Public sector pay policy for senior appointments 2019-2020: technical guide

4. Chief Executives: Approval

What must you do to seek approval of proposals?

4.1 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.

4.2 Where no change is proposed, the public body simply confirms details of the current remuneration package on the Chief Executive template and submits that to the Finance Pay Policy team, copied to the Sponsor Team.

4.3 If proposals are simply to apply the annual uplift in line with Pay Policy, then a completed Chief Executive template, signed‑off by the Chair of the public body should be sent to the Finance Pay Policy team, copied to the Sponsor Team. The approval approach being taken under the Pay Policy for Staff Pay Remits by the public body (fast-tracked, streamlined, full remit) bears no relation to how the pay proposals for the Chief Executive are approved and these should follow the steps outlined in this guide.

4.4 Any proposals that go beyond that, will need to provide further information in line with the approval route set out in Table 1.

Who is going to approve your remuneration proposals?

4.5 The Finance Pay Policy team will assess all remuneration proposals and confirm the relevant approval route. The approval route will depend on the circumstances of your proposals as set out below and in Table 1.

What is the process for approval?

4.6 Where the proposed annual award is wholly in line with Pay Policy and the Sponsor Team has confirmed affordability, the proposals will be 'signed‑off' by the Finance Pay Policy team. Where a progression increase is proposed, if the Sponsor Director (or Deputy Director, if they have a closer working knowledge of the Chief Executive) is content with performance and the progression is therefore justified, the proposals are then deemed to be approved and the Sponsor Team should notify the public body. This notification should be copied to the Finance Pay Policy team. Any increase should not be implemented until this notification has been received. The Finance Pay Policy team will also notify the Remuneration Group at the next meeting.

4.7 For those proposals which are to be considered for approval by senior officials, the Sponsor Team should send the template and a short note to senior officials (the Sponsor Director or Deputy Director and the Director of Budget and Sustainability) after they have confirmed affordability. For their part in the approval, the Sponsor Director is required to confirm to the Director of Budget and Sustainability that they are content with the proposals (including performance, if relevant). The Director of Budget and Sustainability will then confirm formal approval. Either Director has the option of referring the proposals to the Remuneration Group. Once approved, the Sponsor Team will notify the public body. This notification should be copied to the Finance Pay Policy team. Any increase should not be implemented until this notification has been received. The Finance Pay Policy team will also notify the Remuneration Group at the next meeting.

4.8 Any proposals for a new Chief Executive appointment to a new body or a review of an incumbent Chief Executive's remuneration package must be approved by the Remuneration Group.

4.9 The relevant senior official is responsible for putting forward the submission for any proposals which are required to be considered by the Remuneration Group. This submission must include details of the proposals, supporting business case and a confirmation of affordability. The Finance Pay Policy team should also be asked 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.

4.10 If proposals are outwith the pay policy, they cannot be approved, even by the Remuneration Group. The public body must review any such proposals, following advice from the Finance Pay Policy team. If the proposals have already been implemented, then a submission must be provided by the Sponsor Director to the Remuneration Group together with an explanation for why this has occurred.

Table 1: Chief Executives – approval route

How long should any approval take?

4.11 Allow for up to five working days for consideration by the Finance Pay Policy team. If the issue is complex and is likely to take longer, then the Finance Pay Policy team will advise the sponsor body and Sponsor Team.

4.12 If the proposals are referred to the Remuneration Group, then these are normally considered at the next available Remuneration Group meeting. Dates of meetings are set out on the Scottish Government Public Sector Pay webpages:
www.gov.scot/Topics/Government/public-sector-pay/RemunerationGroup

4.13 Under exceptional circumstances, some items may be taken in correspondence. The Remuneration Group may refer some items to Ministers. Where the latter occurs, the minute 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, Economy and Fair Work as well as the Portfolio Minister. Referral to Ministers will require further time.

What might happen if the Pay Policy is not followed?

4.14 If any payments are made without approval being obtained, this could result in punitive action being taken by the Scottish Government, such as the recovery of any overpayments, the capping of future increases or a governance review of the public body.