the process.

Is it normal practice to make an enhanced salary part of a temporary or interim appointment? Obviously, that enhanced salary will carry on to the ultimate appointment as well. Is it normal to do so or does it create a difficulty?

That is not what we have done. I think I answered that earlier. The enhanced salary does not apply to anyone currently and will only apply to whoever is appointed ultimately following the conclusion of the open process. That will take a number of weeks or months. Does Mr. Moloney wish to give a brief overview of how the PAS and TLAC stage will work in practice and how it comes to an end?

No, we should move on to Senator Sherlock.

Mr. David Moloney

Does the Chairman want me to do that? Just to say briefly-----

No, because we are short of time.

I thank the Minister for his engagement with the committee. I am conscious that a lot has been said on the proposed remuneration of the Secretary General to be appointed. It should be clear that there is a sense of disquiet and dismay among many here and in the public about the scale of the increase for the Secretary General of the Department of Health, which is disproportionate. We want the very best in the Department and the challenges are huge but we have to evaluate what the appropriate package is. Many people are dismayed as to the scale of the increase.

I will ask two questions. First, it is apparent that the Minister was vested with the responsibility of setting the remuneration for the new Secretary General. Does he think it appropriate that he is invested with that power? TLAC plays a role in the recruitment of the person but is it appropriate that the Minister is invested with the setting of the package? While it might be appropriate for him to be invested with responsibility for the whole of the public sector, should there be a special or separate arrangement for roles at the top of the public sector?

I thank the Senator for her questions and her contribution. As she said, it falls on me ultimately to make decisions on salary. For the vast majority of positions across the public service, it is done on a collective basis in relation to agreements entered into. As the Senator is aware, balloting is under way at present for the proposed new public service pay deal. For certain very senior public servants, however, it is open to Governments to arrive - and down the years Governments have arrived - at bespoke arrangements where they believe it is warranted in the given circumstances. There used to be a review body on higher remuneration levels in the public service but as that body was discontinued in 2009, there is not any such body at this time. The statutory role is with the Minister and it has to be exercised judiciously.

In making the decision in this case, I consulted a number of people at senior level across the Government and within the pay division of my Department.

I am aware of the risks. Reference was made earlier to the memorandum in question, on which I ultimately signed off. It points to the obvious risk that it could lead to pay demands from others at senior levels within the public service, although I am not sure that will be so great a problem as people expect. This is such an important and serious role that if whoever comes through the process does a really good job and improves the performance in the Department of Health overall, I have no doubt it will have been worth it.

As the Minister will be aware, public sector employees are being balloted at the moment on the public service pay deal. What message does he think the proposed package sends out to student nurses and others within the health sector who are voting this week and next week on the pay increase of 1% or €500, whichever is the greater, for next year?

As I said earlier, the way in which the proposed deal has been designed is to the benefit of those on lower levels of income. I will not reiterate all the points but the Senator touched on the minimum benefit, whereby each time there is an increase of 1%, it will equate to a minimum of €500. That is a significant change. There is also the sectoral bargaining element, from which many low-paid workers will seek to benefit through the process that will be set up if this agreement is passed, and there is the restoration of overtime payment rates and so on under the Haddington Road agreement. We are putting in place a process to address the Haddington Road agreement hours as well, which will be of benefit to many low-paid workers throughout the public service, and we are proposing to reinstate many technical allowances.

I take the Deputy's overall point. Those who have the right to vote on the public service pay deal will consider it in the round. Many of the unions have recommended its adoption, although others have not. People will look at it through their own lens and decide according to what they think is in their best interest and that of their colleagues and the public they serve. We hope it will be passed.

I too hope it will be passed but it is not helpful, to put it mildly, that the Government and the Minister have decided on this pay package and attracted all this unnecessary attention on what is a very responsible and significant position in the public service. The Government has brought this attention on itself unnecessarily and I ask it to reconsider its decision on the remuneration package.

I hope to ask questions later about the recovery and resilience strategy. The wage for the post of Secretary General will be €5,615 per week, at the same time that there will be €100 per week for nurses. That is very difficult to defend. What is the rationale that this figure is necessary to attract the best candidates? Is it that the best candidates will be motivated only by sums well above €200,000?

