Public sector pay policy 2024-2025: equality impact and fairer duty assessment

7. Recommendations and Conclusion

Pay forms a large part of public sector expenditure in Scotland. As a result of continued public spending cuts, budgets remain under severe pressure. The primary aims of the Scottish Government’s public sector pay policy is to set a framework to deliver fair, affordable, sustainable and value for money for devolved public sector pay in Scotland. This will provide employers with the tools to set pay increases in a way that are fair, reflect the real life circumstances people face, help sustain public sector jobs and protect public services, while ensuring public sector budgets remain in balance to ensure that pay rises are affordable now and in the future.

The pay policy is designed to underpin the Ministerial commitment to national wellbeing helping to create a fairer and more resilient Scotland and specifically supporting young people.

The policy recognises that the impact of Cost of Living crisis has not been felt equally. It is expected the on-going economic impact will be felt disproportionally by women as well as those from minority ethnic communities, disabled people and young people, and this could result in increasing employment and pay gaps in the short to medium term.

The Scottish Government’s commitment for staff under its direct control to supporting payment of at least the real Living Wage and expectation that employers consider a progressive pay approach for low paid workers benefits those on the lowest incomes and will continue to provide protection to low earners in particularly those individuals with a protected characteristic.

It is concluded from our Equalities Impact Assessment of the 2024-25 pay policy, that as the proposed pay negotiation principles set the framework for individual employers to draw up their own pay proposals, there are no identified direct or indirect discrimination consequences within the strategy on any of the protected characteristics. From the data available there is a higher proportion of women, disabled people, individuals from a minority ethnic group, younger employees or a combination of one or more of these protected characteristics as well as part-time workers among lower paid employees. Therefore any individual pay proposals may help protect these employees from pay restraint and in many cases provide a positive benefit - underpinning Ministerial objectives for a wealthier and fairer Scotland as well as helping to reduce the impact of Cost of Living crisis on these individuals.

As employers are expected to take a progressive approach this should also help to reduce overall income inequality. It may also help in positively working towards reducing the gender pay gap within the public sector as it should increase the overall base levels of pay for those at the lower end where historically women are overly concentrated and this is further supported by any restraint applied to higher earners including senior appointments, where there are higher proportions of men.

The pay policy sets the overarching framework in which public bodies can make individual choices on the impact of the strategy on their own circumstances. Public bodies have the flexibility to draw up their own pay proposals to consider local pay issues such as recruitment and retention, equality, and the impact of the low pay measures on other staff. The pay negotiation principles within the actively encourage employers to consider their own staffing profile, local evidence, views of staff and unions and equality issues in framing their pay proposals.

While we are satisfied that the risk of any direct or indirect discrimination by removing prescribed increases can be justified by the overarching aims of the pay policy. It is for individual public bodies to submit pay proposals within the framework set by the pay metrics considering their own local pay issues and to ensure that they do not create new or perpetuate pay inequalities in doing so. Employers covered by the pay policy are also subject to the equality duties and are expected to undertake their own assessment of their pay proposals prior to submitting them to the Scottish Government.