Taoiseach Bertie Ahern has indicated that pay increases for public servants under the current benchmarking process will not be as high as in the previous exercise in 2002. Martin Wall, Industry Correspondent, reports.

Mr Ahern said he did not know the levels of increases which the benchmarking body, which is due to report in the next few weeks, would recommend for various public-sector groups on this occasion.

However, he said that there was a "sense" that these would not be as generous as in the last round in 2002.

Mr Ahern said benchmarking was a process which examined comparable roles in the public and private sectors. However, he said that people felt the awards in 2002, which averaged 8.9 per cent, were very high.

He said this was because at that time, private-sector pay had experienced a significant "bounce", but had not been repeated on this occasion.

Earlier, in a speech to the national workplace strategy masterclass at the Royal Hospital in Kilmainham, Mr Ahern said that in preparing for the next round of pay negotiations, which will commence early in the new year, it was "important that expectations are kept in line with the economic realities we face".

He said the economy was now in a period of transition. The upcoming Budget would be framed against the backdrop of less dramatic growth rates and a tapering of activity in key sectors such as construction.

"This is not a surprise. We all knew that unprecedented growth rates would not be maintained indefinitely," he said.

Mr Ahern said that the challenge now was about handling the transition to more sustainable levels of growth.

"One of the things we must do is to continue to invest prudently but confidently in strategic infrastructure and productive assets that will take us into the next phase of our development. This means seeing through the key elements of the National Development Plan, Transport 21 and other Government strategies - but doing so in ways that deliver projects on time and on budget."

"The same criteria and urgency apply in relation to our social infrastructure and, in particular, the health service which is attracting record levels of Government spending. We must be relentless in pursuing value for money and high standards of service delivery. We need to gear our public service agencies to pursue these quality and efficiency objectives," he said.

Mr Ahern said traditional ways of organising work and approaches to management were inadequate in the new global context.