Is the rationale that the Minister wants people to leave other roles and come into this role and that he needs to match their current pay? If that is the case, why would there not be a pay scale that allowed the Minister to be flexible if he needed to be in matching a previous wage that a candidate might have had? On the idea that people will only be incentivised to deliver their best performance by a salary of the order of €290,000, I concur with those who look to the Director General of the World Health Organization, Dr. Tedros Adhanom Ghebreyesus, who is doing incredible work for €199,000. I challenge the idea that people need to be paid these very high figures to be motivated. There is a psychological element. Is it literally a motivation figure? Is it because the Minister has looked at the pool available? Is it an attempt to match existing wages? If that is the case, why would have flexibility rather than a built-in guaranteed amount of €292,000?

I challenge the point made around the HSE chief executive officer, CEO. The Minister stated that the decision regarding that appointment did not have knock-on consequences but he also directly cited that amount to justify a higher wage. The higher wage for the HSE CEO is, therefore, having consequences in that it is being used to justify a higher wage for the Secretary General. I am concerned that we will see a race to the top and a raising of the ceiling when what we really need to do is raise the floor. I would like the Minister to comment on those issues. I have one follow-up question specifically related to Covid and the new role.

I thank Senator Higgins for her questions. We certainly want to raise the floor. That is very important and it is why the new public service pay deal is structured in the way that it is following the agreement we reached with the trade unions. It remains to be seen what the outcome of that agreement will be in the coming weeks. I certainly share that objective. We want to make sure the salary is not a barrier to getting the very best people to apply. I hope the Senator is right that we will have people applying who are motivated by public service, as all of us are, and want to give to their country or people from abroad who see this as an opportunity to influence public health policy in Ireland in a positive way. That remains to be seen. The context of efforts to fill other leadership positions is a reality. It might not be an entirely comfortable one but it is a reality that we have to make our decisions alongside. I have no indication that there will be knock-on demands. There may well be. I am not naive but certainly in the position I hold as Minister I have no intention of the particular salary for this post being used as a ground for acquiescing to knock-on claims. I am not of that frame of mind, nor do I see a justification for it.

We saw the HSE CEO's salary being used as a justification with respect to this salary.

There was one attempt to fill that post, which was unsuccessful. That is a reality we have to face up to. The post was subsequently filled and the incumbent is doing an exceptional job. We are getting value for money.

I am not debating the value for money or the quality of the HSE CEO. The point is that the knock-on effect is already happening in that this is partially a knock-on effect. We are told we had to raise the bar once and we may need to raise the bar again.

The only point I would make in response to the fair point the Senator makes is that we are talking about two posts that are not only in the same sector but are directly linear and hierarchical in that the Secretary General of the Department of Health is the Accounting Officer with full legal responsibility for all of the expenditure that goes through the HSE. I take her point but there is a very direct working relationship in the context of what both individuals will do on a day-to-day basis. I ask the Senator to consider that point.

In terms of that accountability, it would be interesting and certainly a challenge to see if this very heavily remunerated post does increase the accountability of the Secretary General.

I am aware that there has often been frustration in exchanges between the Department of Health and the HSE on who is accountable for decisions. I hope that, given the very considerable remuneration for the heads of both bodies, we will see an increase in accountability.

The Covid crisis was mentioned specifically twice in the Minister's speech as a key aspect of the rationale. However, extreme as the Covid crisis is, it will not last forever. If the Covid crisis was a key motivation, why are we not simply considering a bonus or an increase that would apply during the period of the global pandemic, for example, rather than permanently? The Covid crisis is being used as a rationale, yet, at the same time, the benefits for whoever takes up the role, with its very high salary, will be enjoyed after the pandemic. The salary could very much set the pension rate of the individual. It is one's salary on retirement that determines one's pension. We could be paying for this for a very long period even though the rationale is based on the current circumstances. We have spoken about the very paltry sum student nurses are getting. It is notable that, in France, a bonus of €1,500 was given to front-line healthcare workers, and in Scotland a £500 bonus was given to them, yet the Minister for Health, Deputy Stephen Donnelly, told us just three weeks ago that there was a specific exclusion applying to any additional pay or bonus for front-line health care workers in Ireland due to Covid. If we are citing Covid as a special circumstance that makes a difference when hiring the Secretary General, why is it not a special circumstance that makes a difference in the same Department when it comes to a bonus or recognition for front-line health staff?

