Public sector pay policy 2022 to 2023

Public Sector Pay Policy For 2022-23

Background

The 2022-23 Public Sector Pay Policy sets out the parameters for pay increases for staff pay remits and senior appointments and applies to public bodies with settlement dates in the year between 1 April 2022 and 31 March 2023 (inclusive).

A full list of public bodies to which this policy applies is available on the Scottish Government's Public Sector Pay webpages: www.gov.scot/publicsectorpay.

This policy also acts as a reference point for all major public sector workforce groups across Scotland including NHS Scotland, fire-fighters and police officers, teachers and further education workers. For local government employees, pay and other employment matters are delegated to local authorities.

Strategic Aims

The Scottish Government's Public Sector Pay Policy continues to be based on the following principles:

• To invest in our public sector workforce which delivers top class, person-centred public services for all, supports employment and the economy, while providing for sustainable public finances.
• To provide a distinctive, progressive pay policy which is fair, affordable, sustainable and, delivers value for money in exchange for workforce flexibilities.
• To reflect real life circumstances, protect those on lower incomes, continue the journey towards pay restoration for the lowest paid and recognise recruitment and retention concerns.

Key Pay Policy Priorities

The Public Sector Pay Policy has consistently been distinctive, fair and progressive. The 2022-23 policy has been developed in the context of Scotland's economic recovery as we emerge from the ongoing COVID-19 pandemic, and this Government's commitment to create a greener, fairer and more resilient Scotland. Ministers recognise the continuing contribution of public sector workers throughout the pandemic, as well as the impact of both inflation and the UK Health and Social Care Levy on working households.

As the economy continues to recover from the pandemic, and with some sectors experiencing labour shortages, Ministers remain committed to maintaining employment, delivering wage growth and a fair rate of pay in the public sector. These are key levers to aid a fair economic recovery, deliver our national outcomes and improve person-centred public service delivery. Investment in Scotland's public services remains a priority, but this needs to be balanced with what public sector employers can reasonably afford and provide a fair deal for the public sector workforce.

Ministers remain committed to tackling earnings inequality, providing extra protection to the very lowest paid, and promoting the wellbeing of public sector workers. In response to the pandemic and the commitment to create a greener, fairer and more resilient Scotland, the public sector has adopted new ways of working. This presents an opportunity for all public sector employers to consider how, where and when work is defined and delivered and the impact on the wellbeing of the workforce.

There continues to be a legitimate public interest in the pay and conditions of senior public appointments in Scotland. The Scottish Government believes that there remains a need for the most senior workers in the public sector to take a lead in demonstrating restraint in their pay settlements. The pay policy parameters for 2022-23 are therefore set in the context of the need for ongoing pay restraint for more senior staff to ensure available resources are targeted at increases for lower earners.

Affordability

The pay policy sets the framework within which bodies can develop effective pay settlements that help them reward staff fairly and manage staffing numbers to deliver services within constrained budgets. This pay policy sets no metrics relating to the overall increase in the pay bill for staff pay remits. Each public body covered by the pay policy must ensure that their pay proposals are affordable and sustainable within their financial settlement for 2022-23 unless they are seeking to draw on the opportunity offered by the wider public service reform option included in this policy. In those circumstances, employers must demonstrate how their pay proposals align with the Resource Spending Review once it is published in May.

Pay and Public Service Reform

The 2022-23 pay policy strongly signals pay as an investment in the public sector workforce which delivers top class, person-centred public services for all in its strategic aims. When the Scottish Government publishes the Resource Spending Review in May, this will cover the period to 2026-27. It will give a platform and set the conditions for enabling public service reform with a focus on improving outcomes for people, places and communities across Scotland.

This pay policy recognises the challenges that employers can face in responding to changes in demand for services and delivering wider workforce reform, including consideration of a reduced working week. In order to support employers in delivering the strategic aims of the pay policy and wider Government priorities, the policy includes the option for employers, in discussion with their trade unions, to either:

• apply the single year 2022-23 pay policy as set out in detail below; or
• take a multiple year approach to pay enabling a more strategic approach to support achieving public service reform, particularly with reference to delivering genuinely joined up, holistic, person-centred services. This allows employers to apply increases outwith the set metrics but within an overarching framework subject to affordability and sustainability.

This option enables employers to apply pay bill increases outwith the set metrics above but within an overarching framework (see Annex A) subject to affordability and sustainable public finances. This includes going beyond the discretion on shorter working week, allowable in the 2022-23 metrics, to explore the risks and benefits of a four day working week.

Employers seeking to take this optional public service reform approach to pay will be required to submit a comprehensive business case. More detail will be available in the Technical Guide.

Key Features of 2022-23 Public Sector Pay Policy

The key features of the 2022-23 Public Sector Pay Policy are:

• setting a guaranteed wage floor of £10.50 per hour, going beyond the current real Living Wage rate of £9.90;
• providing a guaranteed cash underpin of £775 for public sector workers who earn £25,000 or less;
• providing a basic pay increase of up to £700 for those public sector workers earning between £25,000 to £40,000;
• provide a cash uplift of £500 for public sector workers earning above £40,000; and
• allowing flexibilities for employers to use up to 0.5 per cent of pay bill savings on baseline salaries in 2022 to address clearly evidenced equality or pay coherence issues.

In addition, the 2022-23 Public Sector Pay Policy:

• continues to encourage employers to work towards standardising to a 35 hour working week;
• introduces the requirement for employers to have meaningful discussions with staff representatives about the Right to Disconnect;
• retains discretion for individual employers to reach their own decisions about pay progression (limited to a maximum of 1.5 per cent for Chief Executives), which continues to be outwith the pay policy limits;
• maintains the suspension of non-consolidated performance related pay (bonuses);
• continues the expectation to deliver a ten per cent reduction in the remuneration packages for all new Chief Executive appointments, and;
• continues a commitment to No Compulsory Redundancy.