Public sector pay strategy 2023 to 2024: technical guide

8. Chairs, Board Members and Public Appointments

Please note this section should be read in conjunction with sections 1 and 2.

Key Pay Strategy parameters for Chairs, Board Members and Public Appointments for 2023-24

Pay Strategy position on the remuneration of Public Appointments

8.1 This section applies equally to the introduction of remuneration for Public Appointments or where an annual uplift, review or change to remuneration is proposed.

8.2 Not all Public Appointees are remunerated. Public Appointees benefit personally in a number of non‑financial ways, for example: in the enhancement or application of professional expertise; general networking and personal development; or the opportunity to contribute to policy making in an area of personal interest. The main objective in offering remuneration for such posts is to increase diversity. Remuneration may be proposed where it is particularly important to have representation from as wide and diverse a range of candidates as possible, or where there is specific need for appointees to be drawn from otherwise under-represented groups.

8.3 Where a post is remunerated, it should be noted that any remuneration payable is not intended to meet the market rate that could be commanded by the individuals concerned.

Daily Fees and their purpose

8.4 Where Ministers have agreed that an appointee should be remunerated, the Daily Fee Framework for Chairs, Board Members and Public Appointments must be used to determine the appropriate Daily Fee. The appropriate Daily Fee may be expressed in terms of daily, half‑day or hourly rates for calculating payments, but changes to the number of days worked should not result in changes to the level of Daily Fee paid. The cost of any remuneration is met from the public body's existing administration costs, or from the budget of the appointee's "owning" Directorate where the appointment is not linked to a specific public body.

8.5 Any Daily Fee should take into account provision for reasonable time spent by individuals in undertaking their agreed duties effectively, though there must be clear prior agreement on which activities are to be remunerated. A Daily Fee (or proportion thereof) can therefore cover activities other than attendance at board meetings, functions or events and for example may include time spent preparing for meetings, travelling to and from meetings, etc.

8.6 The Daily Fee and the related activities covered by it should be agreed between the public body, the Public Sector Pay team, and the Sponsor team (or "owning" Directorate where the appointee is not linked to a public body), recorded formally and embodied in the letters of appointment issued to the appointee. The agreement must abide by the general requirements detailed in this chapter and may be reviewed from time to time or at the request of the public body or Sponsor team. There must also be a formal and proportionate arrangement in place for the claiming of Daily Fees which should be subject to audit by the public body.

Appointments that are not linked to a public body

8.7 The Daily Fee Framework applies to all public and ministerial appointments, regardless of whether they are linked to a public body or not. The guidance contained in this section is therefore relevant for Public and Ministerial Appointments funded both by public bodies and by all other means.

Pay Strategy parameters

8.8 The maximum uplift that can be applied from April 2023 to Daily Fees is £4 per day.

8.9 There is an expectation that Daily Fee pay proposals for all Public and Ministerial Appointments will cover one year only.

Position on progression

8.10 There is no progression for appointees receiving a Daily Fee.

Chairs and Members: Framework

Daily Fee Framework

8.11 To ensure consistency and comparability across public bodies, a number of remuneration Tiershave been developed within the Daily Fee Framework. Appropriate rates of remuneration should be determined within this framework.

8.12 In general, Tier 1 bodies include a small number of the most significant Scottish NDPBs and public corporations; Tier 2 includes the majority of executive NDPBs and significant ad hoc bodies and appointments; Tier 3 includes the smaller NDPBs, advisory bodies and most short-life and ad hoc groups, etc.

8.13 The Daily Fee Framework Tiers are uplifted annually in line with the Pay Strategy and the Framework for 2023-24 is as follows:

Chairs and Members Daily Fee Framework 2023-24 (gross Daily Fees)

Chairs Tier	Minimum	Maximum	Ceiling
Tribunal	£346	£567	£717
Tier 1	£344	£504	£561
Tier 2	£225	£378	£447
Tier 3	£159	£242	£329

Members Tier	Minimum	Maximum	Ceiling
Tribunal (specialist skills only)	£271	£396	£516
Tier 1	£248	£366	£459
Tier 2	£190	£278	£348
Tier 3	£107	£198	£281

Tier parameters

8.14 Each Tier consists of a minimum, maximum and a ceiling fee. There are different rates for Chairs and Members reflecting the different levels of responsibility. The expectation is that a Daily Fee should lie within the minimum and maximum of the relevant Tier in the Daily Fee Framework. The Daily Fee should only exceed the maximum if it is demonstrated that this is required to recruit or retain Chairs and/or Members with the necessary skills, knowledge, experience or calibre for the role they are to undertake. Daily Fees are limited to and must not exceed the ceiling of the relevant Tier.

