Thursday, 19 January 2023
Department of Public Expenditure and Reform
Public Sector Pay
164. To ask the Minister for Public Expenditure and Reform if he has considered revisiting the current public sector pay, given the real difficulties that are faced in staff retention issues, which is having an impact on public services, particularly in health and education; and if he will make a statement on the matter. [2252/23]
It is worth noting that despite tight labour market conditions, staff numbers in the public service have continued to grow over the last number of years. Estimated 2022 public service numbers, including Local Government and the Oireachtas are 380,664, an estimated increase of almost 14,771 (4.04%) over actual end-2021 numbers.
Staff retention in the sectors highlighted by the Deputy is influenced by a broad range of factors. In terms of pay, pay in the public service has been governed by a system of collective agreements since the Croke Park Agreement was negotiated in 2010. These collective agreements have helped to ensure that public pay is managed in a sustainable way while enabling reform of public services and changes to work practices.
The current public service agreement is ‘Building Momentum’ which was due to expire at the end of 2022. As the Deputy will be aware, discussions took place last year between the parties to the Agreement following the triggering of the review clause in Building Momentum by public service unions and associations due to increases in the cost of living.
These were challenging discussions given the impact high levels of inflation are having on living standards of workers but also because of the uncertainty in the global economic outlook. The Government’s aim in these talks was to achieve a deal that is fair and affordable to both public service employees and taxpayers generally.
The outcome of these discussions was a set of proposals put forward by the Workplace Relations Commission to extend Building Momentum for a period of 12 months to the end of 2023. Three additional pay adjustments totalling 6.5% are provided for under the extension to Building Momentum over 2022 and 2023. These are:
- An increase in annualised basic salaries for public servants of 3% backdated to 2 February 2022.
- An increase in annualised basic salaries for public servants of 2% on 1 March 2023.
- An increase in annualised basic salaries for public servants of 1.5% or €750, whichever is greater, on 1 October 2023.
The WRC proposals were accepted by public service unions and representative associations.
The cost of these pay adjustments under the extension to Building Momentum is estimated to be €1.6 billion spread over three calendar years - 2022, 2023, and 2024.
This extension makes Building Momentum a three year pay deal. The extension acknowledges the higher than anticipated rates of inflation that have emerged since 2021 and in particular the impact of cost of living pressures.
The existing Building Momentum Agreement provided headline benefits of 3%. In total, including the existing Agreement and the proposed extension, headline benefits over the lifetime of Building Momentum amount to 9.5%, or just over 3% per year.
In respect of public servants at lower pay levels, Building Momentum as extended provides for increases of 12.5% over its lifetime, which is an average of just over 4% per annum.