The public sector pay and pensions bill will rise by 11.3 per cent next year to £7.62 billion from £6.84 billion, the Minister for Finance said yesterday.
But Mr McCreevy's calculations did not include provisions for concessions striking workers may win from the Government.
He said the Government had no room for manoeuvre on pay. "Unexpectedly fast economic growth which is reflected in the Exchequer position has also contributed to serious inflationary pressures," he said. So a prudent approach to public finances was required to secure competitive growth.
Mr McCreevy's provisions included an additional £32 million spending on health this year, due to the cost of settling the overtime dispute by non-consultant hospital doctors.
In all, public sector pay costs in the current year would be £147 million higher than originally estimated, he said.
Some £82 million of the rise was in education because receipts from the European Social Fund would be lower than expected. On demands for higher wages because of rising inflation, he said State workers were earning 14 per cent more than last year. This was due to income-tax cuts last April and wage increases granted under the PPF.
The £776 million rise in pay next year was greater than the £683 million rise in non-pay expenditure. Of the pay increases, £484 million was derived from the PPF and the earlier Partnership 2000 pact.
The other £292 million came from service developments and technical factors such as increments. In health, Mr McCreevy said pay would cost £358 million of the £586 million spending increase.
He added: "Some £216 million of this relates to increases under the general national agreements and other factors such as the cost of the agreement with the non-consultant hospital doctors.
"The balance of £412 million is mainly accounted for by the pay cost of developments which involve employing an additional 3,000 health agency staff in 2001, across a range of programmes."
In education, Mr McCreevy said pay would take £254 million of the £271 million increase. This was due to the national programmes and the employment of additional teachers, childcare assistants and psychologists.
Mr McCreevy will spend £37 million of the £119 million increase to the Justice group on pay. Pay will cost an additional £35 million in defence, he added.