8.15 The rates in the framework are considered gross Daily Fees in that they must include any contribution made by the public body towards any pension (if offered). A Daily Fee must not be increased to cover the Chair or Member's own contributions to any pension.

8.16 It is usual practice for the Daily Fee for a Chair to be set at a higher level than the Daily Fee for Members, in recognition of the additional responsibilities placed upon Chairs. There are no rules as to how high the level of differential between the Chair and Members' Daily Fees should be. Where there is a Deputy Chair, their Daily Fee would usually be somewhere between that for the Chair and Members.

Tribunal Tier

8.17 The Tribunal Tier within the Chairs and Members Daily Fee Framework covers the Daily Fees for Scottish Tribunal NDPBs and other tribunal‑type bodies (where approval of the Remuneration Group has been obtained to allocate to this Tier). The expectation is that Tribunal members would be allocated in the following way.

• Chair of the public body – Tribunal Chair Tier.
• Specialist Members (for example: those required to have professional qualifications or specialist knowledge, such as legal and medical members) – Tribunal Member Tier.
• Non-Executive Board Members of public body and layperson Members – Tier 1 Member Tier.

8.18 A member of a Tribunal who acts as a convener of a Tribunal hearing may receive a higher Daily Fee than other Members so long as that Daily Fee remains within the appropriate Member Tier in the Daily Fee Framework.

8.19 Tribunal Tiers in this section currently apply to the devolved Tribunals. Those Tribunals which are to be transferred in to the 'Scottish Tribunals' - as created by the Tribunals (Scotland) Act 2014 - will undergo an independent role evaluation. As such, the Pay Strategy specifically for those Tribunals may be subject to change.

Allocation to a Tier

8.20 Most appointees covered by this Technical Guide are associated with an established formal public body. The appointees are generally assigned the same Tier as the public body they are associated with.

8.21 Each standard public appointment is allocated to one of the Tiers by reference to the significance of the body - based on its size (staff numbers) and the resources managed (budget / grant), as well as consideration of its likely public profile.

8.22 When a new public body or Public Appointment is being established, the Sponsor team must discuss with the Public Sector Pay team which Tier in the Daily Fee Framework might be appropriate. The Public Sector Pay team must also be consulted if a case is being made to move a public body to a different Tier in the Daily Fee Framework.

8.23 Ad hoc appointments are generally short life appointments with specific tasks or functions, with an anticipated end date and are also quite often small in size, perhaps with as few as one member. This includes, but is not limited to, appointments to Tribunals, advisory committees or to lead Reviews, Inquiries etc. Each ad hoc public body or appointment is allocated to one of the Tiers by reference to its creation reason, the role specific knowledge and experience required, the expected interaction with Ministers, as well as consideration of its likely public profile.

8.24 Advice on the appropriate Tier of a public body and a Public or Ministerial Appointment must be sought from the Public Sector Pay team. Details must be provided of the criteria listed above for standard and ad hoc appointments to allow the Public Sector Pay team to provide appropriate advice.

Determination of a Daily Fee of a Chair or Member of a public body

8.25 The first consideration should be whether there is any need to pay a Daily Fee. In addition to the Scottish Government policy to reduce the number of Public Appointees, it is also the policy to consider reducing, where possible, the Daily Fees paid to appointees. It is therefore open to the Sponsor team to decide whether a payment need be made (apart from expenses) or to set a level of remuneration below the minimum of the Tier.

8.26 If it is considered a Daily Fee is required but the relevant Tier is still to be determined, Sponsor teams need to contact the Public Sector Pay team, who will conduct an assessment based on set criteria and determine a relevant Tier.

