Summary:
- The Salary and Remuneration Commission (SRC) guidelines are aimed at taming Kenya’s growing public wage bill.
- “Allowances and benefits that are abolished will cease to apply to any new employee in the organization or new to the grade,” the SRC announced.
The exclusion is contained in a draft allowances policy revealed on Tuesday by the SRC. The cut in perks is always aimed at removing ghost workers and decreasing Kenya’s growing public sector wage bill.
“Allowances and benefits that are abolished will cease to apply to any new employee in the organization or new to the grade,” the SRC announced during the draft policy unveiled for public participation.
“The employees currently being paid the allowances will continue to enjoy the allowance. This condition shall not apply to facilitative allowances.”
Facilitative allowances are given to meet costs incurred by officials in the course of duty such as per diem.
This beckons the SRC’s effort to cut or eliminate the payment of per diem, which the salaries agency considers abusive through to inflation of payments.
“The allowances have taken a remunerative dimension whilst they were intended to be facilitative in nature.
“This has resulted in motivation for arbitrage opportunities by public officers by increasing the frequency for payment and application, against the principles of prudent management of public resources in line with Article 201 of the Constitution and [Public Finance Management] PFM Act,
2012.” SRC says.
The public sector wages which include remunerative allowances such as hardship, house, and commuter; risk, extraneous, and domestic, which are fixed in the payslip will be untouched for the current public servants. This also applies to their basic salaries.
However, for the new public servants, the cuts will be imposed. SRC considers many of the paid allowances are already catered for in the workers’ basic salary, conclusively inflating salaries.
These perks include entertainment allowance, medical allowance, and utility allowance to cater for airtime, water, electricity, and security bills.
The SRC says it’s tough to ascertain if the entertainment allowance is used for hospitality for official guests.
“Allowances and benefits whose rationale for payment is redundant and/or overlaps with that of the basic salary will be abolished,” says the agency.
The exclusion of current civil servants from the cuts suggests that taxpayers will continue to shoulder the heavy perks paid to the thousands of government workers.
If adopted for all government employees, the remuneration guidelines will slash the wage bill by roughly Sh100 billion yearly. The government wage bill is presently consuming more than 50 percent of taxes hence hindering spending on development projects.
There are 865,200 public servants in Kenyawhose wage bill stands at more than Ksh800 billion. This is a Ksh458 billion increase from 2013.
“Absence of a policy to guide management and administration of allowances and benefits in the public sector has led to a proliferation of allowances, distortions in remuneration, unfairness in pay, lack of transparency, accountability and inequity,” says the SRC.
No public entity will be allowed to pay higher allowances just because it has strong financial power and the capacity to pay. More weight was put on allowances starting in 2015 as the government regarded it as an alternative to managing its pension bill by not increasing salaries.
The Kenya Institute for Public Policy Research and Analysis (Kippra) stated that allowances given to civil servants have made the government the preferred employer and requested a radical review.
Allowances have the impact of doubling an employee’s salary and in some cases increasing it by a factor of 10. Kippra suggests capping of allowances to about 25 percent of civil servants’ gross pay while the SRC favors 40 percent.