On the justification and the reasons given, Covid is but one reason, but it is an important one. Covid will be with us for quite a while yet, unfortunately. The new Secretary General in the Department of Health will play a really important leadership role in respect of the vaccination programme and assisting the HSE in dealing with the fallout from Covid in day-to-day terms, but it should also be pointed out that our experience of Covid has reinforced the need for permanent improvements in our public healthcare system and in its capacity. That is why we have provided record funding for the Department in 2021. It is to increase our critical care capacity and acute bed capacity. Those benefits will be with us well beyond Covid. To be fair, while Covid features in the booklet published on the position, as it should, it is not the most significant element that-----

I am just pointing out that it is an exception that is justified. Covid was mentioned twice in the Minister's speech. I am wondering why an exception was not made in terms of bonuses, not in respect of health investment but in respect of those front-line workers who may need encouragement going to work in very difficult circumstances.

I understand I am out of time. I want to contribute on other issues later so I will not delay now.

I welcome, for the first time, the Minister to the committee. The public are finding it very hard to understand and accept, as am I, what is being proposed. Senator Higgins raised a few of the issues I was going to touch on. This decision is being made when the Department of Health is in crisis. Some might say the health service is always in crisis but, because of Covid, we are in worse circumstances than usual. Even my own business has been in crisis where decisions were made that may not have been the right ones but, because of external factors pushing us, we were forced into making them. What analysis was conducted of the unintended consequences that Covid could have regarding the position of Secretary General?

Regarding the memorandum on 30 October, to what extent was asking the current acting Secretary General to stay on for an extended period evaluated, specifically in respect of getting beyond Covid-19?

If there is a change of leadership in the middle of a pandemic, that could upset things rather than settling them down. How much was thrashed out in respect of point one, that is, of asking the acting Secretary General to stay in his current role?

I thank the Senator for his questions. I do not think it would be fair of me to get into the detail about any individual. There was, as the Senator said, an acting Secretary General within the Department who worked very closely with the Minister at the time, which was one of huge pressure and challenge. It was listed as one of the four options set out in the minutes of that meeting. The Senator can see where the discussion took us and what it led to by way of the conclusion that was reached. I do not want to get into detail about that individual, who is a serving civil servant, just to say that the decision that was reached followed a lengthy discussion on the issue.

In his opening remarks, the Minister said we hopefully would look back on this as a positive decision in time to come when we can turn around our health service. I move on to accountability and responsibility. The Minister has mentioned a few times that at the end of the day, the Secretary General is the Accounting Officer and has legal responsibilities. Looking at the structure within the Department and the HSE, one sees that the chief executive of the HSE is answerable to the board and the board is answerable to the Minister. What role does the Secretary General have in the day-to-day operation? How does he or she influence the day-to-day operation in terms of delivery of services and control of budgets if they are not directly within his or her control? Perhaps the Minister can explain the legal responsibility he refers to in relation to the Secretary General for budgets and achieving targets. What does that mean? We have all seen that there does not seem to be accountability for anything in the public sector, whether we are delivering services or budgets on time or not. What does it mean to a layperson if the Secretary General is the Accounting Officer and has legal responsibility for that Department?

I think it might be best if we allow an actual acting Secretary General, Mr. Moloney, to come in on that to spell out what the lines of responsibility are.

Mr. David Moloney

When we think of the role of a Secretary General, there are really two roles. There is the role of the Secretary General under the Public Service Management Acts, which is about running the Department and aligning what the Department does and what the agencies under it do with the priorities that the Government sets out. That is, as the Senator says, not a day-to-day role in the context of the Department of Health. There are 130,000 people employed in the HSE. That is not possible to direct in a microscopic way from the Department of Health. On the other hand, as I am sure the Senator has seen from time to time, there are challenges in the implementation of the health policy objectives of Government. The Secretary General, under the Public Service Management Act, has a key role in driving that in partnership with the HSE. As the Senator noted, the HSE has its own internal structure with a CEO and a board.