8.27 If it is considered a Daily Fee is required, Sponsor teams need to consider the appropriate level of fee, taking into account the Daily Fee Framework. When determining the proposed Daily Fee, comparisons to the Daily Fees paid to appointees in the same Tier should be considered (the Public Sector Pay team can provide assistance and information on DailyFees paid). Only if it is anticipated the appointee will be recruited from further afield should the levels of remuneration offered elsewhere be considered.

8.28 When considering Daily Fee proposals for Scottish Public and Ministerial Appointments, it is sometimes reasonable to consider rates paid to comparable appointees in England and Wales undertaking similar duties and responsibilities.

Chairs and Members: additional information

Appointees' classification as employees

8.29 Unless expressly provided for in legislation appointees are not employees of the public body nor of the Scottish Government (and likewise are not paid a salary). As such, they do not qualify for the rights and entitlements that are normally associated with the status of 'employees'. Public bodies and Sponsor teams should therefore exercise care when drafting letters of appointment or advertisements to avoid references to salary or employment, or give an impression of such, as this may create expectations of other benefits (such as annual leave, sick pay, redundancy, etc.). Appointees can still be an "employee for tax purposes" when Daily Fee payments are paid through payroll because of the broad definition of "employee" for these purposes, but that does not make them an employee for any other purpose.

Daily Fee payments

8.30 In relation to fees, letters of appointment may refer to a monthly or annual amount, as long as it is based on the approved Daily Fee multiplied by the 'authorised' number of days worked per month/year. The authorised number of days is the number of days stated in the letter of appointment expected to be worked (per month / year) as a result of the appointment.

8.31 It may be more convenient to remunerate appointees monthly (sometimes the fees are expressed as an annual amount), but problems may arise if the person works more, or less, than the authorised number of days.

8.32 If the remuneration is paid monthly, at a fixed amount based on an authorised number of days per month and the appointee works more days per month, then the Sponsor team may recompense them for this.

8.33 Conversely, if the remuneration is paid monthly at a fixed amount, but an appointee works fewer days a month in relation to their appointment, then the Sponsor team should review the arrangement and may need to recover any overpayments.

8.34 If a public body or Sponsor team fixes the (monthly or annual) remuneration irrespective of the number of days actually worked and appointees feel they are not being remunerated sufficiently for their time commitment, then this is not necessarily an issue about the level of the Daily Fee but possibly more about being recompensed appropriately for their time commitment. This would therefore be a budgetary matter for the Sponsor team rather than a Daily Fee issue for the Public Sector Pay team – it is not in itself justification for increasing the Daily Fee but rather a matter of reviewing the time commitment. Changes to the number of days worked should not result in a change to the Daily Fee paid.

8.35 Daily Fee payments made to appointees must comply with the tax planning and tax avoidance section of the Scottish Public Finance Manual:

www.gov.scot/Topics/Government/Finance/spfm/taxavoidance

8.36 In line with the Scottish Public Finance Manual, all appointees must be paid through a payroll system with tax deducted at source. Where there is no payroll system in place, then the Scottish Government payroll system may be available for use, but would be considered on a case by case basis through a clear commissioning process or charging model. For further information, please contact Scottish Government Pay Services: HR.Help@gov.scot. As Daily Fees are not usually pensionable, public bodies and Sponsor teams are reminded the payroll system used should ensure no employer's pension contributions are made.

Pensions

8.37 Given the relatively short duration of some appointments, the limited number of days on which appointees actually serve on bodies and the generally non-executive nature of their duties, approval is not usually given to offering pension arrangements to appointees.

8.38 However, in exceptional circumstances, pension arrangements may be considered, but the approval of the Remuneration Group must be obtained before proposals are implemented. Any such proposals must be supported by a business case which clearly demonstrates; why offering a pension is necessary, including whether it is necessary as a matter of law, the detail of the proposed pension arrangements (as they are not employees, appointees may not be eligible to join the public body's pension scheme and a bespoke scheme may have to be set up) as well as confirmation of affordability.

