The Salaries and Remuneration Commission (SRC) turned down pay rise pleas worth Sh18.83 billion from State agencies in the nine months ended March, derailing a push by civil servants to increase their takings.
According to SRC, requests for Collective Bargaining Agreements (CBAs) topped the list at Sh17 billion, followed by requests to review allowances and benefits at Sh993.58 million and salaries at Sh993.58 million (Sh630.94 million).
Given that CBAs and allowances have provided workers with a convenient route to higher salaries for years, the decision dimmed prospects for better fortunes for the estimated 954,900 civil servants in difficult economic times.
SRC, which sets public sector wages, said that the rejections were based on the need to keep the public wage bill at sustainable levels and lower the wage bill to total revenue ratio.
“SRC is determined to set and advise on desired levels of salaries and wages for the public servants in a manner that guarantees fiscal sustainability of the wage bill and compliance with the existing remuneration and benefits regulations,” the commission says.
The commission granted requests totaling Sh1.476 billion, with CBAs totaling Sh453.89 million, salaries totaling Sh586.4 million, and allowances totaling Sh264.87 million.
The names and numbers of the government agencies and parastatals that made the requests were not disclosed by SRC.
This is a decrease from the Sh7.78 billion in requests received by SRC during the same period last year, when it approved Sh5 billion in applications.
Treasury has been struggling to rein in the bloated public wage bill, which now consumes more than half of total revenue, impeding development spending.
The wage bill to total revenue ratio was 40.89% in the fiscal year ending June 2021, and SRC expects it to remain above 40% in the fiscal year ending June 2022.
The ratio is significantly higher than the 35% recommended by the Public Finance Management Act.
The public sector wage bill for the fiscal year that ended last month is expected to reach Sh958.5 billion, up from Sh930.5 billion, highlighting the country’s struggles to control spending on salaries and allowances for state employees.
SRC has shifted its focus to lowering allowances, claiming that some perks are already covered by basic pay.
The civil service currently has 247 allowances, but the SRC says that number will fall in the next three months as it abolishes and merges others.
Allowances are being reduced at a time when salaries will remain unchanged until July 2025 under a deal struck between Kenya and the International Monetary Fund to reduce the country’s bloated public wage bill.
A review of allowances will free up an estimated Sh100 billion from the wage bill each year, allowing Kenya to allocate more funds for development projects and pay off the rapidly maturing debt.
Civil servants have not received a pay increase in five years and have turned to enticing perks to increase their take-home pay.
The number of allowances increased from 11 in 1999 to 247 today, prompting SRC to make the change.
