Public sector workforce strategic position: equality and Fairer Scotland duty impact assessment

Background

In Scotland, the total public sector paybilll is estimated to reach approximately £29bn. This is equivalent to around 55.0 per cent of the entire resource budget.

Successive investments in public services since lifting the pay cap in 2018 means that the average full-time public sector employee is now earning around £1,500 more than the UK public sector average and Scotland has some of the highest starting salaries for key roles, including Teachers and Police Officers.

Scotland also has a higher proportion of employed people in the public sector at 22.3 per cent as compared to 18.1 per cent across the rest of the UK as of March 2025.

Our approach as outlined in the FSDP [Fiscal sustainability delivery plan], recognises that improving the public finances requires a cross-public sector effort over the medium to longer-term.

It is important that we manage the size and shape of our public sector and the impact of pay rises in a way that reflects the value of our public services while ensuring we are being fiscally sustainable. As such we have introduced the following devolved public sector workforce strategic position:

• Planning for a managed downward trajectory for the devolved public sector workforce in Scotland (0.5 per cent reduction on average per annum over the next five years) as part of a shift in workforce plans and operating models because of service re-design, automation, process improvement, re-prioritisation, mergers, shrinking corporate functions from 2025-26 and over the course of the next parliamentary term (2026 – 2031). Front-line services will remain protected

In order to support this, we will focus on:

• Workforce Planning: Consulting and developing good practice workforce planning guidance for public bodies to follow over the Summer. This will include highlighting existing service demand, capability building and budget scenario planning, allowing for a more data-driven approach in the lead up to the Budget and Scottish Spending Review.
• Workforce Management Policy and Control framework: This will set the principles, parameters and metrics, governance and controls required to operationalise our approach to workforce management in public bodies, integrated with the Public Sector Pay Policy to underline the connection between these two drivers of public spending.
• Promoting best practice and guidance for existing Severance policy: Many public bodies implement their own voluntary severance scheme in order to re-shape their workforce. We will provide public bodies with some of the best practice principles of using such schemes.
• Redeployment: We will take forward, with public bodies, longer-term work to explore ways to optimise redeployment opportunities across the Scottish public sector.
• Improve Transparency of Workforce Information: Publication of key workforce statistics and trends in line with Audit Scotland recommendations, with the Pay and Workforce factsheet (published as part of the Medium-Term Financial Strategy (MTFS) published alongside the FSDP [Fiscal sustainability delivery plan]) as the first step in that process.

The Devolved Public Sector Workforce Management Policy and Control Framework will ensure that Public Bodies, and relevant Scottish Government portfolios carry out more detailed EQIA and Fair Scotland Duty assessments on how the workforce reductions affect their own area.