Information about the structure of the Scottish Government and details of the Scottish Government Ministers and senior officials can be found in the Performance Report and in the Governance Statement. The governance structure as presented in Figure 1 (below) is reflective of the current structure. The governance system was reviewed in the course of the reporting period and further information on the key changes from the review is included in the governance statement.
Statement of Accountable Officer's Responsibilities
In accordance with the accounts direction issued under Section 19(4) of the Public Finance and Accountability (Scotland) Act 2000 the Scottish Ministers are required to prepare resource accounts for each financial year in the form and on the basis set out in the Government Financial Reporting Manual, detailing the resources acquired, held, or disposed of during the year and the use of resources by the Scottish Ministers during the year.
The resource accounts are prepared on an accruals basis and must give a true and fair view of the state of affairs of the Scottish Government, the net resource outturn, resources applied to objectives, recognised gains and losses and cash flows for the financial year.
The Permanent Secretary is the most senior member of the staff of the Scottish Administration and as the Principal Accountable Officer is the Accountable Officer responsible for preparing the accounts and submitting them to the Auditor General for Scotland.
In preparing the accounts the Principal Accountable Officer was required to comply with the Government Financial Reporting Manual (FReM) and in particular to:
- observe the accounts direction including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis;
- make judgements and estimates on a reasonable basis;
- state whether applicable accounting standards as set out in the FReM have been followed and disclose and explain any material departures in the accounts; and
- prepare the accounts on a going concern basis.
The Principal Accountable Officer confirms that the Annual Report and Accounts as a whole are fair, balanced and reasonable. The responsibilities of the Principal Accountable Officer are described in the Memorandum to Accountable Officers from the Principal Accountable Officer published in the Scottish Public Finance Manual.
For the purposes of the audit, so far as the Principal Accountable Officer is aware, there is no relevant audit information of which the auditors are unaware and all necessary steps have been taken by the Principal Accountable Officer to ensure awareness of relevant audit information and to establish that the Scottish Government's auditors are aware of that information.
The Principal Accountable Officer authorised these accounts for issue on the date signed at the end of this report.
Scope of Responsibility
The Scottish Government's role is to deliver our Purpose and National Outcomes, guided by the National Performance Framework.
As the Permanent Secretary, I am responsible for ensuring that robust governance arrangements are in place to ensure that we deliver our Purpose and National Outcomes in an open and transparent way. I am also the Principal Accountable Officer (PAO) for the Scottish Administration (under the terms of the Public Finance & Accountability (Scotland) Act 2000) and responsible for ensuring the propriety and regularity of finances and the economic, efficient and effective use of resources. In discharging these overall responsibilities, I am supported by the designated Portfolio Accountable Officers within the core Scottish Government; the Crown Office and Procurator Fiscal Service (COPFS); Scottish Government Executive Agencies and Health Bodies.
Detailed information on the role and responsibilities of Accountable Officers is set out in the Accountability chapter of the Scottish Public Finance Manual (SPFM) and further detail on the context and purpose of the Governance Statement can be found in the Governance Statement chapter of the SPFM. Figure 1 sets out the approach I have put in place to achieve this.
Corporate Governance System
The Scottish Government's Corporate Governance system has been designed in order to provide me with support and advice as Principal Accountable Officer in relation to strategic issues of organisational health, performance, vision and strategy and effective governance.
The Scottish Government's corporate governance system provides for clear lines of accountability, effective reporting and appropriate escalation routes. It enables scrutiny and oversight of the Scottish Government's activities and provides me with a source of assurance on the effectiveness of the corporate governance arrangements in place. In addition, it complies with all governance-related guidance in the SPFM, the Civil Service Code and relevant elements of the Good Governance Standard for Public Services produced by the Independent Commission on Good Governance in Public Services.
In the final part of 2019-20 and throughout 2020-21, elements of the governance system were streamlined as the Scottish Government pivoted resource and changed its ways of working in response to the COVID-19 pandemic. In 2021-22, as the organisation looked towards COVID-19 recovery, a review of core elements of the corporate governance system was undertaken to ensure that they remained fit-for-purpose in what was a significantly different operating environment, and that any improvements that were embedded during the period were retained as the organisation moved to new ways of working. The review also crossed over the previous Permanent Secretary's tenure and my own, which presented an opportunity to expand the scope of the original review to include the Executive Team's modes of working. Further information on this is provided later in this statement. Key changes related to the People & Place and Performance Boards, including their role, remit, membership and where they fit in the corporate governance landscape. Where previous corporate sub-boards focussed on areas within the responsibility of a single Accountable Officer, for example the Economy and Exchequer boards, they have been re-aligned within DG assurance arrangements. The creation of the Delivery Executive as an operating mode of the Executive Team has also played a significant role in enhancing the governance, scrutiny and assurance over the delivery of key Ministerial priorities. The core elements of the system continued to operate in the reporting period, including: Corporate Board, the Scottish Government Audit & Assurance Committee (SGAAC) and Director General assurance meetings, providing me with assurance as Principal Accountable Officer in areas including: corporate governance, financial stewardship, organisational health, management of risks, internal controls and delivery and performance.
A diagram of the governance structure as at June 2022 is included below at Figure 1. This will continue to be a live picture and further improvements will be taken forward as the outputs from the governance review are taken forward. The diagram now includes existing governance architecture which supports the talent management within the Scottish Government for completeness. For comparison the Governance structure that preceded that provided in Figure 1 is outlined in Figure 2. The Accountability and Assurance Framework is also provided at Figure 3 describing the assurance structures operating within Scottish Government.
Governance arrangements for separate accounting entities
The separate accounting entities within the Scottish Government consolidation boundary have corporate governance arrangements in place appropriate to their individual circumstances and in compliance with relevant guidance. The effectiveness of governance arrangements for the separate accounting entities is addressed in the Governance Statements provided by the entities concerned as part of their annual accounts. As with the Scottish Government, these arrangements comply with relevant guidance in the SPFM and generally accepted best practice principles.
Corporate Board's purpose is to provide me, as Principal Accountable Officer, with objective strategic oversight, guidance and advice in relation to the Scottish Government's vision and strategy; performance; organisational health; and effective governance. Membership of Corporate Board includes myself, Directors General as my Portfolio Accountable Officers and three Non-Executive Directors – Ronnie Hinds, Linda McKay and Annie Gunner Logan. In the course of 2021-22 Hugh MacKay completed his term as a Non-Executive Director and member of Corporate Board. As of June 2022, all Non-Executive Directors (NXDs) have had an open invitation to attend Corporate Board. There are also a number of standing attendees including the Chief Financial Officer, the Director of People Directorate and the Board Secretary.
Corporate Board has met quarterly over the course of the reporting period and its minutes are published. Alongside core areas of business, it has considered the following specific issues over the reporting period: capability and capacity; public service reform; climate change; the Annual Accounts and Governance Statement (relating to the period 2020-21); COVID-19 Recovery; and the Scottish Government approach to financial investments. It has also been sighted on the progress and outputs of the corporate governance review. The creation of the Performance & Delivery Unit in the reporting period, and the operation of the Executive Team meeting as the Delivery Executive since the end of January 2022, has also led to enhanced oversight, scrutiny and review of the progress of delivery of key Ministerial priorities.
The Executive Team
The Executive Team met on a weekly basis throughout the reporting period and more frequently as needed, focusing on developing and implementing the vision and strategy, managing performance and delivery, deploying resources in response to Ministerial priorities and ensuring effective governance and organisational health.
Since late January, under my leadership, the Executive Team has been meeting in distinct 'modes' specifically in Strategic mode and as the People Executive and Delivery Executive. This has brought enhanced focus on key priorities and issues. The strands of business which are considered in each mode support delivery of shared objectives that I and my Executive Team have put in place for 2022-23: prioritisation with purpose; confidence in delivery; structured collaboration; strategic design and planning; and building capability.
One of the most significant changes in the period to the Executive Team ways of working was the creation of the Delivery Executive which has met weekly since late January. This mode of Executive Team is responsible for providing challenge, leadership and direction on key delivery priorities across the organisation. The Delivery Executive considers corporate risk and finance on a monthly basis, and provides a space for constructive mutual challenge and partnership and for testing delivery assumptions and promoting rigour. It has brought increased focus and enhanced assurance to me as Principal Accountable Officer on monitoring the performance and delivery of key Ministerial priorities including: tackling child poverty; climate change; and COVID-19 recovery (including health, education, justice and economic recovery). On a quarterly basis, the Delivery Executive meets as Performance Board, further information on the role and remit of this board is provided below.
Meeting fortnightly in Strategic mode, the Executive Team has provided leadership and direction to ensure that the Scottish Government achieves its goals, considering issues of a cross-cutting nature, including: the implementation of our corporate vision In the Service of Scotland; the Resource Spending Review; the National Care Service; strategic sponsorship of public bodies; and the response to the crisis in the Ukraine. Meeting fortnightly as the People Executive, the Executive Team has focused on issues relating to workforce strategy and planning; the implementation of hybrid working; succession and talent management and diversity and inclusion. In each of these modes moving forward, the Executive Team will build on the work undertaken in 2021-22 relating to prioritisation, robust financial management and fiscal sustainability to ensure that the Scottish Government is organised to deliver for success.
Scottish Government Audit and Assurance Committee
The Scottish Government's Audit & Assurance Committee (SGAAC) members are our Non-Executive Directors and its role is to provide advice and support in discharging my Principal Accountable Officer responsibilities in relation to risk, control and governance and associated assurance through the provision of constructive challenge.
During the core reporting period (2021-22), the Committee was chaired by Ronnie Hinds, alongside Deputy Chair, Jim Robertson. As of June 2022, Ronnie Hinds completed his tenure as Chair and Jim Robertson has taken on the role of Chair and Jayne Scott, the role of Deputy Chair. I attend along with Directors General; the Chief Financial Officer; the Director for Internal Audit & Assurance and the Board Secretary. Audit Scotland attend SGAAC and have an open invite to attend Director General Assurance meetings as the Scottish Government's External Auditors. The Auditor General attends SGAAC annually when the Committee considers the Scottish Government's Annual Accounts and the Governance Statement.
Relevant issues discussed at Director General Assurance meetings are escalated for awareness and discussion to SGAAC or elsewhere in the governance system (e.g. Corporate Board or the Executive Team) as appropriate based on clear escalation criteria. Issues which have been considered for assurance purposes at SGAAC in this reporting period have included: the governance arrangements to support successful Resource Spending Review delivery, strategic sponsorship, the process for the 2022-23 budget flightpath and longer term improvement activity relating to fiscal sustainability. SGAAC has also considered the findings from key Directorate for Internal Audit & Assurance activity, and key findings from Audit Scotland reviews.
The issues raised throughout this year, alongside the Director General Certificates of Assurance which underpin this Statement, have been discussed by SGAAC in the period up to my signature of the Statement and the Scottish Government's Annual Accounts. SGAAC subsequently considered the Statement and the draft Annual Accounts on 21 November 2022 and no significant control weaknesses were raised other than those disclosed in the significant control issues section of this Statement.
