Economics: Some commentators take the view that the pay increases awarded to public servants under benchmarking should not be paid on the grounds that we cannot afford them. I disagree.

Why? Because I believe that affordability provides too narrow and too ill-defined a calculus for making such a decision.

On the one hand, it conveys the notion that, if only the Exchequer was teeming with money as in the late 1990s, how the awards were arrived at (e.g. their rationale on distributive or labour market grounds; the transparency of the process) would be irrelevant.

On the other hand, who says we cannot afford them, even in current relatively straitened circumstances? What if the 9 per cent average pay increase could be offset by a 9 per cent reduction in the numbers employed? Could we afford benchmarking then?

Or, what if the 9 per cent pay rise were accompanied by a 9 per cent increase in the quality or scope of public services provided? Who can say that in such circumstances taxpayers would not be prepared to pay higher taxes?

In theory, the benchmarking process as amplified in the latest partnership agreement, Sustaining Progress, is supposed to deliver something along the latter lines, in so far as 75 per cent of the increase awarded to each public service grade is to be conditional on the delivery of change and modernisation.

In other words, the greater part of the pay increases is supposed to be accompanied by productivity-increasing or service-enhancing measures.

I heard Pat Rabbitte make an interesting contribution to this debate on the Last Word on Tuesday. He argued that the benchmarking awards should be paid because they were part of a deal. However, he was quick to add that the other part of the deal was the package of productivity-improving measures, and that both parts had to be fulfilled.

I have some sympathy with this view. In general I think that deals should be honoured. In particular, I think we should be slow to revoke deals involving public institutions, the credibility of public institutions being the valuable (and increasingly scarce) commodity that it has become.

That said, not all deals are good deals and some are so bad that the public institutions concerned discredit themselves more by fulfilling their terms than by repudiating them. Might the deal on benchmarking fall into this category?

No fewer than 25 pages of Sustaining Progress are taken up with setting out the change and modernisation agenda to be addressed in association with the pay agreement. There's plenty of good sensible stuff here, but a great many of the conditions that attach to the pay awards fall into one or other of the following categories:

Changes that will clearly and directly benefit public servants themselves (for example: enhancement of promotion opportunities; improved training and development for staff);

Changes and initiatives to which public service unions committed themselves in earlier pay agreements and, to that extent, have already extracted compensation for. Examples here include the putting in place of performance management and development systems and the holding of parent-teacher meetings outside normal school time;

Changes that will allow public service employers to more effectively address skills shortages, such as the more general application of open recruitment policies and the greater use of merit-based promotions.

It is not obvious that the taxpayer should have to pay public servants more for the adoption of any of these sorts of change. The fact that such compensation is required may be taken as little more than a manifestation of the crude bargaining power that public sector unions wield.

Of course, the agreement also envisages reforms that would result in changes to public servants' terms and conditions of employment and at the same time improve the quality of service to the public. In such circumstances, compensation for change has a much firmer basis in justice.

However, in many of these cases, the commitment given in Sustaining Progress is a commitment to discuss or review rather than to deliver a concrete result. Examples here include extending the time span during which normal daily hours are worked in the health service and making arrangements for the delivery of in-service training to teachers outside normal school time.

Overall, it seems fair to conclude that the modernisation and change package contained in Sustaining Progress would, if delivered, perceptibly improve the functioning of the public service, although not to an extent commensurate with the €1.1 billion cost of benchmarking.

In this respect, the public service trade unions have driven a hard bargain.

Amongst the reasons they have done so is because they believe (or choose to believe) that the benchmarking awards were required to restore pay equity with the private sector and that, as such, they should not be conditional on productivity increases.

It is to be expected that the same belief, which exists without a shred of supporting evidence, will animate ongoing resistance to the productivity side of the deal going forward.

This makes it all the more important that an effective means of ensuring compliance with the deal is put in place. Here the agreement provides for an extraordinarily elaborate verification process, the lynch-pin of which is supposed to be the Performance Verification Groups.

These groups are to comprise equal numbers of management, trade union and independent members. The inclusion of independent members is presumably designed to give voice to the taxpayer/consumer interest.

On paper, the arrangements look good; in practice there are several problematic aspects.

One is that the groups have been set up at least two months behind schedule, an interval of time that is far from trivial considering the volume of work that must be done between now and December.

Second, there are so many other actors involved in the verification process (Local Partnership Committees, National Councils, the Public Service Monitoring Group, the Public Service Sub-Committee of the National Implementation Body etc) that there is a real danger that the performance verification groups will be swamped.

Third, it is not the verification groups that will make the decision about whether pay increases are actually made: that decision will be made by the relevant Department's Secretary-General. And, in the event that the Secretary-General disagrees with the verification group, we may never get to hear about it because, as things stand, the deliberations of the groups are not subject to the Freedom of Information Act.

From experience, I think that the public interest is given the greatest influence on the outcome of such processes, not by the insertion of a couple of independent people into the proceedings but by ensuring that the business is conducted in an open and transparent way.

The independent members of the performance verification groups may fancy themselves as watchdogs but their barking will be to no avail if no one can hear them.

That's where Freedom of Information kicks in. And let no one say that the legislation constrains these groups to be excluded from the ambit of Freedom of Information Act (FOI). That's simply not true: whether to make their proceedings FOI-able or not is a matter of political choice.

What is at issue here is something much more important than budgetary considerations.

What is at issue is the credibility of our public institutions and the integrity of the relationship between the State and the taxpayer.

Jim O'Leary lectures in economics at NUI-Maynooth. He served as a member of the Public Service Benchmarking Body until he resigned in April 2002. He can be contacted at jim.oleary@may.ie