The Scottish Government

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1. INTRODUCTION

What is the Scottish Government Public Sector Pay Policy for Senior Appointments?

1.1 The Public Sector Pay Policy for Senior Appointments sets out the Scottish Government's policy on the remuneration of senior appointments to a wide range of Scottish public bodies. The policy extends to proposals for annual increases, as well as remuneration proposals for new appointments, reviews or any other change in the remuneration arrangement. This policy document also covers the pay policy parameters for 2009-10; and the information required in support of proposals.

1.2 Sections 3 to 5 set out the requirements for the remuneration of Chief Executives. Sections 6 to 8 set out the requirements for the daily fees paid to Chairs and Members.

1.3 A glossary of terms used in this policy document can be found in Section 9. All words in blue are explained in the Glossary. You may find a printed version of this document more easy to use if printed in colour.

Who is covered by the policy?

1.4 The pay policy covers the remuneration (salary, pay range, annual increase, bonus (non-consolidated performance payment) and other non-salary rewards, etc.) of Chief Executives ¹ and, in exceptional circumstances, certain Directors; and the remuneration (daily fee rates and any pension arrangements, etc.) of Chairs and Members of Scottish public bodies.

1.5 It is relevant to all public appointments to Non-Departmental Public Bodies ( NDPBs) and public corporations. The pay policy also covers Non-Executive Directors of the Scottish Government and its Agencies and Associated Departments; Chairs and Board Members of NHS Bodies; the fees paid to Judicial appointments and appointments to Tribunals, Appeals Boards, Royal Commissions, Advisory Committees and Inquiries, etc.

1.6 This policy document will be of most interest to Scottish public bodies, in particular their Chairs and Members of Remuneration Committees, as well as Scottish Government Sponsor Teams and Sponsor Directors.

Who is not covered by this policy?

1.7 The pay of staff below Chief Executive level in the Scottish Government, its Agencies and Associated Departments; public corporations and NDPBs; NHS Executive and Senior Managers; is expected to be covered by the staff pay remit, which is subject to the Public Sector Pay Policy for Staff Pay Remits ² and is published annually. The pay of the Senior Civil Service ( SCS) is determined by the UK Government. The pay for senior officers in the police and fire services in Scotland is determined through other arrangements. The pay of Scottish local government employees is a matter for local authorities.

When is approval required?

1.8 Scottish Government approval is required in relation to any aspect of the remuneration of senior appointments. You must obtain Scottish Government approval before introducing or making any change to the remuneration of Chief Executives, Chairs or Members.

Who is involved in the process?

1.9 The roles of the various parties involved in the Public Sector Pay Policy for Senior Appointments process are as follows:

Chair / Board(of public body)

• Must comply with the Public Sector Pay Policy for Senior Appointments.
• Ensures that the public body's Remuneration Committee is aware of and complies with the Public Sector Pay Policy for Senior Appointments; and develops proposals for the Chief Executive:
  • on annual increases to pay and bonus; or
  • on any new or revised remuneration package (salary, pay range, progression arrangements, bonus, non-salary rewards, etc.),

that comply with pay policy and that Scottish Government approval is obtained prior to implementing such proposals.

• Submits proposals for Scottish Government approval to the Finance Pay Policy team, copied to the relevant Sponsor Team.
• The Chair provides a statement in support of any bonus proposals for the Chief Executive (see paragraphs 4.8 to 4.12 for details).

Sponsor Team(Scottish Government)

• Complies with the Public Sector Pay Policy for Senior Appointments.
• Ensures every public body they sponsor is aware of and complies with Public Sector Pay Policy for Senior Appointments.
• Along with the Finance Pay Policy team, considers remuneration proposals from the Chair / Board for the Chief Executive.
• Submits proposals to the Finance Pay Policy team on annual uprates or any proposals to introduce or review daily fees payable to Chairs and Members of bodies they sponsor.
• Considers and confirms the affordability and sustainability of all remuneration proposals, in conjunction with the Scottish Government portfolio Finance Team.
• Seeks approval of Scottish Government senior officials for remuneration proposals, having confirmed the affordability and sustainability of the remuneration proposal.
• Drafts submissions for the Sponsor Director to send to the Scottish Government Remuneration Group seeking approval for remuneration proposals, having confirmed the affordability and sustainability of the remuneration proposal, with a contribution from the Finance Pay Policy team.