A similar process is in place in each of the separate accounting entities within the Scottish Government consolidation boundary.
Director General Assurance meetings
Director General Assurance meetings take place quarterly, providing a dedicated forum in which assurance is sought on the core elements of good governance. Each meeting covers: financial stewardship; people and capability; performance and outcomes; organisational efficiency; risk management and the internal control environment. Relevant risks and issues are escalated for awareness, discussion and/ or action to as appropriate SGAAC, the Executive Team or Corporate Board in line with the associated escalation criteria.
Assurance meetings are attended by each Director from the Director General family; the Non-Executive Directors that are aligned with the particular DG portfolio in their pairing relationship; Non-Executive Directors; Audit Scotland; Internal Audit & Assurance; the Board Secretary and relevant officials as appropriate and they provide me with support as the Principal Accountable Officer in the preparation of this Governance Statement and the Scottish Government's Annual Accounts. The Chair and Deputy Chair of SGAAC have open invitations to attend DG Assurance meetings and have done so frequently over the reporting period, primarily with a view to calibrating risks, and their management, across Directorates.
Improvements to the Scottish Government's assurance arrangements continue. The ongoing Risk Improvement agenda has enhanced the arrangements for risk management and reporting which feed into the Director General Assurance meetings. Robust risk management will continue to be an area of focus across the organisation and through various strands of the governance system in 2022-23. Further detail on improvements undertaken in 2021-22 is included later in this statement.
The increased focus on performance and delivery across the organisation has also been reflected in Director General assurance meetings. At a corporate level, there has been a sharpened focus on monitoring the delivery of key Ministerial priorities, including – Climate Change, COVID-19 Recovery and Tackling Child Poverty. The arrangements for monitoring and reporting on delivery through Director General assurance will continue to develop in 2022-23.
Other Corporate Governance Boards
The Corporate Board is supported by a number of corporate sub-boards:
People & Place Board
The People & Place Board met for the first time as a combined board in April 2021, and following agreement by Corporate Board, it was established as a permanently combined board which is chaired by DG Corporate. The Terms of Reference and membership of the board were reviewed in the reporting period, and the board now has an information flow up into the Executive Team's People Executive. The Board met in June 2021, September 2021 and April 2022. The meeting that was scheduled to take place in December 2021 was cancelled due to the Scottish Government response to the COVID-19 Omicron variant - the papers for the meeting were considered in correspondence. The board provides advice and guidance to me as chair of the Executive Team and Corporate Board on the creation of the culture and conditions for individuals to thrive and be successful in the Scottish Government. In the reporting period the Board has discussed key issues including diversity and inclusion, hybrid working and the development of the new Corporate Strategy.
During most of the reporting period (March - December 2021), the Performance Board was chaired by DG Scottish Exchequer and it was a sub-board of the Corporate Board. It met twice between March and December 2021 in this configuration and it considered items on the Programme for Government and the National Performance Framework review. Following the creation of the Delivery Executive in January 2022 and as a product of the corporate governance review and refresh, the Performance Board was re-aligned in the governance system as a 'mode' of the Executive Team's Delivery Executive which I chair. Its first meeting in this new configuration took place on 7 April 2022 and membership now includes myself, Directors General, and two Non-Executive Directors. The core role and remit of Performance Board has remained largely unchanged. Its focus on strategic performance, including the National Outcomes and National Performance Framework is now complementary to Delivery Executive's weekly rhythm and focus on the delivery of key priorities.
Infrastructure Investment Board
The Infrastructure Investment Board (IIB) is chaired by DG Scottish Exchequer and it strengthens strategic direction, prioritisation and oversight to ensure coherent advice and aligned delivery of an effective, fiscally sustainable programme which maximises our ambitions for infrastructure investment. It is concerned with the impact of overall investment on the economy, how best and by whom major and critical infrastructure is financed and ensuring that all infrastructure investment supports the National Outcomes.
Its focus in the coming years will be the effective implementation of the current Infrastructure Investment Plan and the development of the next plan, embedding decisions made in the Capital Spending Review, and the delivery of the National Infrastructure Mission.
Internal Audit and Assurance
The Directorate of Internal Audit and Assurance (DIAA) brings together three independent assurance teams - Internal Audit; Digital Assurance Office; Portfolio, Programme and Project Assurance; - the Head of Counter Fraud Profession, and the role of the Data Protection Officer. While the services provided by each of the teams continue independently, an integrated approach to assurance is taken to support the Scottish Government's expanding responsibilities through a proportional provision of assurance activities throughout the policy to delivery lifecycle.
Audit Scotland, as the Scottish Government's External Auditors, assess the extent to which they will use the individual reviews undertaken by Internal Audit to inform their opinion on the financial statements, and meet their wider responsibilities, depending on their direct relevance to their work. Each year they also undertake a review of the Scottish Government's Internal Audit arrangements. Audit Scotland confirmed that their review did not find any areas of non-compliance with standards.
Audit Scotland attend Director General Assurance meetings and SGAAC, providing updates in relation to current and future work plans. Periodic meetings take place between Executive Team, the Auditor General and Audit Scotland as part of the Scottish Government's wider commitment to working together, with the most recent taking place in October 2021.
In addition, regular engagement has taken place between Audit Scotland and the Directors General, the Chief Financial Officer, the Director of Internal Audit & Assurance and the Board Secretary and others as required. In addition, Audit Scotland meet regularly with the Chair and Deputy Chair of SGAAC in order that Audit Scotland can support them in discharging SGAAC's responsibilities to me as Principal Accountable Officer.
Non-Executive Directors (NXDs)
There are currently ten Non-Executive Directors providing support, guidance and constructive challenge to the Scottish Government through the governance structures set out above, and through individual pairing arrangements with Directors General. I am thankful to the Non-Executive Directors as the Scottish Government's "critical friends", undertaking and supporting a wide range of work which has assisted me in identifying the issues I have raised in this Governance Statement.
Scottish Government COVID-19 Recovery
The COVID-19 pandemic was the most significant issue affecting the Scottish Government, and in late 2021 the emergence of a further new variant (Omicron) had to be managed. Impacts of the pandemic have and continue to impact on all areas of the organisation, amidst long-standing pressures across health, social care and social work sectors. The ongoing challenges of supporting Ministers to make sound decisions requires evidence based decision making as the Scottish Government emerges out of the pandemic, to assess resources and delivery risks.
The Covid Recovery Strategy prioritises key outcomes for the people of Scotland, and brings together partners to deliver person centred, relational, outcome led services. The strategy, published in October 2021, is a joint commitment with local government, but meeting the ambition of the strategy requires a joint effort across all partners. In late 2021, the Covid Recovery programme was established, overseen by a board comprising Ministers, Local Government leaders, Convention of Scottish Local Authorities (Scotland) (COSLA), Society of Local Authority Chief Executives (SOLACE), Public Health Scotland (PHS), Scottish Council of Volunteer Organisations (SCVO) and business representatives, and co-chaired by the Deputy First Minister and the COSLA president.
NHS Scotland faced significant pressure as it responded to the pandemic. The focus remains on recovery and taking forward improvement across planned and urgent and unscheduled care. A Planned Care Programme Board and Urgent and Unscheduled Care Programme Board have been established as part of the Care and Wellbeing Portfolio. The direct and indirect impacts of the pandemic have, and continue to have, a significant detrimental impact on the delivery of services across Accident and Emergency and planned care. These pressures operate in a context of extraordinary efforts to nationally support recovery and reduce the significant elective backlog. The level of delayed discharge is also higher than pre-Covid levels and the multi-dimensional nature of the pressures, changed systems, and a challenged workforce, makes for an extremely challenging situation which has resulted in many hospitals being at or near capacity levels. Going forward the NHS will continue to experience significant challenges in recovering from the pandemic with a substantial backlog of activity to be cleared, a strain on workforce and financial resources and a need for the remobilisation plans and refreshed overarching strategy to effectively prioritise and look to new evidenced approaches. During the COVID-19 pandemic, boards highlighted that elective activity was curtailed. At peak times it was suspended to allow all staffing resources to be diverted to treat the surge of COVID-19 patients but given the numbers waiting and the continued impact working in an environment with COVID-19 present, the risk of not getting back to normal waiting times performance has fully materialised.
Through the 2021-22 period there has been a continued focus on the government's immediate response to COVID-19, through the lens of the Four Harms of COVID, as new variants, emerging in late 2021, led to an historic high in reported case numbers. Learning from the COVID-19 response has been considered in the 'looking back to look forward initiative', which has helped shape the new organisational vision 'In the Service of Scotland' which was launched in June 2021. The announcements of both the Scottish and UK Covid Inquiries this year and the likely International Covid Inquiries, coupled with the announcement in January that the Lord Advocate established a Covid Death Investigation Team, will be an area of focus for Scottish Government going forward.
The simultaneous announcements of both the Scottish and UK Covid Inquiries this year, as well as the likely International Covid Inquiries, has been anticipated with the recording of key COVID-19 response decisions and the evidence that relates to them since March 2020. This evidence will be tested as we begin meeting asks of both the Scottish Government Covid Inquiry and Crown Office investigations.
Assurance on grants to Local Authorities for payment of COVID-19 support schemes
Business support grants were developed at pace to respond to the severe economic impact of the pandemic as a result of necessary public health measures; and to provide emergency support to businesses to protect livelihoods and jobs. The organisation has delivered significant levels of business support funding in response to the pandemic. This was achieved in collaboration with teams from across the Scottish Government, working with Local Authorities and a number of other delivery partners. Since the start of the pandemic, businesses in Scotland have benefitted from over £4.7 billion in support from the Scottish Government. In particular, the delivery of the £375 million support package announced in December 2021 following the emergence of the Omicron variant and the reintroduction of restrictions on economic activity to control it was executed very promptly and efficiently.
As part of the assurance processes it has been demonstrated that the Scottish Government has managed and mitigated the fraud risk associated with business support funding. The pace and scale of business support funding, required the Scottish Government to accept a tolerance for fraud risk that was initially slightly higher than normal, with additional measures designed into business support schemes to mitigate this risk. This was necessary to enable payments to be made quickly and the schemes were a lifeline support for businesses who would not have survived without it. Since then, a fraud risk review was undertaken which looked at a range of schemes delivered by different partners and confirmed that the controls in place were adequate in relation to the amounts involved.
It was essential that this support was implemented quickly and Ministers recognised that the speed of delivery introduced a greater risk of fraud, but this was proportional to the urgency with which support was distributed. Additionally, policy and the delivery mechanisms chosen were deliberately designed to mitigate this fraud risk, by using established systems, processes and data for the delivery of support:
- Grant funding was provided to Local Authorities to administer grants to eligible businesses. Grant conditions for most of the grants specified that Local Authorities were responsible for ensuring that procedures for administering the grants were "suitably robust".
- Local Authorities used established administrative capabilities which included mature fraud prevention and detection activities.
