Public sector pay policy 2021-2022 (superseded)

Public Sector Pay Policy for 2021-22

Background

The 2021-22 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 2021 and 31 March 2022 (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

As with previous years, 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, progressive pay policy which is fair, affordable, sustainable and, 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

The Public Sector Pay Policy has consistently been distinctive, fair and progressive. The 2021-22 policy has been developed in the context of Scotland's response to the COVID-19 pandemic. Ministers have taken into account the inspirational efforts of key workers during this pandemic, as well as the impact of inflation on working households. This needs to be balanced with what public sector employers can reasonably afford and provide a fair deal for public sector workers.

The decision on public sector pay announced by the UK Government in the November 2020 Spending Review is a material factor in setting the 2021-22 pay policy and has an impact on Scottish Government's financial position. However Ministers remain committed to maintaining employment, delivering wage growth and a fair rate of pay in the public sector as key levers to aid economic recovery, deliver National Outcomes and improve performance. Investment in Scotland's public services remains a priority.

Ministers are committed to tackling earnings inequality, providing extra protection to the very lowest paid, and promoting the wellbeing of public sector workers. In response to the pandemic, the public sector has adopted new ways of working. This presents an opportunity for all public sector employers to consider how, where and when work is defined and delivered and the impact on the wellbeing of the workforce.

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 2021-22 are therefore set in the context of the need for ongoing pay restraint for senior staff.

Key Features of Pay Policy

The key features of the 2021-22 Public Sector Pay Policy are:

• providing a headline basic pay increase of 1 per cent for public sector workers who earn less than £80,000;
• continuing the requirement for employers to pay staff the real Living Wage, now set at £9.50 per hour;
• providing a guaranteed cash underpin of £750 for public sector workers who earn £25,000 or less;
• limiting to £800 the maximum basic pay increase for those earning £80,000 or more; and
• allowing flexibilities for employers to use up to 0.5 per cent of paybill savings on baseline salaries in 2021 to address clearly evidenced equality or pay coherence issues in existing pay and grading structures.

In addition, the 2021-22 Public Sector Pay Policy:

• introduces discretion for individual employers to work towards standardising to a 35 hour working week if and when it is practical to do so;
• 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; and
• continues a 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 for staff pay remits. Each public body covered by the pay policy must ensure that their pay proposals are affordable within their financial settlement for 2021-22.

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.