8.39 Where it is approved that a pension may be offered, the level of Daily Fee must not be increased to cover the individual's resulting pension contributions. The Daily Fees in the Daily Fee Framework are gross in that they include any contribution made by the public body towards any pension. So, in the rare circumstance where a pension is provided, the Daily Fee figure used when considering the Daily Fee Framework should be the 'net' Daily Fee receivable by the individual plus the amount of contribution made by the public body towards the pension.

8.40 Where pension arrangements are a result of previous practice, Sponsor teams and public bodies must not assume this is justification for their continuation. Each case must be reconsidered on its merits prior to each appointment round.

Expenses

8.41 Expenses may be paid to appointees. The basic principle is no appointee should be out of pocket as a result of expenses arising from their appointment, provided such costs are considered reasonable.

8.42 Appointees may be reimbursed for the reasonable costs of travel and, when appropriate, accommodation associated with their public duties. The tax associated with these expenses should be in accordance with HMRC guidance. To ensure consistency across public bodies, appointees' terms of appointment should provide that travel expenses shall be paid at standard Scottish Government travel rates and have regard to the Scottish Government's Travel Management policy on air and rail travel.

Other tax matters

8.43 Responsibility for ensuring compliance with all relevant HM Revenue and Customs requirements concerning any payments made to appointees lies with the public body itself. Individual appointees must also satisfy themselves as to their own tax liabilities resulting from their appointment.

8.44 In certain circumstances, where an individual has been making sufficient National Insurance contributions to be considered to be an "employed earner" and meets other applicable qualifying criteria, they may be entitled to statutory family-related benefits (for example, Statutory Maternity Pay).

Public Appointees where the individual is already a senior employee of another public body

8.45 We aim to encourage senior officers and appointees to make appropriate contributions to the work of other bodies. This can provide the following benefits.

• They broaden their experience.
• Other bodies may benefit from their expertise.
• Their contribution to their own employer is enhanced.

8.46 Sponsor teams must consider certain issues prior to the appointment of a Chair or Member where the individual is already a Chief Executive (or other senior employee) of another public body covered by the Scottish Government Public Sector Pay Strategy.

8.47 It is important to ensure that the following factors have been taken into account.

• There is no conflict of interest.
• The time commitment is appropriate.
• Arrangements for remuneration are appropriate.

8.48 Such matters, including (where relevant) the need to liaise with the Sponsor team of the public body to which the individual might be appointed, are outlined in more detail in the Public Bodies Information Update 109 which is available as a downloadable document on the Scottish Government website at:

www.gov.scot/publications/public-bodies-information-update-109-public-sector-pay-policy/.

Chairs and Members: approval

Seeking approval of proposals

8.49 The relevant Scottish Government approval must be sought prior to implementing any of the following.

• Making any annual uplift.
• Changing the Tier of a body or appointment.
• Introducing, reviewing or changing the remuneration package, for either the Daily Fee or other matters, such as pension arrangements.

8.50 Where no change is proposed, confirmation of details of the current Daily Fees is all that is required to be submitted to the Public Sector Pay team.

8.51 If proposals are simply the annual upliftdetailed in this chapter, then a Chairs and Members proforma should be either completed by the Sponsor team and sent to the Public Sector Pay team; or, where a public body has no sponsor team, completed by the public body and sent to the Public Sector Pay team. The Staff Pay Remits approval approach should not determine how the pay proposals for the Chair, Board Members and Public Appointments are approved. These pay proposals should follow the steps outlined in this chapter.

8.52 For proposals that go beyond the annual uplift, further information will be required. For example, if proposals entail a change in remuneration or Tier (i.e., following a review) or the introduction of a benefit (i.e., pension or car) then a supporting business case will need to be prepared. Details of the proposals and supporting business case should be prepared by the Sponsor team or "owning" Directorate.

Business case

8.53 Proposals for setting or reviewing a Daily Fee must be supported by a business case which should include the following.

• The need for paying a Daily Fee and/or reasons for introducing or reviewing it, which should include diversity and recruitment/retention issues.
• Details of the criteria needed to assign a Tier.
• The proposed Daily Fee, taking into account expectations around the Daily Fee Framework (minimum, maximum and ceiling of the relevant Tier).
• The remuneration of comparable appointees in Scotland and elsewhere (where relevant).
• (For Chairs) the remuneration of the last occupant of the post.
• (For Members) the remuneration of other Members and the differential with the Chair's Daily Fee.
• The ancillary activities expected to be covered by the Daily Fee (for example, preparation time and travel time, etc.).
• Affordability and sustainability.

