09 May 2008
Northern Ireland's public sector is too big and too well paid, according to Sir David Varney's review of competitiveness in Northern Ireland, carried out on behalf of the Treasury. The review could lead to pay cuts of 20% and tens of thousands of job losses.
'The public sector pay process [should be used] to reduce the public-private sector pay differential over time,' says Varney, who calculates that pay in the public sector is 20% higher than in the private sector.
He also reports that 28.3% of all Northern Ireland jobs are in the public sector, compared with 19.6% in Britain. More than 68,000 public sector jobs would be lost or subject to privatisation if Northern Ireland's public sector employment rate were brought into line with the rest of the UK.
Varney's report stresses the need for much higher levels of infrastructure investment, welcoming existing plans for spending £18bn on upgrades. But he argues that more and quicker investment is required to improve productivity and create jobs, particularly outside Belfast.
Greater private sector investment should be encouraged, supported by the sale of more public assets, the report says. Assets mentioned as candidates for privatisation include the Housing Executive, Belfast Port, the Driver and Vehicle Agency, the Water Service, car parks and the bus and rail services.
The report points out that while UK central government owns £4,940 of fixed assets per capita, the figure for the Northern Ireland Executive is £21,550.
Other reforms proposed include privatising many existing public services; creating a single employment support and benefits administration agency; improving skills training for 14- to 19-year-olds; and speeding up the Performance and Efficiency Delivery Unit's review of the Planning Service.
The report's conclusions were rejected by Nipsa, the largest Northern Ireland public sector union. John Corey, Nipsa general secretary, said: 'There is simply no evidence whatsoever to support the claim that public service pay levels damage the private sector. Public servants here are paid no more than public servants throughout the UK doing the same jobs. We reject, as well, the claim that the public sector “crowds out” the private sector.'
Corey argued that the size of the Northern Ireland public sector was proportionate to that of the rest of the UK in terms of population.
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