Minister for Public Expenditure and Reform Brendan Howlin has asked his Cabinet colleagues to engage in a fundamental restructuring of public sector pay and allowances.

Earlier today, the General Secretary of the Irish Congress of Trade Unions David Begg said the allowance system was outdated and needed to be changed.

Speaking on RTÉ’s Morning Ireland, Mr Begg said that some allowances were introduced as a "surrogate" for pay increases when people were given additional responsibilities.

He said that sometimes the title of these allowances did not bear any relevance to the reason they were given.

Mr Begg said a discussion was needed between the trade unions and public sector management with a view to reforming the structure to incorporate certain allowances into the pay scale.

Mr Howlin has responded by saying that this was an attractive idea and that he had already instructed ministers to begin the restructuring process.

He said work was already underway in the Department of Justice and Education on this matter.

However Mr Howlin said it was not possible to give a timeframe for when public sector pay reform could be achieved, describing it as a "complicated challenge".

Mr Howlin said the allowances review issue had not been handled as well as it could.

He said he had picked a figure of 5%, which equated to €75 million, without properly "drilling down" first to find out what could realistically be achieved and what would be fair.

He said he was chastened by the experience.

Begg's suggestion 'sensible' - Rabbitte

Minister for Communications Pat Rabbitte said earlier that he would be open to re-examining the public sector pay structure to incorporate some allowances.

Mr Rabbitte described as "sensible" the suggestion put forward by Mr Begg that public structure unions and management should discuss reforming the pay structure.

He said getting rid of certain allowances was not possible as some of them were merited, citing the necessity of a wet weather clothing allowance for those working outdoors today.

Mr Rabbitte's Cabinet colleague Ruairi Quinn said he also welcomed Mr Begg's comments.

The Minister for Education said the allowance system was very confusing to the general public.

He said there was a difference between someone receiving an allowance to do a specific job and one that was related to a promotion or extra responsibility.