On the money, the Accounting Officer is about ensuring there are sufficient safeguards in place to ensure the probity and the value for money of expenditure. At a fundamental level, the Accounting Officer is responsible for the safeguarding of public funds and property under his or her control for the regularity and propriety of all the transactions in each annual appropriation account that is produced. He or she signs a statement of internal financial assurance in relation to that account and appears in front of the Committee of Public Accounts, to which he or she is answerable on a personal basis which he or she cannot delegate.

That is a long-standing responsibility for ensuring that money is properly spent. It dates back to the Exchequer and Audit Departments Act 1866, so it has been in place for a long time. The dual role of Secretary General and Accounting Officer comprises the influence and strategic policy direction under the Public Service Management Act and the responsibility, which cannot be delegated, for ensuring that systems are in place for the appropriate spending of public funds under the legislation relating to the Comptroller and Auditor General under which Secretaries General are accountable to the Committee of Public Accounts.

I am not much wiser after that. What are the consequences for the Secretary General if the service is not provided or there is a failure to come within budget? The procedure in place muddies the waters all over the place and there is no real accountability. I am equally anxious to move on to the second part of the meeting so I will leave it at that.

I thank the Minister and Mr. Moloney for coming before the committee. It is very helpful to have a Secretary General before the committee. Mr. Moloney will be aware that on 27 July last, a decision was made by Cabinet to the effect that Ministers would take a 10% reduction in their salaries. In fairness, that was on foot of a memorandum brought before Cabinet by the Minister for Public Expenditure and Reform. The reason for that reduction was because members of the Cabinet recognised the very difficult financial circumstances faced by the country at the time with so many people in receipt of the pandemic unemployment payment. Have Secretaries General ever discussed making a similar contribution and accepting a similar reduction in their salaries in view of the difficult financial circumstances faced by the State?

Mr. David Moloney

I am not aware. As the Deputy knows, I have been an acting Secretary General for the past number of weeks. I would not have been privy to those discussions. The waiving of salary increases happens on an individual basis in terms of the legislation that applies to it. We know that Ministers have waived increases that have fallen to be paid for quite some time now but I would not be privy to the decisions made by individual Secretaries General.

Would it be a good idea if such a collective decision was made by Secretaries General and senior civil servants?

Mr. David Moloney

As I say, the matter of whether someone would waive a portion of his or her salary is up to the individual Secretary General. I do not believe there is a policy role relating to that. That would have to be taken at an individual level as opposed to a collective level. Clearly, there are structures within the Civil Service that set out what pay grades are appropriate to particular levels. Obviously, those pay structures have emerged and have been put in place in respect of Secretaries General. If we go back to the wages and salary levels of the higher Civil Service in 2008 and 2009, we know they were very much higher than they are now. We also know that those reductions in salary scales from 2008 to 2013 have been the last reductions to come up for unwinding under the FEMPI legislation. In fact, they are not yet fully unwound.

When a person is appointed to the position of Secretary General of the Department, he or she will earn €292,000 but, as a result of the reductions taken by members of the Cabinet, the Minister will earn €158,000. Does Mr. Moloney have any concerns about there being such a disparity between the Secretary General of the Department and the Minister who has ultimate responsibility for the Department?

Mr. David Moloney

It is unusual for somebody to report to somebody on a lower salary. It is not unique. Those situations do arise sometimes.

They have arisen in this situation because Ministers have chosen to take a waiver of increases. We know the Garda Commissioner is paid more than the Secretary General of the Department of Justice. We discussed that the CEO of the HSE is paid more than the Secretary General of the Department of Health now and will be paid more than the holder of that position under the proposed new arrangements. It is, therefore, not unique but it is unusual and tends to arise for particular reasons, in this case, because of the waiver to which the Ministers have agreed.

I thank Mr. Moloney. The Minister has answered many of the questions I was going to ask. I will make a comment and if he wishes to respond he can do so. There is some legitimate public concern among reasonable people that there is going to be such a significant rise in the pay of one Secretary General. The concern is that it will lead to an increase in the payment of higher civil servants. I ask that the Minister take this into account. It is important that we do not allow public sector pay at the higher levels for high-paid civil servants to spiral out of control. That is ultimately the Minister's responsibility and it is important that he ensures it does not happen.

