Review Body on Higher Remuneration Post author By Karl Whelan Post date December 11, 2009 The Department of Finance has now released the report of the Review Body on Higher Remuneration. The report here and a summary is here. Categories In Fiscal Policy Tags Public sector pay 15 Comments on Review Body on Higher Remuneration ← AIB and BOI Oireachtas Submissions → Honohan on Systemic Risk 15 replies on “Review Body on Higher Remuneration” It appears that the Taoiseach was cut in excess of the recommendations while Ministers were cut to the extent recommended. Ministers should have gone further than the recommendations. Their 15% + 7% levy does not impress me. the 15% takes into consideration the 7%, (i.e. 7% plus 8%) – doesn’t it? Some thoughts: 1. It is interesting how it goes to some length to point out that the public sector posts under review could, in some cases, be considered to lag behind the private sector. The oft-cited ESRI review is picked apart much more to highlight how the gaps are much smaller at the higher end. 2. The other thing that strikes me, as ever, is the lack of strong data on the labour market – relying on an IBEC survey to make a judgement call on the private sector labour market is a little sad. 3. Freeze until 2012 will put real wages well down if inflation ticks upwards over the 2010 period. In fact I don’t see why it was the brief of this committee to recommend anything on the duration between pay reviews. It does take review out of the hands of this current Government I guess. 4. The recommendation not to consider performance related issues will sit at odds with the reform agenda for the public sector. In fairness, my tongue is partly in my cheek in making that comment….but only partly! 5. The extrapolation from the posts under review to all posts across the public sector within the salary bands is very blunt but perhaps no other way to do it really in the time frame. It is in sharp contrast to the Report 42 where the international market nature of some positions was considered – academic posts being one example. That element seemed to have been ignored, again understandably given the task at hand but it is a pity. On the international comparison front…why select the “comparable EU countries” as Austria, Belgium, Nederlands and Finland….while leaving out Portugal and Greece. Hmmmm. I wonder. For the large countries, why choose the UK and Germany…instead of say France, Italy or Spain. Hmmmm. I wonder. Where are the workings to show how the calculations are arrived at? Scientifically based, unbiased…anyone? anyone? @Cillian And to alter for cost of living when the whole point of the exercise is to reduce the cost of government and thereby reduce the cost of living? The benchmarking against public servants from selected other countries is being twisted even more than the benchmarking against selected private sector companies… Heads I’m underpaid, tails I’m not overpaid… One item I found interesting was how the actual report and the summary appeared to differ in respect of the High Court Judges remuneration issue. The Report: “While the position of High Court Judge has been part of our review, the Review Body is aware that constitutional issues arise in relation to any reduction in the remuneration of members of the Judiciary.” The Summary: “The Review Body noted that there is a constitutional prohibition on a reduction in the pay of members of the Judiciary and stated that if it were not for that, they would have considered a downward adjustment in the salary of High Court Judge (which was one of the sample groups examined).” So the report states in a vague way that it noted there were “constitutional issues”. But the Summary is in no doubt.. “there is a constitutional prohibition” Maybe it was the opinion of the AG but I don’t see that mentioned. As I said in another post elsewhere, former Supreme Court Judge Donal Barrigton is of the view it is not unconstitutional, so I guess his opinion in this case must carry some weight. What exactly does the constitution say – obviously from Donal Barringtons comments it is not so cut and dried. Unfortunately it can only be tested by those with vested interests – sort of turkeys voting for Christmas if they find no constitutional problem. @Colm “1. It is interesting how it goes to some length to point out that the public sector posts under review could, in some cases, be considered to lag behind the private sector” Why the pay in the private sector should be of any interest in calculating remuneration in the PS is a mystery to me. @Aidan I agree, actually, that the public/priv comparison stuff is largely a red herring, as is the benchmarking exercise broadly. I perhaps have skewed view in that there is not a private sector comparator for my job (uni prof). Previous reports in dealing with this segment of the public sector noted how the job of an academic had become more competitive, and folks hard to find, in comparing the markets for academics in other countries and in particular the hiring pool we are competing with (mainly the UK and US). That is a fact. It did not compare the salaries of, say, academic economists with what I could earn in the private sector as an economist. But in some ways what is it doing at all comparing salaries of people at all. Again, in my sector, routinely in the UK, US, Oz universities the salaries paid vary dramatically for something called a ‘Professor’. What I, say, earn is a matter for me and the University to negotiate. I may have strong bargaining power (great research record, great teaching record, lots of grant income that makes me cost neutral, a discipline in high demand, or even a competing offer that is credible) or I may have a weak bargaining position. C’est la vie. Hence, when someone is joining a Department as an academic in the UK they will very often earn more than folks there for quite a