Public sector pay policy 2018-2019 (superseded)

Public Sector Pay Policy For 2018‑19

Background

The 2018‑19 Public Sector Pay Policy is a single year policy. It sets out the parameters for pay increases for staff pay remits and senior appointments and applies to public bodies with settlement dates in the year between 1 April 2018 and 31 March 2019 (inclusive).

Our Public Sector Pay Policy applies directly to 44 Public Bodies. A full list of public bodies to whom this policy applies is available on the Scottish Government's Public Sector Pay webpages: www.gov.scot/publicsectorpay.

This policy also acts as a benchmark for all major public sector workforce groups across Scotland including NHS Scotland, fire-fighters and police officers, teachers and further education workers. For local government employees, pay and other employment matters are delegated to local authorities.

Strategic Aims

The Scottish Government's Public Sector Pay Policy is based on the following principles:

• To invest in our public sector workforce which delivers top class public services for all, supports employment and the economy, while providing for sustainable public finances.
• To provide a distinctive pay policy which is fair, affordable, sustainable and, through the targeting of resources, delivers value for money in exchange for workforce flexibilities.
• To deliver a pay policy that reflects real life circumstances, protects those on lower incomes and recognises recruitment and retention concerns.

Key Pay Policy Priorities

This Pay Policy has been developed in recognition of Scottish Ministers' commitment in the Programme for Government to lift the 1 per cent public sector pay cap. In developing this policy, Ministers have taken into account the impact that rising inflation and social security cuts are having on working households, balancing this with what public sector employers can reasonably afford in the context of a Scottish Budget squeezed by a continued UK Government austerity policy.

In the face of these current financial challenges, to allow organisations to maintain staff numbers and employment opportunities, pay increases must continue to be carefully controlled. Ministers also acknowledge that maintaining employment and fair rates of pay in the public sector is crucial in ensuring Scotland's economy remains strong and that investment in Scotland's public services remains a priority.

The aim of this Pay Policy is to take a progressive approach to pay, allowing public sector employers to provide proportionate pay increases, combined with flexibilities to address local circumstances. This Government will continue its commitment to the real Living Wage and maintain its position on no compulsory redundancy. It is also this Government's view that it is for employers to take their own decisions about pay progression in exchange for workplace and productivity improvements.

There continues to be a legitimate public interest in the pay and conditions of senior public appointments in Scotland. The Scottish Government believes that alongside the general requirement for constraint in public sector pay, there is also a need for the most senior leaders in the public sector to take a lead in demonstrating restraint in their pay settlements. The Pay Policy parameters for 2018‑19 are therefore set in the context of the need for on-going pay constraint for senior staff.

Key Features of the Pay Policy

The key features of the 2018‑19 Pay Policy are:

• lifting the pay cap by providing a guaranteed minimum increase of 3 per cent for public sector workers who earn £30,000 or less;
• continuing the requirement for employers to pay staff the real Living Wage;
• a limit of up to 2 per cent on the increase in baseline paybill for those earning above £30,000 and below £80,000;
• limiting the maximum pay increase for those earning £80,000 or more to £1,600;
• extending flexibilities for employers to use up to 1 per cent of paybill savings on baseline salaries –
  • for non‑consolidated payments amounting to no more than 1 per cent of salary, but only for employees already on the maximum of their pay range (who no longer benefit from progression) or on spot rates; and
  • to consider affordable and sustainable changes to their existing pay and grading structures where there is clear evidence of equality issues.

In addition, the Pay Policy:

• retains discretion for individual employers to reach their own decisions about pay progression (limited to a maximum of 1.5 per cent for Chief Executives), which continues to be out with the Pay Policy limits;
• maintains the suspension of non‑consolidated performance related pay (bonuses);
• continues the expectation to deliver a 10 per cent reduction in the remuneration packages for all new Chief Executive appointments; and
• continues the policy commitment to No Compulsory Redundancy.

Affordability

The Pay Policy sets the framework within which bodies can develop effective pay settlements that help them reward staff fairly and manage staffing numbers to deliver services within constrained budgets. This Pay Policy sets no metrics relating to the overall increase in the paybill of staff pay remits. Each body covered by the Pay Policy must ensure that their pay proposals are affordable within their financial settlement for 2018‑19.

Single-year pay policy

There is an expectation that public bodies will submit pay proposals which cover one year, given that budget allocations are for a single year, although this is not a mandatory requirement of the Pay Policy. There may be circumstances where a public body chooses to submit proposals that cover more than one year and in such instances they are asked that they discuss this in advance with the Scottish Government Finance Pay Policy team.