I thank Deputy O'Callaghan for his comment, with which I agree. A concern about potential knock-on consequences is, of course, shared by many people. Considering the role and statutory power I have, it falls on me to withstand that. As I said, that would certainly be my intention. This is an exceptional position given the level of responsibility and the role it plays in Irish society generally. I sincerely hope we now get candidates of the highest possible calibre to apply and that the person who is ultimately successful will deliver.

Will the Minister quickly comment on the personal note sent to him from Mr. Watt which states: "I understand that you want to advertise the Sec Gen D/Health role as a 'TLAC' competition. Please see booklet attached and, in particular, the section on terms and conditions." What was the relevance of that note?

That is a handwritten note I have provided to the committee because I believe it is important that members have access to all the key documents. I believe the date on that note is 15 December. The booklet referred to by that handwritten note does not contain the specific salary because no decision had been made at that point. Obviously, as Secretary General of the Department of Public Expenditure and Reform, Mr. Watt would have had an operational involvement through that time in respect of ensuring this process moved forward.

The Chairman will see clearly, however, that when it came to the decision point, one first has the email from the Secretary General to the Government to the secretary of the Top Level Appointments Committee, TLAC, confirming he and I had agreed the salary of €292,000. Then, the electronic submission that came up to me through the system was generated by the assistant secretary in the pay division side, which I dealt with directly.

I felt that was the most appropriate way to do things given that, as I said earlier, I knew there was a possibility Mr. Watt might be asked to go across to the Department of Health on an interim basis. It had not materialised up to that point and there was no certainty that it would. To be cautious and prudent, however, I took the view that I would deal directly with the Secretary General to the Government and the assistant secretary over pay policy in my Department when it came to the actual specific salary, which was put into the booklet on 23 December.

In that note, is Mr. Watt pointing out that the salary was not included in the document? I do not understand the reason he would have pointed the Minister to the particular section on terms and conditions.

To be honest, I am not sure. Robert Watt certainly would have known that there was a willingness to go beyond the standard terms but I would not have engaged directly in respect of the specific salary for the reasons I have outlined, namely, that it would be for the assistant secretary in terms of pay and Martin Fraser in the Department of the Taoiseach. I did my bit but I think that was a better way to do things given the backdrop. I am not quite sure what was intended by that reference but, as the Chairman can see, the actual decision was made on 23 December and conveyed to the Top Level Appointments Committee. The booklet was updated and I formally approved the e-submission on 30 December.

On the Secretaries General, there seem to be three levels - 1, 2 and 3. Is that correct? Mr. Moloney can respond if he wishes.

Yes, that is correct. They are grades 1, 2 and 3.

The salary for level 1 is the same as the salary for level 2.

Mr. David Moloney

If I might come in, that is currently the case. I think with the unwinding of the financial emergency measures in the public interest, that will not necessarily remain the case but it currently is the case. Level 1 and level 2 are on a personal contribution rate of €2,211 and level 3 is on a rate of €2,598 on the same basis.

How many Secretaries General are on levels 1, 2 and 3, respectively?

Mr. David Moloney

On level 1, there are three Secretaries General - those of the Departments of Finance, the Taoiseach and Public Expenditure and Reform. I think there are 11 Secretaries General on level 2 and five on level 3.

In that case, I presume the new Secretary General of the Department of Health, whoever he or she may be, will be reporting to someone who is more senior but on a far lower salary.

Mr. David Moloney

The Secretary General will report to the Minister for Health. He or she will be part of the Civil Service management board, which is chaired by the Secretary General to the Department of the Taoiseach, but the reporting relationship-----

They are all on a lower salary.

Mr. David Moloney

-----is to the Minister.

All of these people will be on a lower salary than the new Secretary General of the Department of Health.

Mr. David Moloney

The other members of the Civil Service management board would be, yes.

How does Mr. Moloney think the other 19 Secretaries General might view this? Might a number of them say, "Hang on now; I am worth it and I should get the increase of €80,000"? Will many of them be having that conversation among themselves at this point?

Mr. David Moloney

I would not be able to say that but I would say that for civil servants, the roles and responsibilities get discharged irrespective of the salary scale.

No. I am asking about their opinions on what is going on. I will leave it at that.

I welcome the Minister to the meeting. When was the Minister first made aware that an approach was to be made to Robert Watt to take up the position of interim Secretary General in the Department of Health?

