Brian Lenihan Jnr (Dublin West, Fianna Fail)

In accordance with the recommendations of the review body, therefore, a pool of 10% of the pay bill was paid each year in addition to basic pay. The amount paid to individuals varied but, obviously, the average payment for an individual was 10%.

Some of the commentary about the operation of the scheme of performance related awards suggests a misunderstanding of how the scheme was operated. It was overseen by the Committee for Performance Awards which included a majority of private sector members. The objectives assigned to assistant secretaries, on which their performance was evaluated and the awards for individuals were approved by the committee.

Performance related pay has long played a role in driving performance in the private sector, and there could be a role for it in the public service, but current economic circumstances do not permit a performance related award system. The Government decided in 2009 to terminate the scheme of performance related pay but, as I stated at the time, this was subject to discussion with the relevant staff association on the way in which the decision would be implemented. I met the staff association representing assistant secretaries and deputy secretaries before Christmas and gave consideration to their views in deciding how the termination of performance related pay should be dealt with in the context of the reductions in pay.

In the context of the discussion at Government about the draft legislation providing for the reductions in public service pay which took place at the time of the budget, the position of the assistant secretary grade was considered. It was recognised that the draft legislation could and should allow the particular circumstances of the grade to be addressed. However, no decision was taken on the manner in which this might be done. This was left to me, as Minister, under the legislation once it was enacted. Ultimately, I decided it was reasonable that the deductions applied to the grades of assistant secretary and deputy secretary should comprise both a reduction in basic pay and a termination of the scheme of performance related pay. It must be remembered that the review body did not recommend termination of the scheme of performance related pay. The review body stated that it remained committed to this scheme but suggested that payments be suspended until 2012 and reviewed again then. In deciding to terminate the scheme, the Government has gone beyond that recommendation.

As I have stated, there were variations in the amounts paid to individuals under the scheme of performance related pay but the average annual payment was approximately €15,000 in current terms. It is simply not reasonable to ignore the loss of payments of this sort. If a reduction of 8% had been applied to the basic pay of the grades in addition to the termination of performance related pay, the average reduction would have been 18% of salary on this occasion alone, which would be higher than the deduction applying to higher paid grades. This would have been especially unfair when the review body's own research showed that on a like-for-like examination, the pay of these grades was below that of comparable grades in the private sector and was lower than that in most other countries examined.

It is important to understand in the context of this debate that the review group on higher level pay did benchmark the higher level salaries against international comparisons.

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