Public servants to lose allowances in bid to cut wage bill
Salaries and Remuneration Commission (SRC) Chairperson Lyn Mengich when she appeared before the Senate Committee on Education at Parliament buildings on February 16.
Public servants are set to lose retreat, sitting and non-practice allowances in a bid by the government to tame the ballooning wage bill that has nearly doubled within six years.
The public wage bill crossed Sh1 trillion mark for the first time in the year to June 2022, after recording an average Sh72 billion annual increase since 2016.
Efforts by the Salaries and Remuneration Commission (SRC) to control the perks by scrapping fat allowances civil servants exploit to pad their monthly pay have been resisted, forcing it to postpone new guidelines on a raft of allowances.
And, with expected salary increments for teachers, who are seeking a Sh56 billion pay rise, and members of disciplined forces, the wage burden will increase.
As the monster eating into nearly half of the country’s revenues maintains a steady annual growth that is beyond the Universal Health Coverage budget of Sh62.3 billion or the Sh66 billion allocated for agriculture this financial year, SRC’s promise to lower the public wage bill appears to be a pipe dream.
The commission in October 2021 issued guidelines to cut the ratio of allowances to basic salaries in the public service at 40:60. It had found that public entities were paying up to 247 allowances, constituting up to 259 per cent of gross pay, where it should have been just 40 per cent.
“Public service institutions shall be required to furnish SRC with all allowances payable in their institutions for review, setting and advice, to ensure fiscal sustainability and affordability,” SRC stated in 2021.
Unnecessary load
“The commission will then review and issue advice on allowances to the individual public service institutions by April 29, 2022, following which the compliance checks to enhance adherence to the policy guidelines will be conducted in July 2022,” SRC Chairperson Lyn Mengich said.
But a stiff resistance SRC has faced in its push has seen it make little to no progress nearly two years later, leaving the burden to taxpayers who continue to shoulder an unnecessary load.
SRC last week told Nation that, while it has started the process of streamlining allowances among state officers, the process to control allowances among majority of government workers who form the bulk of nearly a million employees faces resistance.
“SRC has accomplished Phase I implementation in the allowance initiative, and is currently implementing Phase II where part of the cross-cutting allowances proposed for review are undergoing stakeholder and public participation, awaiting review, setting and advice.”
“In phase I, SRC has streamlined the allowances for state officers in setting the remuneration and benefits. In Phase II, SRC will review and advice on cross cutting and common allowances in the public service,” Ms Mengich told Nation.
She revealed that among those targeted for review are retreat, sitting and non-practice allowances. SRC says public institutions are frustrating its efforts with delays and litigations.
SRC had promised to review and advice state entities on payable allowances by April last year but has not done so, with the commission last week saying: “The impact on the public wage bill is long term and will only be determined after the full implementation of streamlining of allowances in the public service.”
In the year to June 2022, the public wage bill ate into 46.3 per cent of government revenues, up from 44 per cent in the previous year and 41.9 per cent in 2019/20. The Public Finance Management (PFM) Act, 2012, requires that public institutions shall not spend more than 35 per cent of revenues to pay salaries.
When the government spends excessively on salaries and allowances, development resources are constrained and affecting access to proper services.
But public institutions have shown determination to protect the allowances, as they accuse SRC of overstepping its mandate.
“Article 230 (4) of the Constitution makes a distinction between the constitutional mandate of the SRC with respect to state officers and with respect to public officers: power to set and regularly review remuneration and benefits for state officers and its power to advise on the remuneration and benefits for other public officers,” the Public Service Commission (PSC) told SRC last week.
In a letter by PSC chief executive Simon Rotich to his SRC counterpart Anne Gitau on March 6, PSC was clear that SRC cannot advise the national government on remuneration and benefits of public officers.
“In other words, and in so far as public officers are concerned, SRC cannot issue advisory without the same being sought from it. Any such manoeuvres will be tantamount to an affront on the constitutional and legal mandate of the PSC, hence illegal and invalid,” the letter went on to say.
PSC was irked by SRC’s move to propose the scrapping of non-practice allowance, during its second phase of implementation of the guidelines.
This is an allowance paid to some government workers for attrition purposes, set decades ago when such professions still had few professionals in the market, to prevent them from going to the private sector. Times have, however, changed and there are many people who work in both the public and private sectors without such an allowance.
PSC holds that SRC can only advise on the abolition and scrapping of the non-practice allowance only if state entities agree with workers and seek advice from SRC, which leaves SRC powerless in scrapping of the duplicated and redundant allowances that continue to bleed government resources.
“The PSC, other service commissions, county public service boards and county assembly service boards have not proposed to review the allowances payable to the public officers and neither has there been a consensus that the same should be reviewed or abolished.
It is only at the point of a decision having been reached that the advice may be sought from SRC,” PSC stated.
It remains unclear whether SRC will reach the third phase of engaging individual state entities to “set and advice on institution-specific allowances”, before its own set timeline of before start of July 2023. This is an action it had planned for April last year.
Previous SRC reports and other institutions including county governments and the Auditor-General have also revealed cases of ghost workers who bleed the government millions of shillings monthly.
Ghost workers
“Strengthening human resource management can reduce the wage bill by eliminating ghost workers, while improving wage bill control,” SRC’s 2011-2017 report stated.
Several counties have also revealed many cases of ghost workers, mainly where new governors were elected, while reports by the Auditor-General have flagged cases of multiple salary payments to same accounts, a possible theft of public funds.
Over the past six years, the public wage bill has risen by Sh433 billion (or 70 per cent), from Sh622.3 billion in 2016 to Sh1.055 trillion in 2022.
In the year to June 2022, the public wage bill rose by Sh56.8 billion.
