An independent commission should recommend levels of public sector pay and pensions as well as ways to increase productivity, according to a Fine Gael think tank.

The commission would operate along the same lines as the Low Pay Commission, established to recommend a minimum wage level to the Government.

As is the case with the Low Pay Commission, the government of the day would not have to accept its recommendations.

The Collins Institute, established by Taoiseach Enda Kenny, also says all State bodies should be reviewed to see which ones could be moved from the public sector or civil sector to being owned by employees or people who use their services. It calls the proposals “a legitimate alternative to privatisation”.

The institute has been established by Fine Gael as a think tank which operates independent of the party to produce policy ideas and papers.

Fine Gael at least partly funds its operations and it is due to publish its first report today.

While it produces policies and papers, Fine Gael does not have to adopt any of its findings as party policy.

Seanad proposals

The Collins Institute’s first document is called “Citizen Government: Political and Public Sector Reform in a Just Republic” and also includes proposals for a directly elected Seanad.

It calls for a “public sector remuneration commission” and says: “The introduction of very significant pay increases for public sector employees, without credible benchmarking and a specific link between wage increases and productivity improvements, was one of the key public policy failures of the Celtic Tiger.”

Fine Gael’s opposition to benchmarking during the era of Fianna Fáil governments is consistently cited by Taoiseach Enda Kenny and Minister for Jobs Richard Bruton as one of the party’s distinctive political positions during the boom.

The institute, headed up by party adviser Seán Faughnan, says “it is vital that Ireland does not repeat the same mistakes as the economy recovers”

The public sector pay commission would make “detailed and specific proposals for how productivity improvements can fund a significant proportion of future increases in public sector remuneration”.