- The schemes were founded on the key qualification criteria of liability for non-domestic rates which meant that Local Authorities were using a well-established, robust, existing data set and had an existing financial relationship with businesses claiming a grant, to verify the existence of the business and validate other information relevant to determining eligibility.
- The schemes were application based, eligibility criteria was set and guidance provided; this guidance evolved further over time as business support policy developed, enhancing effective control and targeting of support.
COVID-19 business support schemes were delivered in accordance with the Scottish Public Finance Manual, which requires delivery partners to take steps to detect and prevent fraud when distributing funds. The Scottish Government worked with a range of delivery partners, using existing systems, processes, data and expertise to identify and provide support to businesses which were impacted by the restrictions required to control the spread of the virus. This allowed the Government to provide support quickly and securely, in particular by having access to existing data to verify information provided by applicants, which was an important step to mitigate the fraud risk. The Government also worked with businesses to set up sector specific schemes for sectors like close contact services who were not captured in existing data sources.
The Scottish Ministers made payment of grants to Local Authorities in exercise of their powers under Sections 126 and 127 of the Housing Grants, Construction and Regeneration Act 1996. The plans and related funding were confirmed in the additional Summer Budget Revision of February 2021.
A number of additional grant schemes were put in place to provide specific support to sectors of the economy or groups of workers who were particularly affected by the pandemic or by the restrictions in place. Some of these schemes were specifically designed to support businesses who did not have premises and were not liable for non-domestic rates, and so were not eligible for the main funds. These additional grant schemes were administered by a range of delivery partners, including local authorities, the Enterprise Networks, Creative Scotland, Visit Scotland and private contractors. In each case, the processes set out above were applied to the policy design and administration of the schemes, setting these out in grant conditions or contracts with a requirement to address fraud risks, allowing delivery partners to use existing data or knowledge where relevant to validate information on applications, setting clear eligibility criteria that applicants would have to meet, and with arrangements for managing fraud risk.
Ongoing monitoring, review and management of the schemes helped to further increase detection of fraud, and reduce fraudulent claims:
- Guidance to Local Authorities specifically advised of the need for due diligence to be undertaken to mitigate fraud and control mechanisms to be in place for effective fraud control.
- There was an ongoing relationship and engagement between the Scottish Government and Local Authorities as schemes were delivered. A Local Authority working group met regularly and fraud was a live issue that was regularly monitored and reviewed.
- Grant conditions required Local Authorities to provide regular information on expenditure and Local Authorities shared data with the Scottish Government on potential fraudulent applications.
Fraud estimates and assurances in business support schemes administered during COVID-19
In mid-2021, the Scottish Government assessed the levels of inherent fraud risk within the highest value business support schemes, reviewing the mitigating controls in place in order to provide an opinion on the Scottish Government's resultant exposure to fraud risk, and recommendations to enhance financial governance for future grants. It was found that effective controls were in place in Local Authorities to mitigate the majority of fraud risks associated with business support, with some areas where controls could be improved. This resulted in an overall opinion of 'reasonable assurance' for the business support grants.
Audit Scotland considered that the Scottish Government's estimate for levels of fraud within COVID-19 business support of 1-2% (£16 million - £32 million) was reasonable, but not robust. We have since looked at ways of improving the confidence in this estimate and have taken a number of actions to improve assurance for fraud risk, ensuring that consistent and specific data is collected across grants and made available to provide better fraud and error metrics. Actions include:
- Regular updates provided to the COVID-19 Business Support Governance Board, chaired by Director-General Economy, established to provide assurance over the COVID-19 business support schemes.
- Self-assessment checklists were completed by the Scottish Government for business support grants to ensure due regard had been given to areas such as fraud risk during policy development to support fraud mitigation and management.
- Fraud Risk Assessment exercises were carried out by Scottish Government within schemes to ensure the identification of specific fraud vulnerabilities, used to inform decisions concerning control requirements and delivery options.
- In June 2022, the Scottish Government's Head of Counter Fraud Profession engaged with the Scottish Local Authorities Chief Internal Auditors Group (SLACIAG) and commissioned intelligence on fraud within business support schemes as part of our post-delivery testing. Responses were obtained from 16 Local Authorities, representing the four largest Local Authorities in Scotland. This data covered schemes administered throughout the pandemic.
- Fraud and error data was commissioned from local authorities on all cases of fraud and suspected fraud, amounts lost to fraud and amounts recovered. This data included funds administered in 2020-21 and 2021-22.
- We commissioned fraud and error data from other delivery partners on all cases of fraud and suspected fraud, amounts lost to fraud and amounts recovered. This data exercise is currently underway and the findings of this, together with the data we already hold, will help inform our fraud data reporting and counter fraud approaches for any future provision of business support.
This fraud and error data included a broad description of fraud in order that all potential fraud cases were captured. This helped improve the quality of fraud estimates and ensure that the Scottish Government was able to better establish the full extent of potential fraud within COVID-19 business support. We also asked for specific data on payments or underpayments made in error, and for accompanying data on how much within each area had been recovered. The recovery of fraudulent payments as at July 2022 is approximately £504k, with recovery of payments an ongoing process.
All internal audit services (IAS) within Local Authorities were involved in supporting the delivery of business support grants, the majority of which was through assurance reviews or consulting on the delivery of funds. A significant majority of IAS gave an opinion of 'reasonable assurance' or otherwise their highest opinion rating in relation to fraud risk within business support, reflecting a similar position to work undertaken by the Scottish Government. The access that IAS have within Local Authorities to internal information and their knowledge of their individual authority processes, improves the Scottish Government's assurance that COVID-19 business support schemes were protected.
The responses provided by IAS show that Local Authorities were proactive and took ownership of fraud risk management within COVID-19 schemes. Local Authorities ensured that fraud counter measures were in place and that assurance against fraud risk could be provided within their governance processes. IAS exercises in validating and sample testing of applications helps to determine that the overall estimated level of fraud with funds was in fact robust, supported by the assurance review work undertaken that on the whole found that assurance was reasonable or better.
Information from these assurance processes informed an assessment of the estimated level of fraud and error within the schemes. Data pertaining to schemes administered in 2020-21 was reported in the Scottish Government's consolidated annual accounts, 2020-21. Subsequently, a report setting out findings based on additional data recently obtained from Local Authorities for funds administered in 2020-21 supports our earlier assessment of fraud estimates and overall opinion of reasonable assurance for COVID-19 business support schemes.
Based on the evidence available, the Scottish Government's estimate of undetected fraud within COVID-19 business support in 2021-22 remains at 1-2%, equating to between £6.3m to £12.6million
Figures on Omicron business support funding schemes
The data contained within this section of the annual accounts covers the Omicron business support schemes which were administered by Local Authorities in 2021-22, the period the accounts cover.
Figure 4 provides headline spend figures for the Omicron funding schemes administered by Local Authorities as at June 2022, plus SFBF payments made towards the start of the financial year (like restart and route map extension). Figure 5 provides figures on fraud identified, prevented and realised for the Omicron funding schemes delivered by Local Authorities as at July 2022.
|Name of scheme||Number of Awards||Spend (£m)|
|Localised Restrictions Support Fund||8,489||9.6|
|Route map extension fund||11,131||12.6|
|Additional Soft play Support One-off Payment||91||0.6|
|Taxi and Private Hire Driver and Operators Fund (June 2021)||32,443||46.5|
|Hospitality: December and January Business Support Top Up||10,727||51.5|
|Hospitality and Leisure: January Business Support Top Up||12,464||19.9|
|Public House Table Service Restrictions Fund January||2,317||6.4|
|Nightclub Closure Fund||131||4.4|
|Taxi and Private Hire Driver and Operator Support Fund 2022||28,767||25.0|
|Close Contact Fund||9,449||22.6|
|Outbound Travel Support Fund||303||4.5|
|Name of scheme||Total instances of potential fraud identified||Total instances of potential fraud prevented||Total instances of potential fraud where payment was made|
|Hospitality and Leisure||130||125||5|
|Public House Table Service Restrictions Fund||18||17||1|
|Nightclub Closure Fund||3||3||0|
|Brewers Support Fund||0||0||0|
|Taxi and Private Hire Fund||100||98||2|
Information on rejected applications
The effectiveness of the verification process for applications provides a good level of assurance on fraud prevention. The rejection rates were approximately:
- 14% for the Hospitality Top-up Fund
- 14% for the Hospitality and Leisure Fund
- 4% for the Public House Table Services Restrictions Fund
- 19% for the Nightclub Closure Fund
- 6% for the Brewers Support Fund
These demonstrate an effective control regime within each scheme which is corroborated by the number of prevented fraud attempts recorded by Local Authorities.
Information on detected fraud
The rates of detected fraud were low. The number of detected or suspected frauds as at July 2022 was 403. Of these, 390 were prevented and only 13 had been paid, to a value of £33,500. This means that only 3% of detected potential fraud resulted in a fraud loss, therefore 97% did not result in loss and were prevented. This indicates proactive and effective pre-payment fraud prevention measures were in operation. This data was derived from 30 of the total 32 Local Authorities.
For the Omicron funding schemes as at July 2022, 196 grants that were erroneously awarded had been successfully recovered due to detection of error by Local Authorities. Recovery action had been taken against 32 further awards, although these had not yet resulted in recovery at the time of data collection. Further information about the outstanding recoveries will be collected from Local Authorities by the end of 2022.
The available data shows approximately £1.1 million of fraud prevented based on the average grant amounts.
Reporting and pursuing fraud
It is for individual delivery partners to determine how and when to take legal action to recover funds. Prevention is always preferable. However, delivery partners will take appropriate action to pursue the recovery of losses, referring matters to the Police where appropriate. In doing so, there will be both practical and legal limits depending on individual circumstances. This requires each case to be considered on its own merits. The ability and pace at which funds can be recovered is also therefore dependent on the individual circumstances of the case and depends on a number of factors – for example, whether the loss can be offset against legitimate eligibility for a future grant, and law enforcement's ability to pursue.
Of cases of fraud identified by Local Authorities, most were detected as being fraudulent before a payment was issued and therefore no requirement exists for recovery.
Regular management information was collected for COVID-19 business support schemes which included schemes administered by Local Authorities and other delivery partners for operational and monitoring purposes. This data was collected at an aggregate level to reduce the administrative burden on delivery partners, whilst maintaining the value for monitoring. The collection provided in the footnote below provides the most up-to-date high level data on the number of awards and payments made to a large number of schemes as they were delivered.
In addition to the publication of management information, the Scottish Government also published experimental statistics which provided more detailed breakdowns for a subset of Local Authority delivered funds related to the Strategic Framework Business Fund. A dataset was developed as experimental statistics, as the data collection and quality assurance processes were more robust than the management information collection and the publication as a whole underwent improvements to meet stakeholders' needs.
Local Government statistics were also published, relating to the Small Business Grant Scheme and the Retail, Hospitality and Leisure Business Grant Scheme.
