Treasury runs out of options as teachers await Sh17 billion pay hike

Treasury Cabinet Secretary Henry Rotich

The four options that the Treasury was looking at to raise the Sh17 billion to pay teachers are unfeasible, the National Treasury Cabinet Secretary Henry Rotich has said.

Given these harsh realities, the Treasury chief says the government’s remaining option is to maintain the ‘status quo’.  This in effect means that the government will not comply with a High Court decision to give teachers a pay rise of at least 50 per cent—a decision that was upheld by the Supreme Court.

So if the teachers do not back down on their threat to go on strike from Tuesday, learning in public schools will be paralysed when school begins.

Mr Rotich says the Government would have considered raising taxes but Kenyans are not ready for that. The second option was to increase domestic borrowing, but the man in charge of national Budget says this is already stretched.

The Treasury says borrowing would be much harder especially in an environment of high interest rates. “Besides we cannot borrow to finance recurrent expenditure,” Rotich told The Standard on Sunday.

There is also no scope for a cut or restructuring of expenditure, what was the most popular option on the table, on grounds that the Budget implementation has just begun.

“This (a budget cut) is only done midterm in the financial year when slow moving expenditure can be identified. Remember it was not even possible to accommodate the Sh3.3 billion to counties when Senate changed the Division of Revenue Bill without cutting budget for Parliament, Executive and Judiciary,” Rotich argued.

Parliament on recess

“The options are all tight. Kenyans must understand that in all options there are consequences,” Rotich says.

By ruling out the four options, the Treasury has thrown the spanner in the works and unless State House intervenes, nothing is stopping the 280,000 teachers from downing their tools come Tuesday.

State House Spokesperson Manoah Esipisu did not respond to our text messages nor return our calls on whether the President will intervene to avert another industrial action. Meanwhile, the Deputy President William Ruto has already hinted on the State’s hard line position.

“The dispute is between the Kenya National Union of Teachers (Knut) and Teachers Service Commission (TSC) and not between the national government and Knut. TSC is an independent commission like Judicial Service Commission and the Public Service Commission because they get money from Parliament just like we get money to run the government,” said Ruto in an interview.

He stressed that since the Budget was passed in June, Parliament must look at it again and see what can be re-allocated because TSC got Sh170 billion to pay teachers, the biggest allocation, but they now urgently need another Sh17 billion.

“It is not easy because they must get money from some items, be it the Judiciary, Parliament, national government, commissions and other areas to adjust the budget,” said Ruto who asked TSC to see how it can rework its own budget.

The challenge is that Parliament has gone on recess while schools are re-opening on Monday and the threat of a countrywide teachers’ strike is now looming. When the government has an emergency spending, it is usually the development projects that are the easy targets.

In the budget-making process, government, just like any public company is required to make provisions for unfavourable court outcomes such as this one.

Parliament has already raised questions why government did not provide for such an outcome given that the matter was in court and the decision would go either way.

But in case the government squeezes some money from anywhere for the initial Sh1.4billion, it will be impossible to get it to the teachers accounts in less than 48 hours remaining. Given the bureaucracy in government and the time it takes for money to move from the government accounts to banks and then on ward transfer to teachers, it is impossible for teachers to have the money in their accounts by midnight tomorrow.

Last week’s court ruling has emboldened unions, putting next weeks opening of schools in jeopardy.

A defiant Knut Secretary General Wilson Sossion, who is revelling in beating the government a second time in court, has issued Monday midnight ultimatum.

Far-reaching implications

Students will once again have to deal with a disruptive school opening season as government and teachers unions face off in an all now too familiar third term industrial action.

The Deputy President also said the Ministries of Education and National Treasury have been asked to address the matter.

“We ask teachers to be patient as this matter is addressed. The Teachers Service Commission has to consult,” he said in an interview.

However, Mr Ruto said the pay rise would be addressed alongside the implication it could create to the larger public service.

The Deputy President said the TSC and Parliament have to exercise their roles because the budget had already been passed.

Parliament’s Budget and Appropriation Committee is also in the dark on where the money would come from and is also waiting for direction from government.

The Committee’s Chairman Mutava Musyimi hit out at the Ministry of Education, Treasury, TSC and the Salaries and Remunerations Commission (SRC) failed to put in place measures to respond to any outcome regarding the teachers’ pay.

The committee accused these State organs of doing little to come up with a solution. This was after it shelved a planned crisis meeting to discuss the teachers’ pay dispute as they await the Treasury’s proposals to plug the deficit brought home by the hefty pay.

“There is no money. There are serious fundamental questions that we must ask ourselves. The country is heavily indebted and we must weigh our options,” Musyimi said.

The irony is that the committee is the one that approved the Budget and it also had a chance to provide for such an outcome given that it has the mandate to make such adjustments.

Talks between Knut and TSC, the teachers employer, collapsed last week after a meeting that was snubbed by the The Kenya Union of Post Primary Education Teachers.

Schools re-open from tomorrow and strike could see pupils and students lose out on learning time, which could harm their performance at national examinations.

Private schools have not been affected, because teachers in those schools are not unionised. The TSC had urged teachers not to go on strike when schools reopen as negotiations over their salaries go on.

Mr Sossion asked the National Assembly to push the Treasury to release the money by midnight, August 31 to avert the strike.