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PAC report: System of public sector allowances 'not fit for purpose'

The Committee of Public Accounts said the system “brings discredit to the legitimate expectations of public servants for proper pay and recognition”.

Chairman of the PAC, John McGuinness
Chairman of the PAC, John McGuinness
Image: Leon Farrell/Photocall Ireland

THE COMMITTEE OF Public Accounts has said that the current system of public sector allowances is not fit for purpose and needs a ‘root and branch’ reform.

It made the comments today in a report that followed seven public hearings in October and November this year.

In September, the Committee of Public Accounts agreed to seek information from public bodies on the level of allowances paid to staff. Over the past two months, those allowances were then examined in detail when the heads of the bodies appeared before the Committee.


The report, based on the findings from these meetings, makes a number of recommendations and observations on the issue of public sector allowances and the committee say it “should be positive and influential in the final decisions made on allowances”.

According to the PAC, the current system of public sector allowances “is not fit for purpose and brings discredit to the legitimate expectations of public servants for proper pay and recognition”.

The report said that the proliferation of allowances “does not meet the expectation of the taxpayer for a modern, transparent and flexible pay system capable of meeting the many challenges facing our country”.

Chairman of the Committee John McGuinness, TD said:

A root and branch reform is necessary which should see many allowances transferred into core pay and a plethora of allowances that are paid for extra duties being reduced to a small number of generic type payments that will pay the same amount to those doing this extra work. Our Report also shows that the majority of allowances go to front line staff and that for many of the low paid workers in the public service, allowances can represent a significant portion of take-home pay.

On the review of Oireachtas allowances, the Committee agreed that these allowances should be the subject of similar public scrutiny. The systems put in place in 2009 require significant change and the report calls for greater transparency with all payments being vouched or verified, said Deputy McGuinness.

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The report makes a number of recommendations, including:

  • Universal allowances that are paid to all members of a grade should be incorporated into core pay.
  • The number of allowances should be consolidated.
  • The long tail of allowances, where small allowances in monetary terms are paid to small numbers of staff, must be replaced by a small number of generic allowances that recognise specific duties.
  • All expenses should be vouched or verified, including those allowances paid to Members of the Oireachtas.
  • The level and manner of payment of Oireachtas allowances should be determined by an independent authority.

The report said that the term ‘allowances‘ is of itself a source of confusion and masks separate and distinct groups of compensation, and that there is a degree of inconsistency across the public sector in terms of what constitutes an allowance.

Regarding the HSE, the report said that:

Oversight of the voluntary sector must be improved significantly and with a degree of urgency as at present there is a lack of  accountability in respect of a significant portion of the annual budget of the HSE.

Read: Public Accounts Committee to examine HSE allowances>

Read: Howlin looking at incorporating public sector allowances into core pay>

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