Focus on Salaries commission, Treasury as study on public wage bill is released

The Salaries and Remuneration Commission (SRC) will this morning launch the Public Wage Bill Management Study in Nairobi.

The Commission undertook a study on Public Wage Bill Management with a view to establish the level of the public wage bill and the associated policies and practices that mitigate and/or exacerbate public sector wage bill. The study further sought to establish controls towards managing public wage bill.

The study was conducted by SRC, with technical and financial support from World Bank’s Kenya Accountable Devolution Program (KADP), which is funded by DANIDA, the European Union, Finland, SIDA-Sweden, UKAid, and USAID.

To further tame ballooning country’s wage Bill, The National Treasury last week announced that it will take radical reforms meant to tame the rising public wage bill and reduce pension budget which has recorded a threefold increase in the last decade.

Treasury Cabinet Secretary Henry Rotich indicated in his budget statement last Thursday the government had embarked on a process of revalidating some 270,000 pensioners whose monthly dues will cost exchequer Sh86 billion in the current financial year up from Sh25 billion in the 2008/09 fiscal year.

“The increase in the pension budget over the years is unsustainable. Between February and May we conducted a payroll cleansing exercise for pensioners to authenticate recipients of monthly pension payments,” Rotich outlined during the budget presentation at the National Assembly.

Other measures instituted by the National Treasury include the restriction of public service hiring and the cleaning up of ghost workers from the public service wage bill which accounts for a significant portion of the national governments Sh1.8 trillion allocation in the Sh3.02 trillion 2019/22 financial year budget.

“In order to contain the wage bill I propose that we limit strictly the extension of services for the significant number of civil servants who are retiring at the age of 60. We will restrict new recruitment to key technical staff, security personnel and health workers,” said Rotich.

Rotich said the National Treasury will soon roll out a comprehensive pension policy that will provide a roadmap to sustainable government spending on wages and pensions.

The draft policy is expected to have a clear guideline for the management of the pension budget, with the National Pension Policy and Public Service Superannuation Scheme further hoped will ease the pension burden on the exchequer and free resources for other critical national priorities.