SINCE publication in early 2008 of the Robinson report on the role of the States as employer, the conduct of the Public Sector Remuneration Committee – government’s pay negotiator – has been under intense scrutiny.

The reason is the report unequivocally supported the view that ‘the committee is widely regarded as being excessively adversarial in its approach to negotiations, and insufficiently supportive of departmental needs and priorities’.

Since then, the failure of PSRC to deal with the airport firefighter dispute has been revealed and it is, as constituted, on death row.

So although it has not contributed to improving industrial relations, it has saved the taxpayer millions over the years and deserves praise for that.

However, the ‘new’ PSRC that emerged after the old board resigned over the firefighter debacle also deserves recognition for its groundbreaking settlement with civil servants, which was concluded late last month.

Behind the pay freeze for 2010 – itself believed to be a first for the States – there is a sophisticated package that will, with skill and goodwill on both sides, ultimately enable a long overdue modernisation of the public sector.

While moving towards RPIX, the familiar cost of living index minus mortgage interest payments, is a significant step in its own right, the three-year deal is more exceptional for other reasons.

For the first time, the concept of performance linked to corporate objectives (in this case, hitting targets on spending) has been introduced and accepted and a three-year deal gives time for other reforms to be pursued without the 2012 general election getting in the way.

Admittedly, the ‘zero rise’ for this year actually means deferring it until 2011 and any performance bonus would be new money so this isn’t a taxpayer 1, civil service 0 situation. And that, too, is significant.

This settlement is partnership based with both sides looking to benefit from the reforms, particularly of making managers more accountable, more responsible for driving efficiencies and for linking individual pay and progression to performance.

And it is no coincidence that the first bonus is tied to States – not departmental – budget performance. Ending the silo mentality has also been priced into the settlement.