The Scottish Government also undertook an award level data collection exercise for a subset of Local Authority and non-Local Authority delivered funds for the 2020-2021 financial year. Ad-hoc experimental statistics were published using a more detailed data collection, including breakdowns of expenditure by Local Authority and payment date. A data cleansing exercise is ongoing that will allow further breakdowns to be published from this data collection later this year.
An award level data collection is in progress for schemes delivered during the 2021-2022 financial year. This data collection will also go through the data cleansing process to ensure statistical breakdowns are of the best quality and value.
Additional ad-hoc experimental statistics have been published for specific schemes where data quality allows, such as sector-level breakdowns for the Mobile and Home Based Close Contact Services Fund and detailed information on applications, awards and expenditure for the COVID-19 Business Ventilation Fund.
The Office of the Chief Economic Adviser is undertaking an ongoing programme of evaluation of COVID-19 business support schemes available to businesses in Scotland. An evaluation was published on 1 June 2022 which assessed the outputs and indicative outcomes of the COVID-19 business support measures in Scotland up to summer 2021. The report drew on scheme management information data, survey data, business intelligence, secondary sources and modelling work to understand how many businesses have been supported and the extent to which the measures have helped businesses survive through the immediate crisis.
The report found that the support received from the Scottish and UK Governments provided lifeline support for businesses in Scotland, helping most beneficiaries survive through the immediate crisis. Over 70% of businesses in Scotland who received support reported that it had helped them continue trading. While the package of business support did not, and was not intended to, provide full compensation for losses experienced, the report found that Scottish Government support filled many gaps in UK Government support. A higher proportion (82%) of businesses that received Scottish Government support – including those who also received support from the UK Government – felt it helped them continue trading compared to those that received UK Government support only (65%). This suggests Scottish Government support had an additional impact, over and above the impact of the UK Government schemes.
National Performance Framework
The National Performance Framework (NPF) has been the foundation for a transformative shift in how policy is developed and delivered in Scotland. It is Scotland's wellbeing framework, that highlights 11 Key National Outcomes.
The NPF was renewed in June 2018 and put increased wellbeing and sustainable and inclusive economic growth at the heart of the Scottish Government's work. It includes a statement of the values that guide the Scottish Government's activities. This work has focussed on consistency and compliance, championing a positive risk culture, embedding positive behaviours and encouraging improvements across the organisation, kindness, dignity, compassion and transparency. The next statutory review of the National Outcomes is due to commence this year.
The statutory responsibility of Scottish Ministers to "prepare and publish reports about the extent to which the national outcomes have been achieved" is discharged through the NPF website, where data and performance assessment are published as and when new data on the NPF National Indicators becomes available. In May 2019 the Scottish Government published "Scotland's Wellbeing – Delivering the National Outcomes", a report which drew together longer term trends and data across the National Outcomes. The Scottish Government have also produced a follow up analytical report on Scotland's Wellbeing: The impact of COVID-19 which was published in December 2020. The publication aims to illustrate the profound effect that COVID-19 has had on Scotland's wellbeing as a nation, and how it has disrupted progress towards Scotland's National Outcomes.
The monitoring of our progress towards the delivery of our key commitments and their contributions to National Outcomes has been further developed and now takes place through a new internal Performance and Delivery monitoring process. This is helping the organisation identify how those deliverables link to our strategic cross-cutting outcomes and the NPF, develop outcome measures and over time improve our ability to determine the most effective, evidence based interventions to make progress towards these strategic cross-cutting objectives and National Outcomes.
Social Security Scotland – Next phase
The annual accounts of Social Security Scotland have an audit qualification in respect of the regularity of an estimated level of overpayments attributable to fraud and error in benefits administered by the Department of Works and Pensions (DWP). The estimated level of overpayments attributable to fraud and error in the benefits, delivered by the Department of Works and Pensions (DWP) on the Agency's behalf, is not deemed material for the Scottish Government consolidated accounts.
The Scottish Government have specifically recognised the risk to the budget of Social Security Scotland expenditure being materially different from forecasts. The Scottish Fiscal Commission (SFC) has formal responsibility for producing forecasts, and so explaining variations, however the expenditure is significant within the overall budget and highlights the need to ensure forecasts are accurate. The late movements were essentially caused by fluctuations being larger during the past two years because the PIP budget is now included in Social Security budgets, resulting in small percentage fluctuations causing large overspends. Social Security are currently looking at whether there can be any further refinement of the forecasting models.
Social Security Scotland has its own counter-fraud measures in place and continues to develop both its data driven approach to counter-fraud and its covert-surveillance capability where it is authorised through the Regulation of Investigatory Powers (Scotland) Act 2000 (RIPSA). Social Security Scotland has again had a positive annual report from the Investigatory Powers Commissioners Office (IPCO).
Scottish Government's Assurance Framework
Annual assurance on the adequacy and effectiveness of the core Scottish Government's governance, risk management and internal control systems is provided by the Scottish Government's Director of Internal Audit and Assurance. In the annual assurance report submitted to SGAAC at its meeting on 13 June 2022, the Director of Internal Audit and Assurance confirmed that reasonable reliance could be placed on the governance, risk management and internal control arrangements.
Risk Management Arrangements
Effective risk management continues to be at the heart of the Scottish Government's Assurance Framework. The Scottish Government's approach is published on the Scottish Government website within the Scottish Public Finance Manual which was reviewed in March 2019 and its internal guidance updated most recently in April 2022. It is also consistent with the UK Government's Orange Book and other guides.
As referenced earlier in this statement, a range of improvement work has continued during 2021-22. This work has focussed on consistency and compliance via the launch of the Risk Champion role in April 2021 and the Champion Network, enhanced training and support for each Directorate. A follow up organisation-wide risk maturity assessment is currently underway for 2022-23 which will test compliance with Scottish Government guidance and effectiveness of local risk management arrangements.
The Risk function has also, in line with the new Delivery Executive focus, begun providing a monthly risk report to that forum alongside facilitation of deep dives on key risk areas. The risk function has also been undertaking joint improvement activities with other areas of the Scottish Government to further enhance the risk information. Enhanced guidance was published in April 2022 with further templates and materials to support continued improvement alongside introducing mandatory risk management training for all staff via a mandatory e-learning package, with all areas expected to ensure compliance with this requirement by the end of March 2023.
Scottish Government Key Risks
The Scottish Government's corporate governance system has been designed to ensure that risks to its organisational health and policy performance in this environment are identified, managed and mitigated effectively. Organisational health risks managed via this risk framework have been woven throughout this statement and are detailed as specific progress updates or significant issues.
Over the last year a number of policy-specific risks have been identified, managed and monitored through the assurance processes and included in the Scottish Government's Corporate Risk Register. The Register is a living document and is updated on an ongoing basis. A short summary of the risks focus at the end of the period covering this Statement (March 2022) is included below:
- Fiscal Sustainability; i) reducing exposure to Budget volatility via the fiscal framework; ii) secure more proportionate medium-term budget management levers; and iii) ensure the long term sustainability of the public finances through effective budget-setting and medium term strategic financial planning across the organisation.
- Climate Change Mitigation; via the reduction in Greenhouse Gas emissions required by legislation and making an appropriate (leadership) contribution to the global response to the climate emergency (including in relation to commitments under the Glasgow Climate Pact).
- Combined economic risk of COVID-19 and EU Exit; impacting on business viability lower levels of trade and investment across some sectors of the economy, disruptions to the labour market and subsequent impacts on household incomes, levels of financial hardship, inequalities and demand on the third sector.
- Child Poverty; taking significant action, in tandem with delivery partners across Scotland, to address child poverty in the next 12 months.
- Education Outcomes; delivering a clear programme of work around education reform and recovery; the vision for excellence and equity in Scottish education including on attainment levels, the attainment gap, the health/wellbeing of pupils and the wider education workforce.
- Social Security; continuing the successful implementation of the new Social Security system whilst balancing current ministerial priorities and financial pressures.
- Short and Long Term Sustainability of Health & Social Care Services; due to ongoing and legacy impacts of Covid 19 (including the need to manage it as a new endemic virus) alongside long term systemic challenges arising from demographic change, financial challenges (including capital investment) and workforce, to meet our National Performance Framework ambitions around world class health outcomes, including reducing health inequalities and improving population health.
- Public Service Reform; delivering suitable arrangements to test the coherence and penetration of our public service reform programmes.
- Cost of Living Crisis; The risks and impacts of the cost of living crisis rose to prominence in early 2022. Work has developed on the approach to addressing the Cost of Living Crisis, supporting a joined up, coherent response that maximises impact on key Scottish Government priorities such as child poverty. The work identified the interdependency of risks, including financial and otherwise, drawing out the implications for the Scottish Government and wider public sector financial settlements.
These risk management arrangements have also surfaced several cross-cutting risks and themes, which are either reflected in the current iteration of the Corporate Risk Register or and have been highlighted via DG assurance or through the Certificates of Assurance provided to me by my Directors General, these risks and themes are also addressed specifically within other sections of the statement as appropriate, specifically including:
- Performance Management; The increased focus on Performance was a key step change across the Assurance Agenda. Overarching priorities were identified, including Child Poverty, Climate Change, Constitution and COVID-19 Recovery; with a number of significant transformation programmes established across DG families setting the direction of travel for SG.
- Resourcing: Capability, Capacity and Wellbeing of the Scottish Government's staff to deliver during COVID-19 and EU Exit alongside new and existing pressures;
- The challenges surrounding the annual financial outturn amidst a backdrop of the resource spending review, challenging manifesto commitments and the development of the Programme for Government, and COVID-19 recovery.
- The importance of ensuring appropriate information management; following the review of corporate processes for the storage, retrieval and deployment of corporate information which identified a number of areas for required improvement of which work to address this is underway.
Sponsorship of Public Bodies
In March 2021, Director General Communities outlined the latest steps of an improvement plan which focusses on the sponsorship of Public Bodies to the former Public Audit and Post Legislative Scrutiny Committee (now Public Audit Committee). This included the launch of a review of the Scottish Government's relationship with Public Bodies which reported to Executive team in Autumn 2021. On 28 February 2022 the report was published alongside the Scottish Government response. The report consists of 14 recommendations for improvement. The recommendations look to address concerns raised and will allow the Scottish Government to demonstrate effective sponsorship of public bodies with more consistency. The report endorsed the Smarter Sponsorship approach adopted in 2015 but seeks to develop a new phase in these key relationships. This new phase will be known as Strategic Sponsorship.
Throughout the course of 2021, the Scottish Government rolled out bespoke training sessions to sponsorship practitioners which was complemented by an online learning module which launched in the summer of 2021. This module will go through an annual refresh with a focus on emerging issues to ensure that we are continually learning lessons and sharing best practice.
Alongside this work was the production of a workshop for Accountable Officers which took place in December 2021. This is complemented by the publication of an online training module for Accountable Officers in July 2022 which is part of our ongoing work to support the role of the Accountable Officer.
