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The National Treasury offices in Pretoria. Picture: RUSSELL ROBERTS
The National Treasury offices in Pretoria. Picture: RUSSELL ROBERTS

The public service wage bill has become an albatross that the government just can’t seem to shake. It has also become the elephant in the room in a trending public conversation about professionalising and depoliticising the public service, even before Covid-induced belt tightening.

The problem is that the manner in which the “unsustainable' and “bloated” wage bill is discussed remains locked in adversarial binaries between what the state can afford and what public sector unions are prepared to accept. This often degenerates into tactical posturing between the parties around percentage increments and the threat of legal action.

Public debate on the wage bill often paints unionised public servants as being grossly over-compensated relative to their performance, caricatures the motives of public service unions, and in the context of deteriorating public finances, enables the state to project fiscal discipline. But, this oversimplifies the issue by punishing front-line public servants delivering absolutely essential services, and overlooks the real problem which is an inflated and inefficient management corps.

The compensation of employees, estimated by the National Treasury at more than 35% of consolidated national spending pre-Covid, has been one of the fastest growing components of government spending. The catalyst behind this trend has been gains in remuneration and benefits and not burgeoning personnel numbers, which has largely plateaued since 2012. In a context of anaemic growth, sustained frustration over service delivery, mounting debt servicing costs and ambitious capital spending plans, this presents the government with a make or break scenario which it has already acted upon. The state precipitated a legal dispute with public service unions, in 2020, over the payment terms of a multiyear wage agreement negotiated in 2018. This has soured the atmosphere around the latest round of wage negotiations, and increased the prospect of strike action.

The problem with how the wage bill is publicly perceived and practically negotiated is that it projects an overly narrow and distorted image. The wage bill is reduced to a total measure of the public sector’s cost to the fiscus, without acknowledging that it is, at any one point in time, a function of the staffing composition of the public service. This means that the wage bill, if viewed in isolation, represents only a blunt proxy for inferring anything about the real capacity and performance of the public service.

In a recently published paper with colleagues at the Nelson Mandela School of Public Governance at UCT, we highlighted the disproportionate and unbalanced growth in the distribution of public service personnel, which has significantly benefited middle as well as senior managers at the expense of skilled front-line public servants (including in local government), resulting in a top-heavy public service that constrains delivery capacity on the ground. It is precisely this scenario that explains how the minister of public service & administration, quoted in a Cape Times article (March 5) last year, can claim that the public service was not “bloated” in terms of its employee numbers — citing shortages of educators and nurses, but where the perception of bloat was driven by unsustainable increases in the wage bill. If both of these things are true, then how can reining in the wage bill solve capacity shortages on the ground in the absence of wider personnel reforms? The answer is that it won’t. In a recent Sunday Times opinion piece (May 16), Duma Gqubule argued that the government’s “austerity” driven attack on the wage bill is likely to worsen existing personnel constraints in key social services such as education and health care.

To manage the wage bill in a wider context, public service reformers should consider embarking on something akin to the “right-sizing” process undertaken in the mid-1990s, which formed part of the post-apartheid transformation of the public service. As many observers will remember, this process was flawed — resulting in the departure of too many skilled public servants and the retention of too many officials who were not fit-for-purpose in a rapidly changing policy environment.

But today’s circumstances are not what they were in the mid-1990s. Transforming the public service in a fog of political mistrust, racial representivity, major institutional restructuring and dramatic policy shifts no longer complicates the mission. The focus now should be on reviewing employment posts across the public service with the aim of prioritising growth among skilled front-line public servants at the expense of the managerial ranks, while trying to work within a fiscally sustainable wage envelope.

This will neither be easy or quick but is a more viable means of trying to reconcile compensation pressures with real capacity needs on the ground, and reducing the acrimonious tenor of wage negotiations in the public service.

• Dr Naidoo is a senior lecturer in public policy and administration at the University of Cape Town.


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