The Taoiseach would have contacted Robert Watt, I would say, in the very early days of January. Mr. Watt contacted me and informed me that the Taoiseach had asked him to move across on an interim basis. I had known that was a possibility but that was the point at which it actually materialised. I made it clear that I would not stand in the way if that was deemed to be the best thing for the Government overall and the Department of Health at that time.

It was the first week in January. Before that, Robert Watt was not aware that he may be going to the Department of Health at that stage. The Secretary General of the Minister's Department was not aware that he could be moving to the Department of Health before that point in January. Is that correct?

I think he would have known it was a possibility.

How did he know?

A range of options was discussed at the meeting at the end of October. The Deputy knows which one we arrived at. Beyond that, it remained a live possibility that a Secretary General might be asked to move across on an interim basis.

Who would have informed Robert Watt of that possibility? Did the Minister talk to him about it?

No, but I would certainly have known that it was a possibility and Mr. Watt certainly knew too.

How did he know? There were four people in the room discussing the issue, Martin Fraser, the Taoiseach, the Minister, Deputy McGrath, and the Minister for Health. Which of those four relayed that to Robert Watt?

The Secretary General to the Government or the Taoiseach could have had a direct conversation at some point. It was not a secret between us that it was a possibility but it was only that. There was no certainty around it. It then happened in early January.

He would have known, during this period where these documents were going back and forward, including the salary suggestion on 23 December, that he might be taking up the position as interim Secretary General or that it was at least a possibility.

He would have known it was a possibility but he certainly did not know it would happen and that he would go across on an interim basis.

On 30 October, the Government looked at four options. One option was for a serving Secretary General to take up the role in a permanent capacity. The minutes indicate that option was dismissed and that five conditions would have to be met. It would have to be a single candidate. I presume Robert Watt is a suitable candidate since he has taken up the interim position. The second condition is that the person would be willing to take up the position, and we at least know that he has taken it up as an interim position. The candidate would have to be available, given the agenda in the Department, and we know that he is available because he has moved. There would have to be agreement with both the official concerned and the relevant Minister, so I presume the Minister, Deputy McGrath, agreed to it. Was an approach made to Robert Watt to move permanently to the Department of Health, given that this issue was considered? It would appear that he meets all the other criteria so the only other condition is whether he was available to carry out the role on the terms laid out at that point.

A number of options were discussed, including that the acting Secretary General at the time would remain in place. Any one of a number of serving Secretaries General could be asked to transfer across. The view at that meeting was that there would not be great hope of that being successful. The Department of Health would not be seen as a great prize. The view at that meeting was that it might be difficult to get a current Secretary General to move to take that role. If the question is whether I had any discussions about a Secretary General moving permanently, the answer is absolutely not.

The Minister talks about the challenges, which are outlined in the minutes, but we have a Secretary General from a senior Department who has moved over, although on an interim basis. The second option was, therefore, potentially available. Why did the Government not execute it in full? Why did the Taoiseach ask him to move on an interim basis when one option was to move on a full-time basis on a lower salary, so that the Government would not be in the position of having to increase the salary by 40% or €81,000?

My view from the beginning was that in filling the permanent role in the Department of Health, there should be an open, competitive process, which is what we now have. It is important to see who may have an interest in applying for the role, whether in Ireland or internationally. People all over the world have tremendous experience in leading public and private sector organisations. The Chair referred to the note from Robert Watt to me on 15 December, which acknowledged that it was my view that there should be an open Top Level Appointments Committee competition.

The minutes reflected five issues relating to the second option, which was to ask an existing Secretary General to move.

Four of those issues at least have been resolved in the interim. The question is why did the Minister not put the other one, namely, whether Mr. Watt was willing to move over on a permanent basis. This would have avoided increasing the salary. Why was that not teased out or tested? The Government did ask him to move over on an interim basis but why not on a permanent basis? None of us is privy to whether Mr. Watt has applied for the permanent position. He may, however, end up being in that position in future. The recruitment process could have been avoided, as could the increase in the salary up to €292,000. What the Government believes, because that is what it guesses, is that it will get nobody to fill that position unless the salary is bumped up so high. However, the Government has no empirical evidence for this. The Minister plucked a number out of the sky. There is no record at all, none whatsoever, from him of where this €292,000 figure comes from. Will the Minister indicate what the pay is for the British equivalent of the Secretary General in the Department of Health?