The process for the provision of annual assurances by senior staff within the core Scottish Government (and the other constituent parts of the Scottish Administration) is set out in the Scottish Public Finance Manual. The culmination of this process is the provision of Certificates of Assurance from Directors General that reflect any issues raised by Directors, as well as any other issues raised throughout the course of the year in either the Director General Assurance process; by SGAAC; by Non-Executive Directors; the annual assurances by Internal Audit and consideration of information on control issues received in respect of any associated executive agencies, non-ministerial departments and sponsored bodies.
In preparing this Statement, my assessment of whether an issue represents a significant issue is based on a review of its materiality, relevance and impact on the organisation and its governance as a whole. It is also based on the assurances provided by Directors General, including whether they believe they have been able to effectively discharge their responsibilities as Portfolio Accountable Officers. On this basis, the issues I have identified are as follows:
Managing the annual financial outturn continued to be a challenge, as expected throughout 2021-22. Amidst a back drop of the Government's response to variants of the COVID-19 pandemic and recovery, national and international crisis, and agreed commitments, significant work was undertaken to prioritise and support a balanced budget. Accountable Officer templates continue to be utilised as a key part of financial governance across all areas as directed by the Chief Financial Officer. Effective budgeting and forecasting will also be essential going forward as Scottish Government navigate the current budget climate.
In March 2022, formal work on the Resource Spending Review (RSR), the first in ten years, commenced. It was recognised that this process provides a critical opportunity for clarity and certainty on what will be delivered in the next five years, to address financial sustainability issues which can be particularly challenging across a one year budget, and further agree significant transformative changes and other ministerial priorities. The RSR was published at the end of May 2022.
During the first six months of the financial year, significant focus was given to tackling the budget pressure with a focus on prioritisation. While this position changed in the latter part of the year due to late consequential funding, similar challenges exist for 2022-23 and beyond.
Financial System Transformation
A key enabler of good financial management is the availability of timely, accurate and detailed financial and related information. The progress of corporate transformation is an urgent priority that will shape this and drive real benefit once implemented. The transformation programme will also help to address the significant operating costs challenges and support living within our budget as set out in the RSR (Resource Spending Review) allocations. Workforce planning is underway to consider our overall resourcing requirements and how we can actively manage our headcount and budget pressures.
The organisation continues to experience significant resourcing issues that restrict our ability to meet the full range of financial challenges and opportunities facing us. Addressing this will continue to be a priority in 2022-23 as we look to support sound financial management activities; initial work on the Scottish Government's new Enterprise Resource Planning (ERP) system; and delivery of the wider finance transformation programme.
Measures to upgrade the Scottish Government Enterprise Accounting System (SEAS) financial system are ongoing and expected to conclude during 2022-23. This is essential to de-risk the existing platform during the design and implementation of the Scottish Government's new ERP system. Ongoing investment in capacity and capability will be required to maintain these business critical systems and prepare for a seamless transition to the new arrangements.
Capacity and capability risks continued to feature across the organisation, with some areas facing significant resourcing challenges following staff movements to support the pandemic response and COVID-19 recovery, in addition to other pressures including the Ukraine crisis, and COP26. A new recruitment system was introduced in January 2022 and has handled all volumes without any system issues. Recent additions have made to automate some parts of the recruitment process, and this automation technology has been integrated with the new recruitment system where relevant.
The consequences of COVID-19 continue to have a significant impact on resource planning and staff wellbeing, alongside managing priorities such as the NHS Recovery Plan; the reform of social care and the establishment of the National Care Service. Risks relating to capacity, wellbeing and resilience continue to be a major focus both within DG Health and Social Care and wider health and social care system. This is reflected in the DG Health and Social Care People Plan where there are themes dedicated to both Priorities and Planning, and Health & Wellbeing. The People and Capability Group, which reports to Health and Social Care Management Board (HSCMB), monitors improvement aimed at addressing resourcing and wellbeing risks and a new Capacity and Capability Sub Group will be created to strengthen that emphasis on ensuring structures are clearly aligned to priorities and that DG Health and Social Care supports staff at all levels to thrive. HR Management Information is regularly monitored and reported through the quarterly DG Assurance process.
The importance of addressing the health and wellbeing of staff continued throughout 2021-22 as homeworking had become the established pattern. As restrictions lifted, the support for hybrid working has been a focal point of people assurance discussions and guidance has been issued to assist staff as Scottish Government continues its 12-month hybrid working trial.
Throughout the Covid pandemic, working from home remained the default position for most of 2021-22, with only a very small number of staff carrying out business critical roles in offices. A phased reopening of buildings began late August for priority returnees, which included those who would benefit from being back in an office on health and wellbeing grounds. There were further relaxation of restrictions in February to allow more staff to return to hybrid working, following the First Minister's update to working from home guidance. Regular engagement with staff has been in place across the wider Scottish Government throughout the reporting year to support wellbeing activities and hybrid working plans, including a Scottish Government wide survey, staff events, and wellbeing conversations in place between managers and their direct reports. These activities will continue to support hybrid working across the Scottish Government.
Work continues, with a focus on wellbeing and workload, to consider the long term plan and impact of RSR to ensure financial affordability, resource capacity against outcomes to be delivered whilst supporting planning, recruitment and hybrid working. Dedicated Learning & Development resources are now delivering an offer that aims to contribute to building personal and collective capability, covering civil service management skills, financial management, wellbeing and culture.
Child Poverty Targets
The second Child Poverty Delivery Plan for the period 2022-26, Best Start, Bright Futures was published on the 24th March. The plan was a key area of focus for DG Communities over the course of 2021-22 and publication of the plan represented the culmination of a significant cross government effort. The plan sets out a range of actions to reduce child poverty. Comprehensive governance structures have been put in place to move from plan development to delivery and child poverty was one of the four priorities within the Resource Spending Review. However, significant cross government challenges remain in meeting the statutory interim child poverty targets in 2023. In order to meet these targets, momentum will need to be maintained and the Scottish Government will need to continue to work closely with local authorities and delivery partners across Scotland and ensure that reducing child poverty is the focus of Government policy and budgetary decision making.
The challenges associated with meeting the Statutory Child Poverty targets have been compounded by the cost of living crisis which has come into much sharper focus during the first half of 2022, and particularly since March. Work has progressed to build on the package of measures announced last month by the UK Government to address the crisis in the short term. Looking forward, further action will be required over the course of this year to address some of the immediate challenges faced by low income households and also develop longer term policy solutions to improve Scotland's resilience to increases in the price of essential goods.
Policy Impact Assessments
In 2020-21, Internal Audit carried out an audit of Policy Impact Assessments which attracted a limited assurance opinion and which resulted in two high priority recommendations for improvement. Over the course of 2021/22 action has been taken to further improve some of the processes associated with the approach to policy making. This has included introducing an improvement programme to strengthen the use of impact assessments to build better policy, and enhance how our various required assessments operate as a system to address key priorities.
The Scottish Government is committed to improving its information recording, retrieval and management. The Government is strengthening the management processes in relation to information governance. This work is focused on developing additional controls where necessary to minimise the risk of data handling issues, and ensuring that all staff undertake mandatory training and have a strong awareness of the Scottish Government's corporate information management strategy and associated responsibilities.
European Structural Funds (ESF)
The European Commission (EC) issued decisions, in accordance with Article 142 of Regulation EU no 1303/2013, to suspend payments to Scottish Government in respect of the European Social Fund (ESF) (on 5 November 2019) and in respect of the European Regional Development Fund (ERDF) (on 31 January 2020). These reflected "serious deficiencies in the management and control system for the programme" identified during audits carried out in 2017 and 2018.
The ERDF suspension was lifted by the EC on 18th December 2020, whilst the European Social Fund suspension was lifted by the EC on 31 October 2022. The flow of reimbursements to the Scottish Government has resumed.
There remains a risk of financial loss related to the European Social Fund. To date, losses of £14.7 million have been recognised, and the 2021-22 Accounts included a provision for a further financial loss of £43.1 million relating to expenditure that has not yet been paid to Lead Partners. This estimate is the difference between the total amount approved within the programme and the amount currently considered reclaimable from the EC due to the alternative model and methodology for ESF agreed with the EC which is based on a unit cost for employment counselling. EC auditors have agreed that this approach is robust.
The SG continues to work very closely with the Audit Authority and over the past year, all Audit reports have achieved grades 1 (excellent) or 2 (good). Action is also being taken to ensure compliant closure of the programmes by the end-date of February 2025, with progress being reported to the ESF Programme Board which is chaired by a non- executive director of SG.
Lochaber Aluminium Smelter
In December 2016 the Scottish Government entered into a 25-year financial guarantee relating to the hydro plant and aluminium smelter at Lochaber. This involved guaranteeing the power purchase obligations of the smelter if the business does not fulfil its obligations to pay for contracted power. The guaranteed annual amounts vary between £14m and £32m over the life of the contract. The Scottish Government receives an annual fee in return for the guarantee. The Scottish Government has assessed that the level of provision required for the guarantee was £114 million as at 31 March 2022, a reduction of £47m from 2021. All Guarantee Fee payments due to the Scottish Government are up to date. There has been no call on the guarantee and the Scottish Government holds a comprehensive suite of securities over the assets at Lochaber.
Ferguson Marine Port Glasgow
This year there was a need for a revised delivery schedule for the two ferries under construction and the associated cost increase. Work is ongoing to increase the assurance of the new programme and budget with better data being provided from the FMPG Senior Management Team and the Board. There is a commitment to ensuring lessons from recent reviews are learned to ensure focus on delivery of vessels 801 and 802. Further detail is provided in the Performance report of these accounts.
The financial year 2021-22 saw the establishment of governance and controls around the National Mission on Drugs. A Project and Programme Management approach has been developed and put in place, which includes the upcoming publication of a National Mission plan and outcomes framework; detailed charters, including deliverables, dependencies, resourcing requirements and milestones for individual projects; and a review of the data and reporting requirements to monitor and evaluate performance and investment. Risks are managed in a structured way, with monthly Delivery Board meetings providing formal programme governance attended by directors from across the Scottish Government, but also monthly programme meetings with the minister, quarterly delivery updates to the First Minister, updates to the Health and Social Care Assurance Board, and a newly revised external Expert Oversight Group for the National Mission.
Over the last year the approach to governance across the Mental Health (MH) Portfolio has been refined. This has included reviewing governance arrangements and further developing Directorate and Unit Plans and risk registers. The approach is aligned with the Scottish Government governance and assurance procedures and strategic mental health priorities, and has focused on identifying key milestones, deliverables, risks and dependencies across the MH Portfolio which provide the basis of our assurance. This has been underpinned by a consolidation exercise of almost 400 historic mental health commitments, and work to enhance capacity and capability across the Directorate (including the development of a Change Leads Network). Aided by the establishment of the Mental Health Equalities & Human Rights Forum, there is a greater focus on equalities considerations across the directorate. Work will continue in 2022-23 to embed and enhance reporting and assurance arrangements, with a greater focus on refining and tracking benefits/and impact. The new Mental Health Strategy is currently being developed around an outcomes framework and will form the basis for future prioritisation and monitoring of MH Portfolio activity.