Sponsor Director(Scottish Government)

• Ensures that every public body they sponsor is aware of and complies with the Public Sector Pay Policy for Senior Appointments.
• In relation to Chief Executive proposals where a bonus is being proposed, considers the Chair's statement supporting the bonus; whether this justifies the awarding of a bonus at the percentage being proposed; and how the percentage being proposed has been determined (see paragraphs 4.8 to 4.12).
• In conjunction with the Deputy Director of Finance Expenditure Policy, considers for approval remuneration proposals rated Green for Chief Executives, Chairs and Members.
• For all other proposals, sends submissions to the Scottish Government Remuneration Group seeking approval.

Portfolio Finance Team(Scottish Government)

• Considers and provides comments on the affordability and sustainability of remuneration proposals.

Finance Pay Policy team(Scottish Government)

• Provides advice to public bodies; Scottish Government Sponsor Teams and Sponsor Directors; the Scottish Government Remuneration Group; and Cabinet Secretaries / Ministers on the Public Sector Pay Policy for Senior Appointments.
• Assesses proposals against the Public Sector Pay Policy for Senior Appointments; provides formal advice to the Deputy Director for Finance Expenditure Policy and the Scottish Government Remuneration Group.

Remuneration Group(Scottish Government)

• Considers and approves proposals on the remuneration of Chief Executives, Chairs and Members or refers proposals to Cabinet Secretaries / Ministers for approval. Its remit includes making sure a consistent approach is taken in the approval of proposals.

Portfolio Cabinet Secretary / Minister and Cabinet Secretary for Finance and Sustainable Growth

• Jointly considers and approves remuneration proposals for Chief Executives, Chairs and Members where the Scottish Government Remuneration Group has determined that proposals should be referred to Ministers.

What do public bodies / Sponsor Teams need to provide?

1.10 For remuneration proposals to be considered -

1.10.1 For Chief Executives:

• A public body must provide the following:
  • A completed Excel template setting out the pay and bonus proposals (and any other changes to the remuneration package) and confirmation of the increase and any bonus paid in the previous year ( outturn);
  • A statement from the Chair (as set out in paragraphs 4.8 to 4.12); and
  • Where proposals relate to a review or the appointment of a new Chief Executive, an evidence-focused business case that supports the proposals.

1.10.2 For Chairs and Members:

• A Sponsor Team must provide the following:
  • A completed Excel template setting out the remuneration proposals (and any other changes to the remuneration package) and confirmation of the daily fees paid in the previous year (outturn); and
  • Where proposals follow a review or relate to the appointment of a new Chair or Members, an evidence-focused business case that supports the proposals.

Who should you contact for assistance?

1.11 The role of the Finance Pay Policy team is to ensure that remuneration proposals are in line with the Public Sector Pay Policy for Senior Appointments 2009-10 as set out in this document. Before submitting any proposals, the Finance Pay Policy team can assist in making sure that the Excel spreadsheets and any supporting business case includes all of the necessary information. The Finance Pay Policy team will provide feedback on proposals when submitted for approval by the Scottish Government.

1.12 If you need assistance or have any questions, please contact the Finance Pay Policy team:

General enquiries 0131 24 47341
Email: financepaypolicy@scotland.gsi.gov.uk
Address: Finance Pay Policy, The Scottish Government, Area 3B, Victoria Quay, EDINBURGH, EH6 6QQ

1.13 This document will be available on the Scottish Government website.

Where should you send your proposals?

1.14 When you are ready to submit proposals for approval you must send them, including completed Excel templates and, where appropriate, the Chair's statement and any supporting business case, direct to the Finance Pay Policy team.

1.15 The relevant Scottish Government Sponsor Team should be copied into this correspondence.

When should proposals be submitted for approval?

1.16 Where a public body is submitting staff pay remit proposals in 2009-10, they are encouraged to submit proposals for their Chief Executive's annual increase and bonus at the same time. You should refer to the timetable for submission of pay remit proposals in the Public Sector Pay Policy for Staff Pay Remits 2009-10.

1.17 In all other cases, you are encouraged to submit proposals for annual increases at least 6 weeks before the date they become due.

1.18 Other changes to the remuneration arrangements for Chief Executives or revisions to the daily fee arrangements for Chairs and Members should be submitted when necessary. Sufficient time for approval should be allowed.

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