Public sector pay policy 2020 to 2021

Public Sector Pay Policy for 2020-21

Background

The 2020-21 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 2020 and 31 March 2021 (inclusive).

A full list of public bodies to which 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 reflect real life circumstances, protect those on lower incomes, continue the journey towards pay restoration, and recognise recruitment and retention concerns.

Key Pay Policy Priorities

This Public Sector Pay Policy builds on Scottish Ministers' progressive approach to public sector pay since lifting the 1 per cent pay cap in 2018-19. In developing this policy, Ministers have taken into account the impact of inflation on working households, balanced with what public sector employers can reasonably afford and a fair deal for public sector workers.

In the face of continued financial constraint and to safeguard the delivery of newly devolved public services, pay increases must continue to be carefully controlled. Ministers acknowledge that maintaining employment, delivering wage growth and fair rates of pay in the public sector are crucial in ensuring Scotland's economy remains strong and that investment in Scotland's public services remains a priority.

This Government is committed to tackling earnings inequality, providing extra protection to the very lowest paid, and promoting the wellbeing of public sector workers. It is this Government's view that it is for employers to take their own decisions about paying progression as part of the overall package to deliver an affordable pay settlement which is fair and reflects the real life circumstances their employees face.

There continues to be a legitimate public interest in the pay and conditions of senior public appointments in Scotland. The Scottish Government believes that there remains 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 2020-21 are therefore set in the context of the need for on-going pay restraint for senior staff.

Key Features of Pay Policy

The key features of the 2020-21 Public Sector Pay Policy are:

• providing a guaranteed basic pay increase of 3 per cent for public sector workers who earn below £80,000

• continuing the requirement for employers to pay staff the real Living Wage, now set at £9.30 per hour
• providing a guaranteed cash underpin of £750 for public sector workers who earn £25,000 or less

• limiting to £2,000 the maximum basic pay increase for those earning £80,000 or more
• allowing flexibilities for employers to use up to 0.5 per cent of pay bill savings on baseline salaries for addressing clearly evidenced equality issues in existing pay and grading structures.

In addition, the 2020-21 Public Sector 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 outwith 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

• continues the commitment to No Compulsory Redundancy.

Affordability

The pay policy sets the framework within which public 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 for staff pay remits. Each body covered by the pay policy must ensure that their pay proposals are affordable within their financial settlement for 2020-21.

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.