NHS Workforce Impacts
NHS Boards have highlighted the inability to recruit and retain high calibre staff to the right roles, at the right times, in the right place, within an affordable budget which has meant the risk to the delivery of some services. High level of vacancies, limited success in recruitment and increased use of supplementary staffing result in unscheduled care being prioritised ahead of schedule care. Furthermore, high workforce turnover and low national workforce availability present limitations to delivery and development of service and Board recovery plans. There is continued use of the independent sector to address shortfalls in internal capacity although there remains a desire to internally implement a more sustainable solution to the shortfall in capacity, with sustainability plans being developed.
The pandemic has significantly exacerbated the demand profile for services across the NHS and social care. Capacity challenges across acute, primary and community care services became progressively more severe over the course of 2021-22; underlying population health needs, including current unmet healthcare demand, are likely to further compound this going forward. Furthermore, economic challenges, including rising health inflation and a whole economy cost of living crisis (and the additional financial pressures flowing from likely public sector pay settlements in the forthcoming year 2022-23) will significantly compromise the ability to take forward required workforce growth and workforce development activity identified as necessary to delivering pandemic recovery, workforce growth and transformation.
Health and Social Care Staff have made significant professional and personal sacrifices over a prolonged period of time that has resulted in a negative impact on their wellbeing. The wellbeing of staff has been impacted inconsistently across the different geographies and occupations that make up the workforce. In 2021-22 £12 million was made available to support the wellbeing of staff. The Scottish Government is continuing to work with leaders across health and social care, as well as hearing directly from staff, to understand where the current pressures are, and what further actions can be taken to mitigate their impact on staff.
Within this operating context there are existing workforce planning capacity issues, which have affected the ability of health and care services to take forward long-term planning aligned with strategic policy objectives. Revised workforce planning guidance, pursuant to the publication of the National Health and Social Care Workforce Strategy in March 2022, requires health boards to bring forward a 3-year assessment of workforce requirements, predicated on a review of local population health needs, which will be reviewed by Scottish Government in August 2022. It is anticipated that the plans will clearly identify a growing gap between demand-led assessments of current workforce capacity (and requirements for workforce growth), and the affordability of meeting that demand assessment.
During 2021, additional recruitment has been delivered in nursing and midwifery support services and in international recruitment infrastructure; however there remains persistent structural issues with patient flow in acute settings (including delayed discharges), unmet care need in the community and very compromised primary care capacity. There are also long-standing pressures across health, social care and social work sectors, with regards to leadership and fostering cultures to enable people to thrive. The new programme of work currently known as the National Leadership Development Programme (NLDP) aims to contribute to the Scottish Government's ambition to help retain and support staff in leadership roles across these sectors. The Programme will build on the work and ethos of Project Lift by being an actively compassionate, collaborative and inclusive programme of work with a strong focus on developing and nurturing talent within the three sectors.
NHS Board Sponsorship/Financial Management
In Scotland, NHS Boards are subject to the NHS Board Performance Escalation Framework which has a five stage escalation process. In 2021-22, six territorial Health Boards were escalated to Stage 3 or above on the framework. These boards were subject to additional scrutiny and received tailored support. The NHS Board Performance Escalation Framework sets out a clear and transparent process for Scottish Government to support and intervene in Health Boards that are struggling to meet delivery standards or services. Health Boards can be escalated for a number of issues, including those associated with specific services or organisational issues, and do not need to escalated solely due to performance reasons. NHS Ayrshire & Arran, NHS Borders, NHS Highland, NHS Lothian, NHS Tayside are all currently at level 3.
In November 2019 NHS Glasgow & Greater Clyde was escalated to Level 4 of the NHS Scotland Board Performance Escalation Framework due to a number of concerns raised in relation to infection prevention and control, the environment and operational effectiveness of the QEUH since opening in 2015, challenges associated with unscheduled care performance and issues with the built environment. In response to the escalation process, an Oversight Board was established by NHS Glasgow & Greater Clyde and an Independent Case Note Review was undertaken under the auspices of the Oversight Board. The Oversight Board Report and the Case Note Review Report were published on 22 March 2021. In June 2021 the Scottish Government established the Advice Assurance and Review Group which replaced the Oversight Board structure. A comprehensive action plan was developed to address all the recommendations, including those of the Independent Review commissioned by Scottish Government. A specific delivery group, chaired by the Chief Executive, provided updates to the Corporate Management Team and, in turn, to the appropriate governance committee of the NHS Board to ensure focused work was undertaken on all of the recommendations. All actions in response to the 108 recommendations from the Oversight Board Report, the Case Note Review Report and the External Review Report have been completed, with a comprehensive audit process in place. The Board was subsequently de-escalated by the Scottish Government to Level 2 from 13 June 2022.
The Chief Operating Officer for NHS Scotland has also focused on implementing the recommendations from recent Sponsorship Reviews, and strengthening the central Sponsorship function to provide support to all Sponsor Teams recommended improvements, including ensuring Framework Documents are in place for all Boards
Royal Hospital for Children and Young People, the Department of Clinical Neuroscience and the Queen Elizabeth University Hospital (QEUH)
In September 2019 the then Cabinet Secretary for Health and Sport set out that there would be an independent public inquiry to investigate the issues identified at the Royal Hospital for Children and Young People, the Department of Clinical Neuroscience in Edinburgh, and the Queen Elizabeth University Hospital and Royal Hospital for Children in Glasgow. Lord Brodie KC was appointed as Chair to the Inquiry in December 2019.
The Scottish Hospitals Inquiry commenced in August 2020. It is considering the planning, design, construction, commissioning and maintenance of both hospitals and will recommend how issues can be avoided in future capital projects. The inquiry will consider organisational culture, including whether staff concerns were appropriately considered and escalated. A set of hearings in May 2022 have now concluded with the next phase of hearings due to commence in October 2022. The inquiry is expected to run over a number of years, and witnesses are expected to be called once initial evidence has been reviewed.
Waiting Time targets and Treatment Time Guarantees
Due to the impact of the on-going COVID-19 pandemic, Boards have acknowledged that even with effective clinical prioritisation in place, the main strategic risk is the impact of growing significant waits on patient experience and outcome of care. The impact on Treatment Time Guarantees and waiting lists has affected all boards and they highlighted the challenges that are to be faced in recovering the position.
The launch of the new Urgent and Unscheduled care collaborative on 1 June 2022 will bring together teams across health and social care in an integrated way with a single common aim, to deliver the right care in the right place, optimising health outcomes for the people of Scotland. The Clinical Prioritisation Framework continues to be in place providing the principles that NHS Boards should follow when considering decisions around prioritising cases on their planned care waiting lists as we emerge and recover from the COVID-19 pandemic. The Scottish Government has now published a review of the Framework to a hybrid model that allows Boards to treat clinically urgent patients alongside those who have been waiting the longest.
During the COVID-19 pandemic, boards highlighted that elective activity was curtailed. At peak times it was suspended to allow all staffing resources to be diverted to treat the surge of COVID-19 patients but, even in between, the need for additional physical distancing and infection control measures reduced the number of people who could be seen. Given the numbers waiting and the continued impact working in an environment with COVID-19 present, the risk of not getting back to normal waiting times performance fully materialised.
Governance Arrangements (NHS Boards)
Board Chairs were encouraged to implement appropriate and proportionate governance arrangements, as described in the Scottish Government's Interim Director of Health Finance and Governance letters of 3 April and 18 November 2020. As such, NHS Boards' governance arrangements were revised to ensure they could effectively both respond to COVID-19 and discharge their governance responsibilities, maximising time available for staff to deal with COVID-19. The Boards developed and submitted their COVID-19 Remobilisation Plans in line with Scottish Government requirements. NHS Boards remained on an emergency footing throughout 2021-22.
Counter Fraud Activity
Guidance on the prevention, detection, reporting and handling of fraud is included in the SPFM. The Integrity Group is responsible for improving fraud prevention measures across the SG as well as monitoring relevant cases of suspected external and internal wrongdoing made through formal reporting lines. This includes supporting and reporting on the concerns that are raised under the Public Interest Disclosure Act 1998. The Group is also available to provide advice on the handling of specific allegations of external and internal wrongdoing where required. The Group meet quarterly and report work annually to SGAAC as part of the Annual Fraud Report. The membership of the Group is represented by Counter Fraud, Governance and Risk, Propriety and Ethics Group, Finance, Human Resources, Information Security, Scottish Government Legal Directorate and Internal Audit.
An annual report on fraud within the SG's consolidation boundary is prepared annually for SGAAC and includes any and all types of fraud, error and other acts of dishonesty such as theft which have been reported to the Scottish Government during the 2020-21 financial year excluding the NHS which is reported by NHS National Services Scotland Counter Fraud Services (NHS NSS CFS). Within the 2021-22 financial year a total of 39 cases of fraud or suspected fraud, 7 cases of error and 5 cases of wrongdoing were reported.This number excludes those cases where subsequent investigations confirmed that no actual error, wrongdoing or attempted fraud had taken place.
The SG also continues to participate in the biennial National Fraud Initiative (NFI) exercise led by Audit Scotland to help public bodies minimise fraud and error in their organisations. Audit Scotland recently published 'National Fraud Initiative in Scotland 2022' which covered the data from the 2020-21 exercise aiming to prevent and detect fraud across 132 public bodies in Scotland. The next set of data for matching for the next exercise has been submitted and we expect to see these results approximately in January 2023. These matches will be reviewed and reported on as part of the 2022-23 Annual Fraud report and the Governance Statement as in previous years.
The pandemic has continued to challenge the delivery of services across the Scottish public sector. Scottish Government welcomed the recent Audit Scotland Publication 'Fraud and Irregularity 2021-22' sharing risks and case studies to support the Scottish Public Sector in the prevention of Fraud. This publication highlights the increased risks Scottish Government have faced in regards to Fraud as a direct result of the pace, scale and pressure of spend and activity in relation to managing spend in relation to the Pandemic. This was also emphasised in the recent Audit Scotland publications 'Scotland's Economy' and 'Scotland's Financial Response to Covid 19' which focused on ensuring Scottish Government continue to monitor and manage Fraud and error arising from Business support payments.
The Head of Counter Fraud Profession has established the 2021-22 Counter Fraud Plan, setting out the strategic objectives for Scottish Government over the next three years and high level strategic fraud risk profiling for Scottish Government was also progressed. Some of the areas to be targeted included developing a Counter Fraud and Corruption Strategy and Policy for SG, analysis and evaluation of the Counter Fraud Maturity across SG, SG Risk Profiling, promoting a robust Fraud Risk Control Environment, and support arrangements for further reporting and measurement of Fraud and error loss. The Counter Fraud Team has also continued to support colleagues in relation to fraud risk within COVID-19 business support grants linked to Omicron and for Audit Scotland's report on the annual accounts.
