Business

Ireland’s budget watchdog accuses Government of pay proposals that would weaken its position

Row over pay follows tensions about the budgetary watchdog’s criticism of the October budget

Ifac members have called on Minister for Finance Michael McGrath on Wednesday to rethink the pay plan for the council's chair. Photograph: Alan Betson

Cliff Taylor
Wed Jan 24 2024 - 17:58

The Irish Fiscal Advisory Council (Ifac), the budget watchdog, has accused the Government of bringing forward pay proposals for its chair that would weaken the position of the council and signal a lack of commitment to its work. In a strongly worded letter sent to Minister for Finance Michael McGrath on Wednesday, the members of the council have called on the Government to rethink the proposal, warning that otherwise suitable candidates to chair it may not be found, damaging the State’s budget credibility.

The council recently said that the Government had used “fiscal gimmickry” to flatter its budget numbers, a charge rejected by Mr McGrath and Government colleagues and which is understood to have angered some senior Government officials. The latest letter is sparked by a plan to increase the days worked by the Ifac chair from 30 to 96 each year, following an OECD recommendation to expand the role. However the proposal is to reduce the per-day rate paid to the chair from €684, which is assistant secretary level, to €377, the level of assistant principal. The letter says that this is “effectively demoting” the chair, introducing a rate that would not attract qualified candidates and fails to recognise the executive nature of the job.

Responding on Wednesday, the Department of Finance confirmed receipt of the letter and said it has been working with the council with a view to progressing competitions to fill the role of chair and also that of an ordinary member of the council. The chair position is currently held on an acting basis by Oxford academic Michael McMahon, who stepped in when former chair Sebastian Barnes retired. Prof McMahon plans to step down when the role is permanently filled. A Department spokesman said that it “will continue to engage constructively with the council on these matters, will consider the contents of the letter, and respond in due course”.

The letter to the Minister, signed by Prof McMahon and council members Adele Bergin and Alesandro Giustiniani, says Ifac believes the Government should agree to the expanded hours – which are less than those recommended by the OECD – and retain the per-day rate at €684, involving a maximum cost to the council’s budget of €65,664. The current annual fee of the chair is €20,520, which has not changed since 2010. The letter points out that the money does not generally go to the chair, but rather is used to buy out time from their employer, normally an academic institution.

READ MORE

The council was strongly critical of aspects of the 2024 budget, accusing the Government of “gimmickry” in its allocation of some spending plans as temporary and criticising of a breach of the 5 per cent spending rule. The criticism is understood to have annoyed the Department of Public Expenditure and Reform in particular. Mr McGrath, in a formal response on Wednesday, repeated his defence that the Government had to find a balance in the budget and rejected criticism that too much of the budget had not been properly targeted, or that the department was not transparent in some aspects of its budgetary forecasting,

Cliff Taylor

Cliff Taylor

Cliff Taylor is an Irish Times writer and Managing Editor

LATEST STORIES