Jim O'Keeffe (Cork South West, Fine Gael)
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Question 99: To ask the Tánaiste and Minister for Finance the cost to the taxpayer of the benchmarking process to date; his views on whether the benchmarking process has not delivered the promised programme of public service reform to date; and if he will make a statement on the matter. [23537/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The first Public Service Benchmarking Body was established as an independent body in July 2000 under the terms of the Programme for Prosperity and Fairness to examine public service pay and jobs by comparison with the private sector. The Body reported in June 2002 and recommended varying levels of pay increases for the grades examined, with the average increase being 8.9%. The cumulative cost of implementing the recommendations of the Report was approximately €1.2bn in a full year.

The Benchmarking Body, in their first report, recommended that, apart from the first quarter of the award, the payment of the balance should be dependent on real and verifiable outputs from modernisation, flexibility and change. This was endorsed by the social partners in Sustaining Progress. It was also agreed that the final two phases of the benchmarking increases should be conditional on satisfactory implementation of the modernisation agenda and the maintenance of industrial relations stability.

It should be noted — and this is a point that has been repeatedly misunderstood by some — that there is not nor was it envisaged that there would be a direct correlation between the cost of the benchmarking increases and the "value" of the change measures implemented. The levels of the benchmarking increases recommended were determined on the basis of comparison with the remuneration of jobs of comparable weight in the private sector (taking account of relevant factors such as security, pensions, perks, etc.). The change agenda as set out in Sustaining Progress and subsequent action plans reflected the priorities of the various sectors. The Government in the negotiations insisted on and secured agreement to payment of the various pay increases being conditional on progress on the change agenda and on commitments on industrial relations stability.

Benchmarking has been accepted, by both the employers and unions, as a significant improvement on the old pay determination system which was based on relativities whereby if one grade or group of public sector workers received an increase it led to leapfrogging and catch up claims right throughout the public service. The pay increases provided for in Towards 2016 are, once again, predicated on co-operation with change and modernisation initiatives as well as improvements in productivity right across the public service.

The agreement builds on the progress made under previous partnership agreements and reaffirms commitment to the further development and accelerated implementation of modernisation frameworks in each sector of the public service in order to secure the flexibility required to achieve the highest international standards. It provides an important framework for meeting the economic and social challenges ahead and builds on previous achievements in areas such as:

more responsive and better quality customer services;

better management of performance — individually and organisationally;

better financial and human resource management;

greater flexibility and openness to change.

Critically, Towards 2016 sets out a mechanism for the verification of progress at sectoral, organisational and grade level in the public service through the establishment of Performance Verification Groups — PVGs — for the Civil Service, the Health, Education and Local Authority sectors, and the Garda Síochána and Defence Forces. Under the terms of the agreement, the PVGs are required to satisfy themselves on progress in relation to co-operation with flexibility and ongoing change, including co-operation with the satisfactory implementation of the agenda for modernisation set out in the agreement, the maintenance of stable industrial relations and the absence of industrial action in respect of any matters covered by the agreement before recommending the pay increases provided for under the agreement.