STATES payroll costs are rising well above inflation, despite a government pledge to control expenditure.
Having seen spending on pay decrease in real terms in 2006 and 2007, the first two years of zero-10 are predicted to see an RPI-busting wage bill.
At the heart of the new tax strategy is ‘public sector expenditure restraint’.
However, in 2008 the payroll is expected to rise by 2.3% above inflation and in 2009 by 2.7%.
Treasury minister Charles Parkinson (pictured) pointed out that pay was set by negotiation between the States and the employee groups.
‘The reality is the States on current rates finds it very difficult to recruit skilled staff,’ said Deputy Parkinson. ‘We operate in an economy of full employment where very competitive rates are being offered by the finance sector. It’s difficult for the States to recruit and retain staff it needs.’
Deputy Parkinson said it would be ‘grossly unfair’ to suggest he was not committed to the zero-10-restraint policy because he had previously backed an alternative.
Treasury recommends the overall cash limits for departments within which they can plan how to spend the money.
‘The cash limits the departments are given comply with the fiscal and economic strategy because where there are controllable-spending items, the total budget is not more than RPI,’ said Deputy Parkinson.
But formula-led budgets, such as the States contribution to the old-age pension, have broken the RPI guide.
‘I have to say the trend of pay-roll costs rising has been established for several years now. It’s something I used to comment on when I was a backbench deputy - the increases in States payroll normally cancel out increases in ETI receipts. This is a long-established tendency. I can understand from the employers’ side why costs are what they are because we’re in a competitive jobs market.’
He hoped fundamental spending reviews expected to be completed by the end of the year would help address States expenditure.
‘With an economy in which we’re trying to grow and where the States is dependent on increased taxes from employment, it’s inconsistent to expect the payroll cost in the public sector to stand still.’
He warned that if the States payroll was frozen at RPI, in the long run the States would not have any staff.
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Comment Page 18
Article posted on 18th November, 2008 - 2.30pm
20 Article Comments
Not really good enough Deputy Parkinson.
The private sector are factoring in the downturn in the economy and next year’s pay rises for most firms are likely to be pegged to inflation. There are going to be significant redundancies in the banking sector soon so the old excuse about difficulties in finding staff doesn’t wash either.
Hard times are coming and we need to cut costs now.
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I feel that it is time that the states start to question why they can’t recruit local people? I feel that the biggest problem lies within the system itself. It appears as though they feel only quality staff come from outside the Island. This could not be any further from the truth. Our states have got us into a mess which they are expecting us to pay dearly fore. Finance is not going to be our be all for much longer so this will free up the recruitment market. It is time that we started to work with what we have and stopped looking to others for answers. If we have questions that need answering then we always have and always will find the answers. It s time that we claimed back what is ours and appreciated what we have around us. I feel that too many outsiders have been allowed to rape our island and it is now down to all of us to put a stop to it! So we are all going to have to make do with a bit less. Good! We will all start to make it go further then. A much better quality of life is just around the corner for the majority of us!
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I think we can safely assume that the increase in payroll cost is not due to above inflation pay rises for individual staff.
One can only assume that now the manpower cap has been lifted many new jobs have been created.
Maybe the press would like to publish more figures so the full story can be seen. Where are all these extra posts?
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Some States departments are desperately short of staff while others are overmanned. Department heads hold on to staff they don’t currently need against a time they are needed as the work load varies considerably.
There needs to be much more flexibility moving staff between departments as needed and the staff themselves must get out of the ‘job for life’ mentality and be prepared to move from job to job.
As States workers are paid by grade this should not entail any loss of pay or conditions.
The States also have too many ‘chiefs and not enough indians’ Modern businesses have a much flatter management structure where the most important people are those dealing directly with the public.
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Interesting points, however Sheila should remember that many states employed civil servants are on licence and cannot change jobs without loosing their licence to live here.
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To AD
Only essential workers like teachers and nurses are here on licence and I don’t see why they should not be able to be moved from one school to another especially with new schools opening.
I was, however, thinking more of civil servants and office staff and if there are more than a small minority of people with special expertise here on licence then I would like to know why.
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And therein may lie the answer to the huge payroll costs. Licence holders who are entitled to extra benefits and a better pay package. There are local staff who could do the jobs and probably would come from the private sector to the pubic sector if they had the equivalent package as a licence holder.
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Paul
Fact is - the majority of people who are appropriately qualified come from off island, simple as that.
There are very few true Guernsey folk (families born from the 1940’s onwards) who could do the technical jobs.
The influx of banking in the 1980’s brought a lot of 15 year licences; these people are now ‘locals’ and offer high quality labour.
Local Guernsey folk are generally slow off the mark, unwordly wise, and racist.
What else can I possibly say?
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Hmmm - bit of a generalisation there Darren.
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Nice sweep of the brush there Darren, do you have some feathers to go with that statement?
