Government warned to ease public sector hiring

THE Government has been warned to ease the pace of recruitment in the public sector as costs and numbers approach boom-time levels.

Budget documents reveal that the cost of employing the country’s more than 300,000 public servants will reach

€17.4bn next year.

This is just below its peak of €17.5bn, which was reached in 2009.

The Expenditure Report

2018 said that while the recent growth in numbers has boosted public services, “in the future it is likely that more modest growth in numbers will be required”.

It said that better workforce planning practices will be needed to ensure that fiscal rules are not breached.

However, the public sector pay bill will come under further pressure in the years ahead as another 5,400 new staff have been announced in the budget for next year.

In addition, a new pay deal that will boost most public servants’ pay by more than 7pc will cost €887m up to 2020.

“Over the medium term, the continued prioritisation of front-line public servants will require an increased focus on the level and composition of the overall public service workforce as well as enhanced workforce planning practices,” said the report.

The document said this was to ensure the Exchequer pay bill is sustainable and “within overall fiscal parameters consistent with the fiscal rules”.

The report said an extra €1.8bn in pay costs has been added to the bill between 2014 and this year.

It said by the end of this year overall numbers “will be approaching peak levels” – and the assessment does not count in the extra staff announced in the Budget.

According to the report by the expenditure section of the Department of Finance, public service numbers have grown by more than 3pc a year, or 8,000 extra staff, since the end of a ban on hiring imposed during the recession.

However, the document said the pay rises due under the wage agreement are sustainable and the deal provides certainty on the level of extra funding that will be required for pay in the future.

The report also said the deal had contributed to a much more stable industrial relations climate.

In his Budget speech last week, Finance Minister Paschal Donohoe announced that

1,300 extra teachers, 1,000 new special needs assistants, 800 extra gardaí and 500 civilians, as well as an extra 1,800 staff in the health sector, will be hired next year.

Meanwhile, the Government has predicted that wages will rise by more than 3pc every year across the economy up to the year 2021.

The Department of Finance’s economic and fiscal outlook estimated that pay will increase by a total of more than 13pc over the next four years.

It says that wages will grow by 2.8pc this year.

Its outlook for the following four years is positive. It predicts that pay is set to rise by 2.1pc next year, before rising by

3.2pc in 2019 and by a further 3.4pc in 2020 and 2021.