Public sector pay bill to jump €1bn next year as workforce to hit 410,000

THE bill for public sector pay and pensions is set to rise by more than €1bn to a new peak next year.

Wages for State workers and payments to pensioners will hit a combined total of €23bn.

The pay bill is expected to increase by just under 5pc, or €925m, to €19.6bn. Pension costs will jump 5.2pc, or €166m, to €3.3bn.

The number of public servants is also set to rise to 410,000 by the end of 2025 – a 24pc hike on last year – according to a Department of Public Expenditure and Reform review.

The number of State workers will reach 342,000 by the end of this year before jumping to 350,000 next year. The review said the gross Exchequer pay bill at €18.7bn this year makes up 31.5pc of all spending and is driven by the numbers employed and their pay.

Economist Colm McCarthy said the €1bn increase is a combination of factors including special pay awards to some groups, while increments paid to State workers on a yearly basis are “chugging away all the time”.

He said gardaí and nurses and other groups “got in first” to get “a few quid” and union leaders find it difficult as they must then try to get the same for their members. He is concerned at overall levels of debt.

Economist Jim Power said the numbers are not shocking. “It’s a natural consequence of where we are in the economy. You can’t blame the political system for this – it’s what the electorate wants, more gardaí on the streets, more teachers, more special needs assistants,” he said.

Neil McDonnell, of Isme, said its proposal to reduce the gap between public and private sector pay to 10pc by 2025 “looks completely infeasible now”.