In addition to the Counter Fraud Activity above, there is also a whistleblowing policy available to all staff. The policy covers the types of concerns that can be raised, general processes and support that can be accessed. In order to ensure that employees who raise a concern, feel safe from repercussion, and the SG maintain their commitment to confidentiality and anonymity by enabling employees to raise concerns via a number of routes, which includes the organisation's counter fraud processes.
Cyber resilience is a critical enabler as we continue towards economic and societal recovery. The landscape has changed significantly over the last few years. Whilst organisations have been focused on rapidly adapting new and hybrid working arrangements, cyber criminals have been evolving their capabilities and methods considerably in parallel.
As demonstrated very visibly by the cyber-attack on the Scottish Environment Protection Agency (SEPA) at the end of 2020, the cyber threat is very real, growing and potentially devastating. In May 2021, Audit Scotland published a blog which highlighted the risk and potential impact of cybercrime in the public sector in Scotland. Phishing continues to be the most common form of attack as a springboard for more sophisticated ransomware attacks. The Scottish Government is reviewing public sector cyber resilience and improving its strategic capability and capacity to respond to the escalating level of threat. Cyber security and resilience will require attention and focus in 2022-23.
Proportionate cyber protection is in place, including a Cyber Incident Response Plan tested through exercise. Several work streams which underpin the strategy are in progress and a Cyber Education plan has been developed. Cyber security incidents are co-ordinated as required with relevant stakeholders and the SG are demonstrating leadership around cyber resilience; sharing knowledge and learning and seeking to pro-actively identify and resolve issues. Cyber resilience is a critical enabler as we move towards economic and societal recovery. The landscape has changed significantly over the last 18 months. The Scottish Government remains vigilant and seeks to comply with central guidance.
Data Security Framework
Information assurance and security are strategic risks for the Scottish Government. Director General Corporate, as the Senior Information Risk Owner (SIRO), is the owner for these risks at Executive Team level. Corporate policies and guidance are in place to ensure that the Scottish Government meets its legislative and procedural obligations to protect the information assets and minimise the likelihood of a data loss incident. The SIRO is now supported by a Deputy SIRO.
One hundred data security incidents were internally reported to the Scottish Government Data Protection and Information Assets team in 2021-22 for the Core Departments, of which two were reported to the Information Commissioner's Office (ICO) during the year with one of these being an advisory rather than an incident. No enforcement action was taken by the Commissioner. All internally reported incidents were assessed and actions taken where necessary to minimise the likelihood of any future recurrence. The number of incidents is lower but similar to that recorded last year (115) with most being minor (misdirected e-mails or redaction errors). Directorates have continued to meet their data handling obligations during the COVID-19 response with engagement with health bodies and ICO regular and constructive. Scottish Government and NHS National Services Scotland jointly received an official reprimand from ICO in January 2022 in relation to transparency of the privacy notice on the Covid Status App. Improvements were made and ICO have now closed the matter with no regulatory action taken.
A dedicated Data Protection Officer has been in place since the introduction of the GDPR in May 2018 and registration with the ICO is up to date.
Under the terms of the Public Finance & Accountability (Scotland) Act 2000 there is a statutory duty on the Principal Accountable Officer and designated Accountable Officers to obtain written authority from Ministers or governing boards before taking any action which is considered to be inconsistent with the proper performance of the functions of an Accountable Officer.
No such written authority was required during the 2021-22 financial year, or the period up to the signature of the accounts, by Accountable Officers within the Scottish Government consolidation boundary.
Remuneration and Staff Report
The information in the Remuneration and Staff Report relating to the remuneration and pension benefits of ministers, law officers, senior management and non-executive directors; fair pay; staff numbers; staff costs and number of exit packages has been audited by external auditors.
Civil service appointments are made in accordance with the Civil Service Commissioners' Recruitment Principles, which require appointments to be on merit on the basis of fair and open competition but also include the circumstances when appointments may otherwise be made.
Director-General members of the Scottish Government Corporate Board are appointed following approval by the Head of the Home Civil Service, following consultation with the First Minister in accordance with the Constitutional Reform and Governance Act 2010. Prior to the introduction of the Constitutional Reform and Governance Act 2010, appointments were approved by the Prime Minister.
Unless otherwise stated, all of the Executive members of the Scottish Government Corporate Board, covered by this report, hold appointments which are open-ended until they choose to retire. The rules for termination of appointments are set out in chapter 11 of the Civil Service Management Code. Early termination, other than for misconduct, would result in the individual receiving compensation as set out in the Civil Service Compensation Scheme. The Scottish Government, its Agencies and the Crown Office and Procurator Fiscal Service, in line with the rest of the UK Civil Service, introduced a policy of no mandatory retirement age for the Senior Civil Service from 1 October 2009, in line with the implementation of the Employment Equality (Age) Regulations 2006. Under current arrangements, an individual's pension will become payable from age 60 if they were employed in the Civil Service prior to 30 July 2007, and in these circumstances that employee can choose to leave work and collect his or her pension at any time from age 60, subject only to compliance with the basic notice of leave requirements. The Government announced a number of reforms to civil service pensions which were applied from 1 April 2015. Subsequent pension arrangements are detailed further below in the appropriate sections.
The Civil Service Commissioners website provides further information about their work.
The Non-Executive Directors (NXDs) provide advice, support and challenge to the Permanent Secretary as Principal Accountable Officer (PAO) and Director Generals as Accountable Officers (AO). Non-Executive Directors of the Scottish Government are appointed by the Permanent Secretary for an initial period of three years with an annual review.
Two of the Scottish Government's experienced Non-Executive Directors – Annie Gunner Logan and Linda McKay – had their Terms of Appointment extended in January 2022 in order to ensure continuity in the non-executive cohort. Nichola Clyde, Neil Richardson, Jim Robertson and Fiona Ross were each re-appointed for their second three-year term as Non-Executive Directors to the Scottish Government in January 2022, following their initial appointment in 2019. Nichola Clyde sadly passed away in June 2022.
Three new Non-Executive Directors were appointed following an open recruitment process: David Martin and Jenny Stewart took up their roles in March 2022 and Belinda Oldfield commenced her appointment in September 2022. As is the case for all of our NXDs, such appointments can be terminated with one month's notice period.
Hugh Mackay concluded his appointment on 31 January 2022.
The salaries of the Scottish Government Ministers were established under section 81(1) and (2) of the Scotland Act 1998. They are paid through the Scottish Parliamentary Corporate Body (SPCB).
The remuneration of senior civil servants (SCS) is set in accordance with the Civil Service Management Code and with independent advice from the Review Body on Senior Salaries (SSRB).
In reaching its recommendations, the SSRB is to have regard to the following considerations:
- The need to recruit, retain, motivate and where relevant, promote suitably able and qualified people to exercise their different responsibilities;
- Regional/local variations in labour markets and their effects on the recruitment, retention and, where relevant, promotion of staff;
- Government policies for improving the public services including the requirement on departments to meet the output targets for the delivery of departmental services;
- The funds available to departments as set out in the Government's departmental expenditure limits; and
- The Government's inflation target.
Further information about the work of the SSRB can be found via the Office of Manpower Economics.
Within the Scottish Government the Talent Action Group (TAG), comprising the Permanent Secretary, Director of People and two Non-executive Directors, approve SCS pay structures and pay awards. They ensure that pay proposals fall within Scottish Public Sector Pay Policy, and the Cabinet Office framework for SCS pay.
The SCS pay ranges with effect from 1 April 2020:
|SCS Pay Steps||Deputy Director 1||Deputy Director 1A||Director||Director General|
|Target Rate +1 (DD1A)||£84,706|
The UK Government announced a pay pause with effect from 1 April 2021 which has impacted on SCS pay arrangements.
There were no non-consolidated payments in 2021-22.
The Permanent Secretary's salary and performance-related pay are set as part of a UK Cabinet Office framework and agreed by the Prime Minister.
Non-executive directors receive fees on a quarterly basis. Non-executive directors are also reimbursed for expenses incurred in the course of their duties.
The remuneration of the Cabinet Ministers who served over the year to 31 March 2022 and members of the Scottish Government Corporate Board is noted below.
Ministers and Law Officers
The remuneration of the First Minister and the Cabinet Ministers during the year to 31 March 2022 is shown in the table below. Ministerial salaries included in the table below are additional to the salaries and entitlements as MSPs which are borne by the Scottish Parliament. The full year salary rate for the First Minister is £93,391 (2020-21: £93,391) and for all other Cabinet Ministers is £48,449 (2020-21: £48,449).
|Salary 2021-22||Salary 2020-21||Pension Benefits* 2021-22||Pension Benefits* 2020-21||Total Remuneration 2021-22||Total Remuneration 2020-21|
|Nicola Sturgeon, MSP (1)||94,056||93,391||33,290||41,573||127,346||134,964|
|John Swinney, MSP||48,449||48,449||17,270||21,565||65,719||70,014|
|Roseanna Cunningham, MSP (2)||6,512||48,449||1,928||19,783||8,440||68,232|
|Michael Matheson, MSP||48,449||48,449||17,858||19,783||66,307||68,232|
|Fiona Hyslop, MSP (2)||6,512||48,449||912||21,565||7,424||70,014|
|Fergus Ewing, MSP (2)||6,512||48,449||1,947||19,687||8,459||68,136|
|Humza Yousaf, MSP||48,449||48,449||18,561||19,273||67,010||67,722|
|Michael Russell, MSP (2)||6,512||48,449||2,201||19,273||8,713||67,722|
|Shirley-Anne Somerville, MSP||48,449||48,449||18,561||19,273||67,010||67,722|
|Aileen Campbell, MSP (3)||5,340||48,449||2,330||19,273||7,670||67,722|
|Jeane Freeman, MSP (2)||6,512||48,449||2,594||21,695||9,106||70,144|
|Kate Forbes, MSP||48,449||48,449||18,760||18,920||67,209||67,369|
|Keith Brown, MSP (4)||42,067||-||16,346||-||58,413||-|
|Mairi Gougeon, MSP (4)||42,067||-||16,346||-||58,413||-|
|Angus Robertson, MSP (4)||42,067||-||16,346||-||58,413||-|
|Shona Robison, MSP (4)||42,067||-||16,346||-||58,413||-|
* The value of pension benefits accrued during the year is calculated as (the real increase in pension multiplied by 20) less (the contributions made by the individual). The real increase excludes increases due to inflation or any increase or decrease due to a transfer of pension rights.
(1) The First Minister's salary and total remuneration for 2021-22 includes a benefit-in-kind of £665 arising from the provision of accommodation at Bute House (2020-21: £0).
(2) Roseanna Cunningham, Fiona Hyslop, Fergus Ewing, Michael Russell and Jeane Freeman stepped down as Cabinet Ministers as of 19th May 2021. Their full year equivalent salary for 2021-22 was £48,449.
(3) Aileen Campbell stepped down as Cabinet Minister as of 11th May 2021. The full year equivalent salary for 2021-22 was £48,449.
