Public Sector Pay Policy 2024-25 Technical Guide Update Chief Executive Framework

Chief Executive approvals process

Seeking approval of proposals

1.73 The relevant Scottish Government approval must be obtained prior to implementing any pay proposals and prior to advertising, negotiating a remuneration package or appointing a Chief Executive. Please ensure sufficient time to obtain this is built into any timetable.

1.74 Where no increase is proposed, the public body should confirm details of the current remuneration package on the Chief Executive proforma to the Public Sector Pay team via their Sponsor team.

1.75 If proposals are simply to apply the annual uplift in line with the Pay Policy, then a completed Chief Executive proforma, signed off by the Chair of the public body, should be sent to Public Sector Pay team via the Sponsor team. Any proposals that go beyond that, will need to provide further information in line with the appropriate approval route.

1.76 The Staff Pay Remits approval approach should not determine how the pay proposals for the Chief Executive are approved. Chief Executive pay proposals should follow the steps outlined in this chapter.

Approval of remuneration proposals

1.77 The Sponsor team and Public Sector Pay team will assess all remuneration proposals and confirm the relevant approval route. The approval route will depend on the circumstances of your proposals.

1.78 Scottish Government approval of the proposed remuneration package is required before the post is advertised, contracts agreed, or the appointment is made. Whether a new appointment requires Ministerial approval is dependent on the legislative arrangements of the public body. Potential remuneration packages should not be discussed with prospective candidates until Scottish Government approval has been given.

1.79 Approval will also be required if any changes to a public body’s staff handbook are being proposed which will have the effect of amending or revising any aspect of those elements of a Chief Executive’s reward package covered by the Pay Policy.

Adjustments to remuneration packages after approval

1.80 If, during negotiations with a prospective candidate, consideration is given to a remuneration package that differs from the one approved, a public body must seek the advice of the Sponsor team and Public Sector Pay team before any agreement is reached. The Public Sector Pay team will advise the Sponsor team whether approval by the relevant Senior Officials or the Remuneration Group will be required. No commitment should be given to the prospective candidate until appropriate Scottish Government approval has been obtained. Sufficient time should be built into the recruitment process to accommodate such an eventuality.

Approval for the terms in a new contract

1.81 It is a requirement of approval that a public body must consult the Public Sector Pay team via their Sponsor team on the remuneration clauses in the draft contract before it is agreed. The public body must take particular care to ensure the letter of appointment does not give rise to any contractual expectation which goes beyond that in the contract or the remuneration package as agreed by the Remuneration Group.

Process for approval

1.82 All proposals should be considered by the Sponsor team and the Public Sector Pay team along with the Finance Business Partner (where relevant) prior to being submitted for approval.

1.83 Where the proposed annual award is just for a basic pay increase in line with the Pay Policy and the Sponsor team along with the Finance Business Partner (where relevant) have confirmed affordability of all pay increases within the public body, the proposals will be ‘signed off’, and the Sponsor team should notify the public body. This notification should be copied to the Public Sector Pay team.

1.84 Where a progression increase is proposed in addition to the basic pay increase, the Sponsor Director (or Deputy Director, if they have a closer working knowledge of the Chief Executive) requires to confirm they are content with performance and the progression increase is therefore justified. If the proposals are affordable then they are deemed to be approved and the Sponsor team should notify the public body. This notification should be copied to the Public Sector Pay team.

1.85 Proposals for a new Chief Executive appointment to an existing public body or the review of an incumbent Chief Executive’s remuneration package which are in line with the Pay Policy may be approved by Senior Officials. All other cases, including proposals for a permanent new Chief Executive appointment to a new public body, must be approved by the Remuneration Group.

1.86 The same approval process applies for a fixed term appointment although the business case will also need to set out the term and period of notice on termination and whether any compensation on termination may be payable.

1.87 Proposals for an interim or temporary appointment which are based on existing arrangements may be approved by the Sponsor team otherwise they should be referred to Senior Officials^[1].

1.88 For those proposals which are to be considered for approval by Senior Officials, the Sponsor team should send the proforma and a short note to Senior Officials after they have confirmed affordability. For their part in the approval, the Sponsor Director is required to confirm to the Director of Public Spending that they are content with the proposals (including performance, if relevant). The Director of Public Spending will then confirm formal approval. Either Director has the option of referring the proposals to the Remuneration Group.

1.89 Proposals which are required to be considered by the Remuneration Group should be submitted by the relevant Sponsor team Senior Official (where relevant). The submission must include details of the proposals, supporting business case and a confirmation of affordability. The Sponsor team will ask the Public Sector Pay team to contribute advice to this submission. The Remuneration Group will either approve the proposals or they may refer the approval to Ministers where they consider there is likely to be significant Ministerial interest.

1.90 If proposals are outwith the Pay Policy, they cannot be approved, even by the Remuneration Group. However their advice must be sought and included with any subsequent ministerial submission. The public body must review any such proposals, following advice from the Public Sector Pay team via their Sponsor team.

1.91 Any pay increase should not be implemented until notification of Scottish Government approval has been received. If an increase is implemented without approval or the previous year’s outturn is not in line with what was approved, then a submission must be provided by the Sponsor Director to the Remuneration Group together with an explanation for why this has occurred. For further detail refer to paragraph 1.95.

Approval timescales

1.92 Sponsor teams should allow up to ten working days for consideration by the Public Sector Pay team. If the issue is complex and is likely to take longer, then the Public Sector Pay team will advise the Sponsor team.

1.93 If the proposals are referred to the Remuneration Group, then these are normally considered at their next available meeting. Details of meeting dates and the deadlines for papers are set out on the Scottish Government’s Public Sector Pay webpages, available at: Remuneration Group. Under exceptional circumstances, some items may be able to be considered in correspondence, outwith the set meeting dates. Sponsor teams should discuss with the Public Sector Pay team if this is required.

1.94 The Remuneration Group may refer some items to Ministers. Where this occurs, the sign off letter from the Chair of the Remuneration Group must be annexed to the submission to Ministers. Any submission to Ministers must go to the Cabinet Secretary for Finance as well as the Portfolio Minister. Referral to Ministers will require further time. The submission should also make clear the Remuneration Group advice set out in the sign-off letter has been taken into account.

Deviation from Pay Policy

1.95 If any remuneration agreements, offers, or payments are made without approval being obtained, the public body, alongside the Sponsor Director will be required to provide an explanation to the Remuneration Group who may refer the matter to Scottish Ministers.

1.96 This could result in punitive action being taken by the Scottish Government, which can include the recovery of any overpayments, the capping of future increases, or a governance review of the public body.