Public sector pay: Chief Executive framework review

Recommendations

68. In summary, over many years various levers of pay restraint have been placed on many elements of CE pay. Some of these levers were introduced to address specific issues, and others as ongoing restraint levers.

69. These elements of restraint alongside policy decisions have achieved their stated intention. They have restrained the pay of Chief Executives, removed bonuses, capped their progression, and achieved savings for the public purse. Whilst pay restraint for higher paid employees has been a policy aim for many years, the degree to which it is currently implemented is being increasingly challenged.

70. The recent divergence between senior staff, SCS and CE pay awards has further highlighted a broader need to moderate the pay restraint of CEs whose pay arrangements are set through Scottish Ministers Public Sector Pay Policy and the CE Framework.

71. Recommendations 1a, 1b, 1c, 3a, 3b, 4 and 5 provide options for policy adjustments and updates to the Chief Executive Framework.

72. Recommendation 7 is for administrative updates.

73. Recommendations 2, 6, and 8 are for no change to the current framework.

Recommendation 1a

Annual Uplift - To preserve and maintain current pay differentials it is recommended that there is a closer relationship between CE pay and senior staff pay for annual uplifts in future public sector pay policies. Examples of how this could be achieved include reintroducing a threshold for all staff, including CEs, above a set salary level, or alternatively to have CE pay increases match staff pay increases.

Recommendation 1b

Annual Uplift - Recommend that longer term comparisons and trends between previous years SCS, senior staff and CE uplifts be a factor in determining the uplift for 2024-25 and beyond.

Recommendation 1c

Annual Uplift - To delegate authority to the Remuneration Group to consider and approve corrective measures beyond annual pay limits in the narrow circumstance of clearly evidenced significant erosion of pay differentials.

Recommendation 3a

Ten Percent Reduction - CE roles should undergo a job evaluation and full review at least once every five to seven years or sooner if there has been a significant change to the role/responsibilities of the body.

Recommendation 3b

Ten Percent Reduction - That the requirement for a ten percent reduction is removed and instead there is an expectation that CEs are recruited to the bottom of salary ranges, except in exceptional circumstances requiring additional approval.

Recommendation 4

Pay Progression - That the cap on pay progression for CEs is continued but increased from a maximum of 1.5% to at a maximum of 2.5%.

Recommendation 5

Framework Bands - That the CE framework pay bands be refreshed as proposed to better reflect the current CE landscape, whilst still maintaining broad comparison with the SCS framework.

Administrative Update 7

Punitive Action – The technical guide section on punitive action should be updated to provide more detail and greater clarity on the measures that could be put in place following deviation from the policy.

No Changes Required 2

Pay Ratios: No recommendation to adhere to a set ratio. The pay ratio between the CE and the median staff salary should not be a determining factor in setting salaries, however the ratio should be acknowledged when reviewing the CE salary.

No Changes Required 6

Determination of Band - The current method of pay band determination is still fit for purpose and no changes are recommended.

No Changes Required 8

NHS ESM – Health portfolio to decide on timing of a review of NHS ESM pay arrangements