I consider myself neither slow, racist nor unworldly wise (which I think is what you were trying to say).
Cautious and Sheltered yes and and this is both a blessing and a curse. I accept the fact that Guernsey does need immigation to maintain the high skill levels that we have and I for one and happy for this to continue.
However the terms for immigration need to be reviewed and we need to move away from the licening system that means essential staff are constantly being rotated out the island.
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Darren: what a load of twaddle!
We need to get away from the assumption that all Guernsey folk are idle and thick! Many of us are very well qualified with a strong work ethic and that includes public sector workers.
Your sweeping statement could be considered racist! Turn the statement around and i would like to ask you why someone who is well qualified and successful would give up a good career in the UK to come to this ’sleepy hollow’ for 5 years ………. I suggest it is because they are not that successful and come here for an easy ride as once here they cannot easily be got rid of until their licence runs out. I have heard of several people over the years who were signed off fairly quickly after arriving (stress related) and then spent years claiming sickness benefits until they were pensioned off early - at the Guernsey tax payers expense.
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Truth hurts I always say.
Let’s face it, if we could fill the vacancies with qualified people we would, but we can’t.
Typical Guernsey approach to risk based decision making.
The local people of Guernsey cannot cover the employment gap on the island (i.e. fill the roles that require qualified people).
This is not to suggest Guernsey folk are stupid, on the contrary it is to suggest that the amount of work is so diverse that a small economy cannot accomodate the demand on workforce.
As is typical of our island everyone becomes defensive.
We rely on overseas skilled migrants, get over it.
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Ebenezer - I say it as I see it, most Guernsey folk call people from the UK ‘Mainlainders’.
This is racism as it classifies people according to their origin.
Get over your ego my friend, people come here and work hard, pay their taxes and get told to leave.
The receive NO BENEFIT from providing 1, 3 or 5 years of their lives.
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Interesting the comments but its not all a bed of roses working as a civil servant if a private sector worker had a payrise due on a given date it would happen
the public sector workers should have had their settlement in May and are only now getting it in there wages these are some of the lowest paid workers on the island…..
the rest of the civil servants have not even had their pay award 9 months later
public secror renumeration commitee needs to get its finger out and states members need to ask why such basic things are not done on time
many people move to the private sector because you do get overtime, bonuses, medical care and other benifits never mind basic wage rise at least on time…….when did an individual civil servant have a pay rise over RPI?
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Darren - I criticised you for your earlier statement that “Local Guernsey folk are generally slow off the mark, unwordly wise, and racist”.
I have just read some of the postings on the Blog regarding Flouquets latest gaffe - maybe you are nearer the mark than I gave you credit for.
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“many people move to the private sector because you do get overtime, bonuses, medical care and other benifits never mind basic wage rise at least on time…….when did an individual civil servant have a pay rise over RPI?”
They get moved up a grade instead, Mike. It’s better than RPI, and all they have to do is stay put for long enough.
Then there’s that nice pension scheme.
In my experience as an employer, those leaving the CS are often somewhat shocked by having to take some actual responsibility for their actions in the private sector. No profitable work equals no pay out here; no taxpayer to pick up the tab.
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Its all very well stating that people working for the states recieve a nice pension but they do pay for it,its not free! As for the wages well all I can say is more money is wasted training new staff than would be spent if the staff they have now remained and recieved a respectable wage. Its money just thrown away when £1000s are spent on training only for this person then to leave and get a better paid job in the privet sector.
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Tom,
You ststed “only for this person then to leave and get a better paid job in the privet sector.”
Presumably in a “hedge” fund?
Firstly, the problem has been caused by the States passing so many laws over the past 15-20 years, many of which are not vital. These should be repealed and then the staff who administer them can go.
Secondly any post with a highfaluting title should be axed as they are invariably manned by jobsworths. ( or should that be womened or even personed?!!!) Isn’t this equality thing a nonsence when carried to illogical extreems.
Incidently why are not vicious jokes about George Bush deemed racist by the media? Is it impossible to be racist about a WASP>?
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Bob
Getting moved up a grade just doesn’t happen, you usually have to apply for a new job and go through an interview process.
With regards to responsibility well I’ve got experience of both the civil service and the private sector and the private sector is an easier life. As a senior executive officer I was responsible for making decisions which affected many hundreds of Guernsey folk. In the private sector there’s always someone higher who can take the decision.
It doesn’t affect me anymore but the civil service deserve an above rpi rise and they also could do with less of the idiotic comments from people who don’t really know much at all about the civil service.
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A question for Bob - if the Public and Civil Service sectors are so wonderful to work for and treated so well why are the private sector workers not fighting to get in when jobs are advertised??
Could it be that they prefer bonuses, health schemes, medical cover, not having to pay a compulsory 6% of their wages into a (failing) pension scheme, a basic RPI wage rise on time and above all far better wages in most cases?
If you think its that good you should try it sometime!
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