To return to the Deputy's earlier point, an appointment as interim Secretary General in the Department is a very different thing to a permanent appointment or, to be more accurate, an appointment for a fixed term under contract. It was important, and the right decision to make, to open this up to a competitive process. The Deputy is right that I do not know who has or has not applied and I wish all the candidates luck. They all deserve a fair process and I have no doubt they will get it. We will see what the outcome is in a number of months time.

Was the Deputy's second question about the international context and the UK?

It was about the payment for the equivalent role in Britain.

The Deputy is asking me what that is.

I do not have that figure in front of me.

The Minister decided to increase the pay of the Secretary General of the Department of Health by €81,000. That is three times what a qualified public health nurse would get in the first year. The Minister said it was because of recruitment issues. Did the Minister benchmark it against anything, such as equivalents in Britain or France? He would have found that this is probably one of the most generous positions he is awarding. In the other examples where the Minister said there were difficulties recruiting, there was at least an option in which they went out recruiting, found out they could not fill the position and then looked at the remuneration again. The problem with the Minister is as follows. When it comes to people on senior salaries, we had the same situation with the "super junior" Ministers of State where the Government approved an additional position with an further €17,000 on top of a Minister of State's salary. Now, with the Secretary General of the Department of Health, not content with it being €211,000, the Minister increases it to €81,000 without any paperwork whatsoever to justify that.

I remind the Deputy of his time.

At the same time, in the same month the Government voted against student nurses, who are on the front line of the pandemic, being paid at all. I put it to the Minister that he is tone deaf to what is happening in society if he has no regrets over this decision and thinks it was appropriate or indeed fair that he signed off on this the very day level 5 restrictions-----

The Deputy must conclude.

-----were introduced and people were losing their jobs again because of public health restrictions. The Minister felt there would be no issue with an €81,000 increase for one of the most highly-paid positions in the public service already. How can the Minister justify that? Did he even think about how this would look and feel to people on the front line?

I think very carefully about the way in which I discharge all my duties. I do so, I believe, in a very considered and responsible way. Some day Deputy Doherty may well be sitting in this chair and he will have to make decisions. As Minister, one does not always have a report on one's desk telling one to make the decision - one must use judement. Sometimes it is not easy but there is a real-life context within which this particular decision was made. I will not repeat all the points I made earlier on because I know colleagues want to raise other issues but there have been real-life challenges in filling senior leadership roles in health in Ireland. I am not talking about the UK or anywhere else in the world, I am talking about Ireland, in the past two years or so.

That is a reality. That is why the State has had to pay considerably higher salary, as the Deputy knows, to fill that particular role with someone of the calibre that, thankfully, we have at a time of such great challenge. I am well aware of the challenges and well aware of public concern. Sometimes you have to make a decision that you believe is the right one. Time will tell in regard to the quality of who we get, ultimately, and what impact they will have.

I know that, as others have, the Deputy has juxtaposed it with the issue of student nurses and other issues. He knows the Government is determined to resolve that issue. That is why we got the independent report to make the recommendation. We are engaging with the unions and, as the Deputy knows, unfortunately, because of the pandemic, there has been a temporary suspension in respect of the student placement of nurses. However, I believe we will resolve that issue and we will certainly endeavour to do so.

It is not just student nurses. I could give the Minister example after example. He mentioned that he received the independent report and he is engaging with the unions, and there is a process. There is always a process and it takes a period of time, and we will see what comes out of it. The problem is that, when it came to senior civil servants, just like the “super junior” Ministers, there was no process, or no process that we can see.

I ask the Deputy to conclude.

There is no independent report regarding what is suitable remuneration. There is no consultation with headhunters on the difficulty or the appropriate measure in this regard. There is nothing whatsoever. The Government plucked this number out of the air and decided to apply it. Can I ask this question?

The Deputy will have to finish, please.

