Brian Cowen (Laois-Offaly, Fianna Fail)

I do not accept the assertions made prior to the asking of the question.

Regarding the question itself, it is important to point out that the benchmarking process is a big improvement on the previous process, the analogue system of pay relativities. Under that system, when one category of worker obtained a pay award, there was an immediate knock-on effect for related pay categories across the service. That was not a sustainable or a good system.

The benchmarking arrangement is to provide for comparators between public service and private sector levels of remuneration in comparable jobs and areas of responsibility. The purpose behind the process is to ensure a talent pool of labour is available for both the public and private sector in respect of similar jobs of similar quality. The benchmarking body took into account the difference in pension provision that applies between the public and private sector. Benchmarking is a process; it is not a guarantee of an increase or decrease in salaries. It is a process of comparison. The private sector would contend that salary levels are beginning to decrease because of the competitive pressures on people in the sector.

One issue that has arisen in the comparisons between private and public sector pay levels at the higher end is that there is a growing disparity in absolute income levels between the lower and higher grades in the public service. It has been asked to what extent this strains the overall public service ethos. It has been commented on both inside and outside the House. It will have to be taken into consideration when determining terms of reference for the process in the future. However, the changed economic circumstances are such that the inflation seen with wage remuneration at the higher end of the private sector — the comparison made with the higher grades of the public sector — will not be a phenomenon that will continue.

The benchmarking process is a better process than its predecessor. It has provided a more transparent system, particularly with the second report, to compare like jobs with like in the pubic and private sectors. It has also taken into account the pension provision issue. At the same time, it has ensured we do not lose people from the public sector to the private sector or people not being interested in joining the public sector because of great disparities of income for comparable types of jobs. That is the broad policy context behind the process which I believe is right.

The issue for any future benchmarking process is to ensure we reflect on the fact some feel the disparity in absolute income levels between lower and higher salary grades in the public sector would become such that the natural cohesion and ethos of the service might be strained by use of the outside comparator principle since benchmarking was introduced.

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