This Is Guernsey

NEXT month’s industrial tribunal to resolve the pay dispute between the States and its manual staff will have a significance that goes beyond simple labour relations.
While the tribunal members will be mandated to arrive at a fair settlement given the States’ offer of 3% and a claim of nearly 8%, the wider context will be government’s policy to contain its costs to at or below RPI.
The need for that is underlined in the Treasury and Resources’ interim financial statement which says that had expenditure continued at previous levels, it would last year have cost taxpayers at least an extra £35m.
As it is, nearly half the States’ £300m. annual expenditure is on wages and that percentage is set to rise as grants to Social Security are reduced.
This highlights the pressing need for government not only to control payroll costs but also to reduce staff numbers if it is to restrict public sector spending.
As it is, the size of the public service sector represents a double overhead for taxpayers given the introduction of the zero-10 changes and the island’s reliance on increasing the amount of tax paid by individuals through ETI to make up for that not being paid by companies.
The reason is that although ETI receipts grew by £28m. between 2004-7, States payroll costs rose by £20m., eating up the benefit of that growth and increasing the likelihood of additional taxes for islanders.
Given the States’ own decision to cap population growth, there is a further reason to slim the number of public sector employees: it would free up labour at a time when there are estimated to be around 800 unfilled vacancies and enable individuals to make a positive tax contribution to the island.
Yesterday’s announcement by the Policy Council that it is to review the operation of its own negotiating body, the Public Sector Remuneration Committee, deals with one aspect of labour relations.
But it does not go nearly far enough.

Article posted on 20th August, 2008 - 2.30pm