By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Nearly 1,600 senior and middle-ranking public servants have suffered combined “wealth destruction” of $3.636m due to the impact of soaring inflation, a study conducted for the Government has revealed.

The Bahamian civil service salary review, which has been obtained by Tribune Business, estimated that the salaries earned by “top” and middle management officials in the Ministry of Finance, the security services and senior audit and statistical personnel have been outpaced by the cost of living by anywhere from 2 percent to 7 percent.

The study, performed by the Deloitte accounting firm and dated May 2025, found that 694 senior and mid-ranking Royal Bahamas Police Force officers have been hardest hit by the post-COVID surge in prices across-the-board with their combined salaries - based on their actual 2024 base pay - some $1.466m short of what is required to match the cost of living.

Some 28 percent of those officers were also shown to be earning “below minimum” for their rank or pay grade, with a 5 percent gap existing between their average salary and what was required to keep pace with inflation. 

And, while 368 senior and mid-ranking Royal Bahamas Defence Force officers were shown as largely earning base salaries in line with their rank and pay, the report projected that their combined earnings were some $941,275 short of what is required to keep pace with inflation. Like their police counterparts, Deloitte estimated that they are “disadvantaged” by 5 percent when base pay is compared to living costs.

The report also found that 130 senior Customs and Immigration staff are a combined $370,564 short of what is required in base pay to keep pace with inflation. It calculated that there is a 6 percent difference, on average, between their current earnings and what is required to match the sustained increase in prices in recent years.

The collective salaries earned by 71 “top managers” in the civil service were found to be a combined $238,464 below the level needed to match inflation, while the cumulative ‘gap’ for Ministry of Finance administrative and finance and audit personnel was pegged at $195,680 and $346,215, respectively. 

The ‘Salary review for middle management and technical officers’, which the Prime Minister has pledged to make public, referred to such gaps as “wealth destruction”, meaning that the failure of base pay to keep pace with inflation and the spiralling cost of living was resulting in “low purchasing power” and “lower standards of living” for impacted civil servants and their families.

The report also found that the “wealth destruction” was even greater if the consumer price index (CPI) or “market” salary rates were used as the benchmark to determine earnings and pay gaps. For the same 1,584 civil servants, the difference between their 2024 base pay and what was required to match inflation as measured by the CPI was a combined $4.247m.

And the gap ballooned to a collective $10.15m when base pay was matched to “market salaries”. Again, the largest differences were for high and mid-ranking Royal Bahamas Police Force officers, pegged at $1.729m for the CPI and $4.272m for “market salaries”, respectively, while the latter gap for Royal Bahamas Defence Force officers was $2.505m.

Philip Davis KC has repeatedly asserted that the salary review was undertaken to ensure civil service earnings keep pace with inflation and prevent public servants and their families from suffering undue cost of living hardships. The Government has also been keen to bring public service salaries in line with the private sector’s to stop talented civil servants leaving.

Deloitte, in its report, said the Ministry of Finance asked it to assess “85 priority roles” that featured “top” civil service managerial roles that included the treasurer, auditor-general, Customs comptroller, directors of labour and social services, the director of environmental health services and the director of the National Emergency Management Agency (NEMA).

Other salaries assessed were those paid to senior ranks at the Royal Bahamas Police Force, ranging from deputy commissioner to inspector, plus base pay to Royal Bahamas Defence Force officers holding the rank of chief petty officer all the way up to deputy commodore.

Similar assessments were performed on the income earned by the director of Immigration, and other senior uniformed officers at that Department plus Bahamas Customs. The Bahamas Department of Correctional Services was also included in that work, along with administrative, executive, statistical and finance and audit personnel from the Ministry of Finance and Auditor General’s Department.

Deloitte said that, in “understanding the Ministry of Finance’s pay structure”, its work and analysis was designed to “ensure internal pay equity by evaluating salary structures across all levels” plus identify “pay gaps and overlaps” so that civil servants and security officials are paid fairly.

It added that its work, apart from “measuring the gap between actual salaries and expected salaries based on economic factors” such as inflation, the CPI and market salary rates, was also designed to “identify salary deviations from the Ministry of Finance’s defined pay bands to detect anomalies”.

Besides locating “salary stagnation and potential purchasing power erosion, and the need for pay adjustments”, the salary review also involved assessing “the percentage of employees within, below or above the prescribed salary range for each grade/position”. It also helps “identify cases of underpaid or overpaid employees that may require correction”.

The $807.458m civil service wage bill projected for 2025-2026 is the ‘block’ that consumes the greatest share of the Government’s recurrent Budget at 23.4 percent, meaning that more than 20 cents out of every $1 paid by Bahamian taxpayers will go towards covering civil service pay.

Of the $767.95m allocated to the public service wage bill in the present 2024-2025 period, some $555.744m was spent at end-March. And, based on the $735.96m wage bill for the 2023-2024 fiscal year, the Government’s payroll will have increased by almost $184m in just five fiscal years if the projections for 2027-2028 come true.

The Davis administration previously said the latest round of pay rises means Bahamian civil servants will have received base pay increases of between 8 percent to 31 percent over the last four years “with the largest percentage increases going to entry-level employees”.

However, Belinda Wilson, the Bahamas Union of Teachers (BUT) president, has threatened renewed industrial action today unless salary increments for junior, line staff teachers and civil servants were made retroactive to September 2024.

Those increments, at present, are due to be seen and felt in junior civil servants’ pay cheques come December 2025 but only made retroactive to September 2025. Ms Wilson, though, asserted that making them retroactive to September 2024 would ensure junior public officials were treated equally with their middle management counterparts.

Referring to the Deloitte report, Mrs Wilson said: “Please note that the salary review only included middle managers and up. However, the same method used to calculate the salaries for the middle managers and up will be used to calculate all public servants’ increases, including teachers.”

She added that public workers are requesting to be paid retroactive to September 2024, and to receive these funds during the October pay period which is now just two weeks’ away. “We requested that all public servants, inclusive of teachers, be paid retroactive to September 2024 just like the middle managers and up, and that the payments be made October 2025 payday,” said Mrs Wilson.