8.54 Apart from annual uplifts, the level of Daily Fee for existing appointees is not expected to require adjustment during the period of appointment. However, where there are significant recruitment or retention difficulties; or a significant change in the role and responsibility; proposals to review the existing Daily Fee rates may be submitted to Senior Officials or the Remuneration Group, dependent on the extent to which the proposals deviate from the annual uplifts.

Approval of remuneration proposals

8.55 Where the proposed annual award is wholly in line with this chapter, and provided affordability has been confirmed by the Sponsor team, the proposals will be 'signed off' by the Public Sector Pay team. The Sponsor team will then notify the public body/the public appointee(s). Any increase should not be implemented until this notification has been received.

8.56 Proposals for the introduction of, or changes to Tiers and Daily Fees for existing or new bodies, where these are wholly in line with this chapter, may be approved by Senior Officials. For those which are to be considered for approval by Senior Officials, the Sponsor team should send the proforma, a confirmation of affordability and a short covering note to Senior Officials (the Sponsor Director or Deputy Director and Director of Budget and Public Spending). For their part in the approval, the Sponsor Director is required to confirm they are content with and support the proposals. The Director of Budget and Public Spending will then decide whether or not to 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/the public appointee(s). Any increases or changes should not be implemented until this notification has been received.

8.57 More significant changes, such as the introduction of a benefit (for example, pension or car) will require consideration by the Remuneration Group. The Sponsor Director 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 Public Sector Pay team must 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. Once approved, the Sponsor team will notify the public body/the public appointee(s). Any increases or changes should not be implemented until this notification has been received. For further detail, refer to paragraph 9.9.

8.58 The Public Sector Pay team will assess all Daily Fee proposals and confirm the relevant approval route. The approval route will depend on the circumstances of your proposals as set out below.

Chair and Members – approval route

Current or new Chair or Member	Daily Fee proposal	Approval (in all cases, affordability must be confirmed by the Sponsor team)
Existing body	No Change / Annual increase (in line with current year amounts).	Sponsor team once the Public Sector Pay team have 'signed-off' the proposals.
	Current and previous annual increases (in line relevant years amounts).	Sponsor team once the Public Sector Pay team have 'signed-off' the proposals.
	Change to any other aspect of current remuneration package (e.g., introduction of car, pension, etc.).	Remuneration Group.
Existing body - review of Tier or Daily Fee rates	Setting Tier and Daily Fees – in line with expectations.	Senior Officials (who may refer to the Remuneration Group).
	Setting Tier and Daily Fees – goes beyond expectations (i.e., above maximum in Framework / profile used to justify a higher Tier).	Remuneration Group.
New body or new appointment not linked to a public body	Setting Tier and Daily Fees – in line with expectations.	Senior Officials (who may refer to the Remuneration Group).
	Setting Tier and Daily Fees – goes beyond expectations (i.e., above maximum in Framework/profile used to justify a higher Tier).	Remuneration Group.

8.59 If proposals are outwith the limits detailed in this chapter, they cannot be approved, even by the Remuneration Group. The public body (or Sponsor team) must review any such proposals, following advice from the Public Sector Pay team.

Approval timescales

8.60 Allow for up to five 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 discuss this with the public body and Sponsor team. Allow for up to an additional five working days for proposals to be considered by relevant Senior Officials.

8.61 If the proposals are referred to the Remuneration Group, then these are normally considered at the next available Remuneration Group meeting - the dates of which are set out on the Scottish Government Public Sector Pay webpages:

www.gov.scot/Topics/Government/public-sector-pay/RemunerationGroup

8.62 Under exceptional circumstances, some items may be able to be taken in correspondence. Referral to Ministers will require further time.

Deviation from the Technical Guide expectations

8.63 Where Daily Fees have been introduced without approval or increased beyond that for which approval had been obtained previously, the Sponsor Director will be required to explain the matter to the Remuneration Group. Such actions 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.