THE NORTHERN Ireland Executive should freeze the total public sector pay bill to slam the brake on costs, according to one of the North’s largest pro-business organisations.
The Confederation of British Industry (CBI) in Northern Ireland believes it is time the Executive stopped “doing nice things” and started taking potentially unpopular but cost-cutting decisions.
Since it came to power, the current Executive has voted to freeze regional rates, scrap prescription charges and defer water charges.
But Nigel Smyth, CBI director, said political leaders urgently need to reduce public expenditure and re-engineer how public services are delivered in the North.
He believes in this “age of austerity” the priority for the local Executive must be to cut costs.
Mr Smyth said: “Current public expenditure has risen from £4.6 billion (€5.6 billion) in 2000 to £8.6 billion in 2010 (excluding the Department of Justice) with real increases about 3.5 per cent per annum.
“However, productivity has fallen over this period while it has increased by over 25 per cent in the private sector,” he added. According to the CBI, wages in the public sector rose by 2.8 per cent last year but fell in the private sector by 0.9 per cent.
It claims that freezing the public sector bill could potentially save about £250 million over the next two years because wages account for more than 50 per cent of public expenditure.
The CBI has identified a number of key areas which include bringing public sector absenteeism costs down to the private sector average of 5.8 days per year, which it believes could save the North £75 million per annum.
It also recommends that moves should be made to reduce the legal aid bill to comparable costs in the rest of the UK, which could save £34 million a year.