I will finish on this. The Minister gave an outline to the committee in regard to what happened at Cabinet and said that the Taoiseach verbally gave a report. Again it shows the laissez-faire attitude in that there is not even a memorandum for a 40% increase in public sector pay for a senior civil servant. The Minister made the point that the issue was brought to Cabinet and it was noted. The point was made that Robert Watt would move to the Department of Health on an interim basis. Can the Minister clarify whether the salary increase of €81,000, a 40% increase, was actually brought to the attention of Cabinet? If so, can he explain why the Minister for Further and Higher Education, Research, Innovation and Science, Deputy Simon Harris, disputes that and suggests that while the issue was brought, the salary was not, and, indeed, why it is reported that the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media, Deputy Catherine Martin, raised this again at Cabinet, asking why the salary issue was not brought up?

Deputy Doherty has asked the question. I have no means of cutting him off, so I will have to get a knock-off button for him.

There is a very clear division of responsibilities. The role of Cabinet is to approve the appointment of Secretaries General, and that was done in the normal way, as it should be done. When it comes to setting specific salaries, that is a matter under legislation for the relevant Minister, which is myself. Having said that, what the Taoiseach did do was to set out in detail at Cabinet the context within which it was proposed to go with an enhanced salary, an enhanced package, for the position that was being advertised a couple of days later as part of the PAS and TLAC process. He set out that context and he informed Cabinet that there would be an enhanced salary as a result of that.

But not the salary level, as is disputed by Cabinet colleagues.

Not the specific salary level. To answer the Deputy’s question directly-----

An enhanced salary could have meant anything. It could mean a €2,000 increase, not an €81,000 increase. It is unheard of and it is really bad form. I hope the Minister regrets the decision. It is done now but I hope he regrets it.

I make the point that Ministers, myself included, make decisions every day on far larger sums that do not go before Cabinet, decisions that have implications in terms of public policy and decisions that have real-life implications. In my introductory remarks, I set out the review of the NDP at €116 billion and plans to spend €88 billion as an Exchequer this year. Every day of the week, Cabinet Ministers make decisions that they are empowered to make under statute that do not go before Cabinet. Those are the facts.

It is coming up to 5.30 p.m. and we have to vacate the room and end the meeting at that time. I apologise to members that we have not reached the European questions that they wanted to ask.

In view of the importance of the other issues the Minister mentioned in his opening statement, I ask him to come back and deal with them at an early date. A number of the members are anxious to get an opportunity to discuss those issues with him. We can consider that this matter has been debated because every member has spoken on it. That has taken us up to 5.30 p.m. I am sure the Minister understands the concern of members who want to raise other issues with him.

I absolutely understand. My Department and I are available to assist the committee in its work in any way we can. I will ask Mr. Moloney to organise that we write to the committee immediately on the national recovery and resilience plan. The Government is required to submit a plan to the European Commission by the end of April. I would value the committee's input. We will ensure that that process is put in train immediately so that the committee's voice can be heard. On an offline basis, members of the committee can contact me or my office at any time. We will provide whatever information or assistance we can. My officials are at members' disposal. I will arrange for a letter to issue to the committee, which can let us know its views on the national recovery and resilience plan which is so important to us. A total of €853 million in grants is coming our way this year and next year, with an emphasis on climate action measures and digitalisation. In respect of the Brexit adjustment reserve there is just over €1 billion which will be very important for the fisheries sector and other enterprise sectors.

I will ask the clerk to contact the Minister's officials and we will organise an appropriate meeting to deal with all that. Is that agreed? Agreed.

Before closing, I will comment generally on what has been discussed. Reform is also part of the committee's agenda. I am of the view that this whole system needs to be reformed. The correspondence from start to finish reflects a cosiness that I certainly do not like. There should be a strong dynamic between Government and the Civil Service and the public service which gives the best for the public we serve. I do not like the manner in which this was matter dealt with overall. The public is concerned about this. We were right to have this session with the Minister to air our views and make it clear that there is public concern about how this came about. We will revisit it at another stage.

I fully respect and will always uphold the right of the committee to do its work to hold me to account and ask all the questions it needs to ask. In return, I have sought to be as open as possible which is why we wanted to ensure that the documentation was compiled. I have provided everything I possibly could to the committee because I believe in an open process and open engagement and being held to account in the way the committee expects.

I expect that from the Minister. It is a pity that the openness and transparency did not play a much deeper role in the process from October onwards. I will leave it at that.

The joint committee adjourned at 5.30 p.m. until 3.30 p.m. on Tuesday, 9 February 2021.