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Government to spend 85 billion on salaries as wage bill skyrockets

By Luke Anami | December 6th 2017
Deputy President William Ruto with Salaries and Remuneration Commission Chairperson Sarah Serem in Nairobi yesterday. [David Gichuri, Standard]

The Government will spend over Sh85 billion on civil servants' salaries over the next four years.

This is after the Salaries and Remuneration Commission (SRC) adjusted their salaries.

Implementation of job evaluation grading structure for entire public service sector carried out last year is therefore expected to increase the wage bill to Sh650 billion by mid next year.

The civil service is a sector of Government composed mainly of career bureaucrats hired on merit and whose tenure typically survives transitions of political leadership. On the other hand, public service is mainly composed of appointed or elected leaders.

Revenue drop

However, the expected increase in spending on salaries is coming amid a drop in revenue growth.

This came as the Sarah Serem-led SRC wound up its six-year term in office in a ceremony at a Nairobi hotel graced by Deputy President William Ruto yesterday.

“Even though SRC has helped tame the wage bill, its new pay proposals will cost the Government Sh85 billion. We are doing that in four phases,” said Treasury Cabinet Secretary Henry Rotich.

He added: “However, it is imperative to note before SRC, the wage setting in Kenya was a disaster. It used to be sector based and was carried out in an adhoc manner.”

In July, the Government increased pay for civil servants and set aside Sh10 billion for the first phase of payout.

The amount has strained the Treasury and revelations the wage bill is increasing at the rate of 11 per cent has not helped matters.

In her 2011-2017 report about her six-year journey in public service remuneration management, Ms Serem said the wage bill is unsustainable. Serem's term ends this month.

“We are still concerned about the unsustainable wage bill which has been steadily rising over the past few years,” said Ms Serem.

“It is worth noting that the wage bill has increased from Sh465 billion in 2012-13 to Sh627 billion in 2015/16, and is expected to rise to approximately Sh650 billion by end of the 2017-18 financial year.”

She added: “We still have a long way to go. We need to look at the number of employees. Government institutions need to take a closer look at their employees."

Despite the challenges, Serem said the wage bill has marginally reduced despite establishment of more offices through devolution.

Development agenda

“The wage bill should be brought down from 52 per cent to 35 per cent so we channel our revenues to development agenda,” said Serem.

Ruto called for a continuous streamlining of the wage bill to ensure sustainability.

“Sustainability of the public wage bill is inextricably linked to the ability of our government to deliver on our promises to the people and that includes salaries which the Treasury CS has talked about,” said Ruto.

“The recently concluded job evaluation has addressed these issues and we expect stability, productivity and progress in public service.”

The DP called for the introduction of a bill in Parliament to help streamline management of the public wage bill and reduce wastage.

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