Hundreds of senior civil servants, local authority managers, judges and other high-level officials will be denied special pay increases until late 2007, the Minister for Finance, Mr McCreevy, has decided.
In a move that is beginning to cause disquiet in the higher echelons of the Civil Service, the Minister has decided not to establish a review of top pay scales due next year.
Instead, Mr McCreevy has opted to tie the pay grades for the most senior officials into the next public pay benchmarking report, now expected in 2007.
However, the decision will not affect members of the Oireachtas, who were previously covered by the Review Body on Higher Remuneration in the Public Sector Body, because their salaries have now been linked to that of civil service principal officers.
The Minister's decision, which was revealed last week to departmental secretaries general and assistant secretaries, has been criticised by the general secretary of IMPACT, Mr Peter McLoone.
Even though he does not represent any of the affected officials, he warned that it would drive talent out of the Civil Service, and create resentment among low-paid staff when top officials are eventually given higher pay.
In 2001, the review body, then headed by the current AIB chief executive Mr Michael Buckley, recommended special pay rises of up to 33 per cent for top officials, and recommended that all should be paid at least 85 per cent of the rate received by the worst-paid private sector executives.
Warning that top public pay was "substantially out of line" with the private sector and falling further behind every year, the Buckley report warned that its recommendations did not go far enough.
"Unless there are significant increases in salary it will be extremely difficult to fill certain key top public service posts at the quality level needed to maintain momentum in the economy, improve physical infrastructure and provide appropriate social services," it said.
The latest decision should mean that the Minister will save over €30 million a year in special pay increases in coming years.
Mr McLoone said the Minister's action was unfair since the Review Body on Higher Remuneration was supposed to sit every four fours.
He added that they would have to be compensated for the six-year freeze on special increases when the next benchmarking report emerged in 2007.
"Inevitably, the benchmarking group will find that there is a deficit in the pay of higher people, and recommend increases. Inevitably, those awards will be higher than those going to lower-paid people, and this will lead to resentment."
The general secretary of the Association of Higher Civil Servants, Mr Sean O'Riordan, noted that the Minister's decision would not financially hurt TDs and senators.
"I suspect that if members of the Oireachtas were not linked to the principal officer grade, the review would be taking place every four years as normal; in the public interest of course," he told The Irish Times.
The first signal that the higher review group would not be established was given in talks last month with trade union leaders, when the Department of Finance privately said that it was "thinking" of following a different route.
However, the decision was not confirmed until the Minister's meeting with senior officials last week. This was "just when people had finished the EU presidency," one source said last night.
Every four years since 1969, the review body has examined pay for senior employees in the Civil Service, health boards, local authorities, non-commercial State bodies, Garda Síochána, and Defence Forces, as well as hospital consultants and judges. Though they will not get special increases until late 2007 at the earliest, the officials affected will be entitled to general pay increases awarded to the public service.
