The Scottish Government has announced a multi-year public sector pay framework, setting an uplift of 9.3% over the next three years.
The new 2024-25 Public Sector Pay Policy sets out the available pay increases for public sector workers for this year and the following two years.
The pay framework applies to officials working in the Scottish Government – except senior civil servants – and those working in 71 public bodies, such as the Scottish Prison Service, the Risk Management Authority and Historic Environment Scotland. However, most civil servants in Scotland are already subject to an existing two-year pay deal for 2023-24 and 2024-25, meaning the pay policy is only of relevance to them for 2025-26 and 2026-27.
Finance secretary Shona Robison said the “above-inflation multi-year framework offers public sector workers certainty and a considerable degree of pay restoration when set against expected inflation forecasts up to 2027”.
The Scottish Government said the pay policy – which allows for up to three pay rises of 3% in 2024-25, 2025-26 and 2026-27 depending on previous pay agreements – compares to forecast inflation rates of 5.7% over the next three years. It calculated this by taking the average of forecasts from the Bank of England and the Office for Budget Responsibility for those three years.
Robison said the approach also “provides certainty for the public sector workforce and an opportunity for Scottish Government, employers and trade unions to plan for and transform our public services to improve outcomes for the people of Scotland”.
“The most valuable and important asset of public services is their workforces,” Robison said.
“Our approach to public sector pay in recent years means that people in key public sector roles in Scotland are now paid 6% more on average than in the rest of the UK demonstrating that we have supported public sector workers during the cost-of-living crisis.”
A document setting out the pay framework states that, after taxes, the average full-time public sector employee now earns around £1,500 more than the UK public sector average, up from around £430 prior to the pandemic. Before tax, the figure is around £2,400 higher in Scotland. The gap between public sector pay in Scotland and the UK is greatest among the lower paid half of employees.
Robison said the pay announcement “continues our journey to build the Scottish economy and create the prosperity necessary to support people in Scotland – underlining our commitment to strong public services”.
“Scotland thrives when the organisations that support the people of Scotland thrive, and it is my belief this new pay policy will support workers to achieve exactly that,” she added.
The policy sets the overarching framework for pay, with public bodies having the flexibility to draw up their own pay proposals which consider workforce planning and local pay issues such as recruitment and retention, equality, and the impact of the low pay measures on other staff.
The framework encourages employers to consider their own staffing profile, local evidence, views of staff and unions, and equality issues in framing their pay proposals.
Employers are also encouraged to consider “a progressive pay approach, which may include setting a cash underpin, a higher percentage uplift, or a non-consolidated cash payment”.
The pay policy document also sets out what it would take for the Scottish Government to be able to provide a higher pay rise to officials, which would include receiving more funds from the UK government and wielding headcount cuts.
It says the UK government would need to allocate additional spending for pay deals which would feed through to the Scottish budget via the Barnett formula and result in additional consequentials for Scotland. But it says, with relatively more public sector workers in Scotland, as well as higher pay for public sector workers in Scotland on average, matching a UK pay deal in Scotland costs more that the consequentials received, and providing more generous pay deals in Scotland increases the funding gap further.
“Additional expenditure on pay deals in Scotland relative to the UK must therefore be covered by cutting spending in other areas, services re-design, reduced headcount or increased taxes or charges”, the document says.
Adding to this point, Robison said: “The Scottish Government operates on an effectively fixed budget, limiting what can be delivered through pay policy. “We have set out a fair framework within the limits of our budget. A change to UK spending plans would be required to increase spending on public services and public service workers.”