THE CHAIRMAN of the Higher Public Servants Remuneration Committee has voiced concerns that future generations of top civil servants may be “second division” material.
Tony O’Brien said Minister for Communications Eamon Ryan, who last week announced the Government was to open up top public service jobs to private-sector applicants, was going to be disappointed. “The pay differentials are still enormous. You may get the odd one but by and large you won’t.”
Mr O’Brien, who stood down as chairman of CC this week, said the ability and work rate of some secretaries general, such as Dermot McCarthy in the Department of An Taoiseach, was phenomenal. “And they have great minds.”
Speaking to The Irish Times, he said it was the culture 30 years ago that the cream of the country went for public sector jobs. However, he said, the private sector would "attract the cream in the future".
“I’d worry about the future, about 15 years’ time. They won’t be the cream of the nation. They’ll be the second division, and that will be a challenge for the Government.”
He said his committee at first looked at how pay rates compared with the private sector. Pay rates at the top of the private sector were way ahead of those in the public sector. “Also, private sector pensions at the top are very attractive and the public sector guys know that very well.”
He said the case for higher pay for top civil servants had been weakened by the fact their quality was not an issue. “I think it will be in the future.”
Since the downturn, the committee looked at pay rates in comparable European countries. It found Irish rates compared favourably.
Mr O’Brien said it was his view that people were motivated by the power and influence that came with being a senior public servant but he still believed “Ireland Inc” would suffer in the longer term because the pay differentials were too great.
Asked about the implications of secretaries general getting paid more than their ministers, he said he had discussed this with a number of ministers. “They certainly don’t like it but they might wear it if they had to.” He said senior ministers and taoisigh could earn more money after they left office. “But the poor old secretary generals don’t.”
On balance, he felt the quality of the thinking of a secretary general was vital to the State’s interests and, “we should pay premium rates to get the best talent we can”.
He said the committee’s examination indicated the cuts in private sector pay had been overstated in the media. “The cuts weren’t anything like the folklore would suggest, while in the public service they were very significant.”
Mr O’Brien, who was on the board of Anglo Irish Bank as a non-executive director for five years and chairman for four years up to 2002, also spoke about his time there.
“During my reign it was a winning formula,” he said. The Anglo team were “the envy of the banking world” and seemed invincible. “Directors’ loans, I can tell you, were modest when I was there.” He said that during his period there management knew that a bank needed a diversified loan portfolio. “They didn’t heed that ultimately. They fell for what they said they shouldn’t do.” The bank was “wedded to property”.
Mr O’Brien, who also sat on the board of CRH, said the company, which sold cement to the Irish market, was more cautious about the property boom. “Brian Griffin and his guys would say, ‘something’s got to give here,’ and we’d say, ‘come on, enjoy it.’ But they were issuing warnings to their board, saying forecasts had to be toned back. But the banks weren’t. They were just fuelling it.”
He said the former Anglo chief executive and chairman, Seán FitzPatrick, was a “fairly autocratic” manager. “Success gave him added freedom and licence. And the shareholders loved him. I chaired four agms and he got a standing ovation at each of them. It was a great shame that it went wrong with Anglo. It was a lovely story for so long. My heart would go out to Seán.”