while with CVs that are just as good…and moreover these incumbents will often have negotiated the offer. Or, when someone is an economist they may get a better offer than an historian. That is just how it is. One could see the same being true throughout the class of jobs being discussed in this report. Interestingly the UCD and TCD Presidents get paid more than the DCU and UL Presidents (justified in report 42) and now that is reversed. Maybe they should get paid more, maybe not, but surely we don’t need a review body to look at that? Should all Sec Gens get the same? Should all Asst Sec Gens get the same? There is no real logic for that at all. To see all this in a positive way – one could see this as a ctrl-alt-delete for what should be the upper, skilled, area of the public sector. It flattens things out, and drop it down a level. As the system ‘reboots’ we need to avoid the sort of relativities, equalizing and artificial equalities within. If we don’t we either will start to raise all salaries again (back to square one) or we will freeze them and start to lose good people from this cohort. @Colm Harmon “3. Freeze until 2012 will put real wages well down if inflation ticks upwards over the 2010 period. In fact I don’t see why it was the brief of this committee to recommend anything on the duration between pay reviews. It does take review out of the hands of this current Government I guess.” That’s so if people complain about higher level salaries still being too high, Vader can tell them he is just following the recommendations of the commission and say they should not question the integrity of the commission members. That’s how this country’s establishment works: “I am trousering this huge amount of money with the utmost of integrity.” Thought that it might be appropriate to mention a personal submission to the Review Body in 2006 urging that it to take account of international comparisons. It suggested that “there a good grounds for suggesting that an international comparison would be far more relevant than any comparison with the private sector on account of the uniqueness of most public sector jobs and their isolation and insulation from “market” forces that apply within the private sector.” The submission is at http://www.planware.org/briansblog/resources/Review%20Body.pdf @Brian Flanagan Very well written and thought out submission of yours. So tell us what do you think of the outcome of this aspect of the study? http://globaleconomicanalysis.blogspot.com/2009/12/six-figure-federal-salary-gravy-train.html Michael Shedlock getting shrill on US Fed salaries vs the private sector. The talk of pay is just political correctness and misses the point of quality servants of the state. How much value would there have been in someone who pointed out that AngloIrish was bust? Saving the country a few 000,000,000 euro? I see no incentive for anyone to jeopardize their “career” for this. What happened to the rule that all Asst Sec, and above, appointments were for 7 years only? Quality was important. Now it is all about spin. Have any of these senior servants demonstrated integrity? Did they point out to the pollies what was likely to happen? Why keep the deadwood in place?? It is just a way of keeping the truth hidden! Is integrity important in a public servant? How do we ensure that we get it? In times where they are stutorily forbidden to offer opinions contrary to their masters? @Cillian In answer, my submission to the review body was clearly ignored in their 2006 report. I have not yet studied the 2009 report yet but sense that it has not gone far enough in its recommended cuts. However, it must be emphasised that, despite the severe recessionary environment, pay at the top echelons of the private sector remains well ahead of that for public service jobs of comparable weight. True but I would guess that there is a strong concentration in the sheltered sector, which relies for significant income from the public sector. The four wealthy semi-retired individuals from the private sector, responsible for the latest report, were part of a bigger group in 2007, who more than two months after the onset of the credit crunch, recommended a pay hike of 25.2% for the SG of the Dept of the Taoiseach, who was in charge of the “benchmarking” process; 22.5% hikes for the heads of State enterprise agencies – – Why the head of a small agency, Forfás, responsible for producing reports, should rank at €247,00 with the much more important role of head of IDA Ireland, is not explained; 30.6% for the head of NUI Galway, 19% for the other university heads; judges 15.5% – 22.4%; Taoiseach 14%; Ministers 12%; DPP 27.5%. These hikes with the average “benchmarking” payment of 9%, were in addition to the partnership rises. The 2007 report notes: The Department (of Finance) stated that it was not aware of any evidence that there have been difficulties in recruiting senior staff or in retaining them.” The report said: “We concluded that the demands of the post of Dublin City Manager have grown to a very major extent in terms of diversity, scale and complexity. This warrants the salary of the post being placed at a higher level relative to other senior public service posts than is currently the case resulting in a substantial increase in salary.” The pay hike was 36.2% to €250,00 even though the incumbent was about 18 months in the job – – no evidence was presented that there had been a shortage of qualified insider candidates for the job, at the exising salary. There is a common but convenient fiction that the bigger an organisation is, the greater the demands on the head or senior mangers. Middle managers are often the ones who have the most hassle and stress but for example, what head of a department, company or president of a university, would be honest about having a doss job compared with others down the pyramid? Comments are closed.