Public sector pay policy 2022 to 2023

Annex A

Framework For Public Service Reform Approach To Public Sector Pay Policy:

The 2022-23 Public Sector Pay Policy includes the option for employers to take a multiple year approach to pay, enabling a more strategic approach to achieving public service reform. This must be done in consultation with relevant staff representatives and / or trade unions.

This approach allows employers to apply pay uplifts outwith the 2022-23 pay policy metrics.

Taking a strategic, multiple year approach to pay:

• will provide more financial certainty for both employers and employees on the future pathway of pay;
• allows employers to work towards standardising to a 35 hour working week and to explore the risks and benefits of a four day working week;
• will help facilitate reform that enables the organisation to realise efficiency savings.

The key principles of the 2022-23 pay policy set the overarching framework for any public service reform approach to pay. These are:

• 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.
• A continuing commitment to No Compulsory Redundancy.

Employers seeking to take a public service reform approach to pay will be required to submit a business case in line with these overarching principles which includes an implementation approach. Business case guidance is included below.

Business case guidance

A business case is required for employers (in partnership with trade unions) who seek to approach their pay policy through the lens of achieving public service reform. Employers should demonstrate a clear link showing how the proposals will benefit and improve outcomes for those people using the organisation's services as well as the wellbeing of staff.

When submitting a business case employers must demonstrate they have considered and met the following overarching principles throughout their proposals:

Investment in workforce: proposals must deliver long-term, person-centred changes to delivery and demonstrate improvements in productivity. Proposals must also demonstrate wellbeing benefits to the workforce.

Sustainable public finances: delivers cost-neutral savings and efficiencies to the paybill from early in the lifecycle of the multiple year pay proposals.

Progressive pay policy: demonstrate how proposals are progressive and protect those on lower incomes throughout the lifecycle of the proposals.

Wellbeing: demonstrate how wellbeing has been considered. Proposals may comprise the consideration of a reduced working week, including a four day week, and how this will be achieved within allocated funding.

No Compulsory Redundancy: where restructuring is required to achieve the reform approach, business cases must include details of any re-deployment or re-training proposals and of how the Severance Policy for Scotland will be used for any proposed voluntary exits.

Business cases must also include an Equality Impact Assessment and a detailed plan for implementation, including trade union engagement.

Further support

Before drafting a business case, employers should engage with Public Sector Pay Policy Team, Sponsor Team and relevant Finance Business Partner. The Public Sector Pay Policy Team can be contacted on FinancePayPolicy@gov.scot