(4) Keith Brown, Mairi Gougeon, Angus Robertson and Shona Robison were appointed as Cabinet Ministers on 20th May 2021. Their full year equivalent salary for 2021-22 was £48,449.
Scottish Government Ministers' Pay Freeze Commitment
The Scottish Parliament Corporate Body (SPCB) is required under Chapter 46, Section 81 of the Scotland Act 1998 to make provision for the payment of salaries to MSPs, Officeholders of the Parliament and Ministers. A resolution of the Parliament to pay salaries in accordance with the Scottish Parliamentary Salaries Scheme was passed by the Parliament on a free vote on 21 March 2002. The Scheme determines that the Scottish Parliamentary Corporate Body should decide the salary levels for Members and Officeholders including the Law Officers. The Scheme determines that Members' and Officeholders' salary rates should be increased annually from 1 April in line with public sector pay rises in Scotland, using the Annual Survey of Hours and Earnings published by the Office for National Statistics.
Scottish Government Ministers and the Law Officers have previously agreed to freeze pay as at their April 2009 pay level. The Salaries Scheme does not give the power to withhold an annual increase. To achieve the required reduction, pay increases are deducted from the Ministers' and the Law Officers' net salaries and repurposed for use by the Scottish Government. The disclosure reflects the salary awarded under the Scottish Parliamentary Salaries Scheme.
The remuneration, comprising of salary and pension benefits, of the serving Law Officers for the year to 31 March 2022 is shown below:
|Salary 2021-22||Salary 2020-21||Pension Benefits* 2021-22||Pension Benefits* 2020-21||Total Remuneration 2021-22||Total Remuneration 2020-21|
|James Wolffe KC (1)||60||128||30||52||90||180|
|Alison Di Rollo KC (1)||51||110||8||45||59||155|
|Dorothy Bain KC (2)||90||-||39||-||129||-|
|Ruth Charteris KC (2)||77||-||38||-||115||-|
* The value of pension benefits accrued during the year is calculated as (the real increase in pension multiplied by 20) less (the contributions made by the individual). The real increase excludes increases due to inflation or any increase or decrease due to a transfer of pension rights.
(1) James Wolffe and Alison Di Rollo served until 21 June 2021 as Lord Advocate and Solicitor General, respectively.
(2) Dorothy Bain and Ruth Charteris were appointed on 22 June 2021 as Lord Advocate and Solicitor General, respectively.
No Law Officers received benefits-in-kind.
Senior Management Team
The remuneration for the Permanent Secretary and members of the Scottish Government Corporate Board for the year to 31 March 2022 were as follows:
|Salary 2021-22||Salary 2020-21||Pension Benefits* 2021-22||Pension Benefits* 2020-21||Total Remuneration 2021-22||Total Remuneration 2020-21|
|Leslie Evans (1)||225-230||170-175||0||73||225-230||240-245|
|Liz Ditchburn (2)||110-115||130-135||4||78||115-120||205-210|
|Malcom Wright OBE (3)||-||10-15||-||-||-||10-15|
|Alyson Stafford CBE||145-150||145-150||-||-||145-150||145-150|
|Barbara Allison (4)||-||75-80||-||13||-||85-90|
|Gordon Wales (5)||-||35-40||-||15||-||50-55|
|Katrina Williams (6)||15-20||35-40||-||-||15-20||35-40|
|Elinor Mitchell (7)||45-50||85-90||7||175||50-55||260-265|
|Caroline Lamb (8)||185-190||40-45||73||16||260-265||55-60|
|Joe Griffin (9)||120-125||15-20||142||7||260-265||20-25|
|Kerry Twyman (10)||-||35-40||-||40||-||75-80|
|Jackie McAllister (11)||95-100||35-40||119||56||215-220||90-95|
|Madhu Malhotra (12)||75-80||25-30||-||-||75-80||25-30|
|Julie Humphreys (13)||-||35-40||-||29||-||60-65|
|John-Paul Marks (14)||40-45||-||23||-||65-70||-|
|Roy Brannen (15)||45-50||-||58||-||100-105||-|
*The value of pension benefits accrued during the year is calculated as (the real increase in pension multiplied by 20) plus (the real increase in any lump sum) less (the contributions made by the individual). The real increases exclude increases due to inflation or any increase or decreases due to a transfer of pension rights.
(1) Leslie Evans stepped down from the Corporate Board on 31 December 2021 and formally departed the Scottish Government on 31 March 2022. Her salary and total remuneration for 2021-22 includes untaken annual leave and an additional payment made to compensate for the three month waiting period which is required of permanent secretaries upon leaving the Civil Service. Such payments are permitted under ACOBA's Business Appointment Rules, subject to consultation with Cabinet Office. The full year salary band for this post was £170-175k.
The factors used to calculate the pension benefit are such that the value of the pension that could have been taken at normal pension age decreases as the member gets older. Instead of the pension benefit showing as a negative value in 2021-22, it is expressed as zero.
(2) Liz Ditchburn was on annual leave from November 2021 and formally retired on 31 January 2022. The full year salary band for this post was £130-135k.
(3) Malcolm Wright stepped down on 22 April 2020 for personal reasons and formally departed the Scottish Government on 31 July 2020. The full year salary band for this post in 2020-21 was £180-185k.
(4) Barbara Allison left the Corporate Board on 11 November 2020. The full year salary band for the post in 2020-21 was £100-105k.
(5) Gordon Wales left the Corporate Board on 10 July 2020. The full year salary band for the post in 2020-21 was £105-110k.
(6) Katrina Williams joined as the Director General of External Affairs on a secondment from the UK Department of Business, Energy and Industrial Strategy for an initial 6-month period from 1 November 2020 to assist with responding to the challenges of COVID-19 and the impact of EU Exit. She left the Corporate Board and the Scottish Government on 6 June 2021. Her salary and pension matters are the responsibility of her parent employer. The Scottish Government reimbursed her employer on a pro-rata basis to reflect salary, ERNIC and employer pension costs for a secondment equivalent to 0.5 full time.
(7) Elinor Mitchell was on the Corporate Board between 23 April 2020 and 10 January 2021 as an interim DG Health & Social Care. The full year salary band for this post in 2020-21 was £120-125k. On 16th November 2021 she was appointed as interim Director General of Economy. The full year salary band for this post was £120-125k. The position was taken up by Louise Macdonald OBE from 2 May 2022 for a fixed term until 1 May 2023.
(8) Caroline Lamb joined the Corporate Board on 11 January 2021. The full year salary band for this post in 2020-21 was £185-190k (restated).
(9) Joe Griffin was appointed to the role of Director General of Education and Justice on 15 February 2021. The full year salary band for the post in 2020-21 was £120-125k.
(10) Kerry Twyman served on the Corporate Board as interim Chief Financial Officer between 11 July 2020 and 22 November 2020. The full year salary band for the post in 2020-21 was £95-100k.
(11) Jackie McAllister took up the permanent post of Chief Financial Officer on 23 November 2020. The full year salary band for the post in 2020-21 was £95-100k.
(12) Madhu Malhotra was the Director of Equality, Inclusion and Human Rights between 14 December 2020 and 31 December 2021. The full year salary band for the post was £95-100k. As Ms Malhotra left the pension scheme with less than two years of qualifying service, there are no pension benefits to disclose for 2021-22 and the pension benefit for 2020-21 is restated as nil.
(13) Julie Humphreys was the interim Director of Communications and Ministerial Support between 12 November 2020 and 31 March 2021. The position was taken up by Andy Bruce from 1 April 2021. The full year salary band for the post in 2020-21 was £95-100k.
(14) John-Paul Marks was appointed as the new Permanent Secretary and joined the Corporate Board on 1 January 2022. The full year salary band for the post is £165-170k.
(15) Roy Brannen joined the Corporate Board on 16th November 2021 as Director General of Net Zero. The full year salary band for the post is £120-125k.
No members of the Scottish Government Corporate Board received performance pay, or payments for voluntary severance or loss of office.
Fair pay disclosures
In accordance with the FReM, reporting bodies are required to disclose the relationship between the mid-point of the remuneration of the highest-paid member of the Senior Management Team in their organisation and the median remuneration of the organisation's workforce. The median calculation includes directly employed staff paid through SG Core payroll. It covers both permanent staff and those on fixed term contracts. It does not include temporary agency staff paid locally by invoice, as these invoices are not processed through the payroll system. The ratio is calculated as the mid-point of the highest band divided by the median total remuneration.
The pay system within Scottish Government is such that there are a large number of staff on relatively few pay steps with significant gaps between some of them, resulting in a median pay figure occasionally changing markedly from one year to the next. The median pay ratio is consistent with the pay, reward and progression policies for the Scottish Government's employees taken as a whole.
|Minimum Total Remuneration||21||20|
|Maximum Total Remuneration||190||190|
|Band of Highest Paid member of the Corporate Board Total Remuneration||185-190||185-190|
The total remuneration of the highest paid member of the Corporate Board did not change between 2020-21 and 2021-22, while the total remuneration of SG employees taken as a whole increased by 2.4% between 2020-21 and 2021-22.
The 2021-22 financial year is the first year disclosures in respect of the 25th percentile pay ratio and 75th percentile pay ratio are required. We have detailed the pay ratios in the table below:
|Ratio to highest paid Director||4.7:1||4.9:1|
|Ratio to highest paid Director||5.9:1||6.1:1|
|Ratio to highest paid Director||3.5:1||3.6:1|
Equivalent information relating to senior managers of the other bodies consolidated within these accounts is given in their respective annual accounts.
Total remuneration includes salary, non-consolidated performance-related pay, and benefits-in-kind. It does not include severance payments, employer pension contributions or the cash equivalent transfer value of pensions.
No Senior Management Team officials received non-consolidated performance-related pay or benefits-in-kind.
Fees are paid on a quarterly basis for their position as Scottish Government Non-Executive Director. Remuneration for SG Non-Executive Directors was reviewed in 2021 with reference to the Public Sector Pay Policy which describes pay arrangements for Chairs, Board Members and Public Appointments in terms of a daily fee, in a tiered system. The review proposed that the Scottish Government be treated as a Tier 1 organisation to reflect the importance, size and responsibilities of the Scottish Government within the Scottish public sector. SG NXDs had previously been treated as Tier 2 members.
The review also proposed a differentiation in remuneration levels between:
- The Chair of SGAAC, who undertakes additional responsibilities compared with members of the Committee;
- The Lead NXD, who undertakes additional supporting functions for the Principal Accountable Officer;
- NXDs who are members of Corporate Board, and
- NXDs who are not members of Corporate Board.
The monetary value of benefits-in-kind covers any benefits provided by the Scottish Government and treated by HM Revenue and Customs as a taxable emolument. No non-executive members of the Scottish Government Corporate Board received benefits-in-kind. The non-executive members do not participate in the Civil Service Pension Scheme.
The fees for the Non-Executive Directors who were members of the Scottish Government Corporate Board in 2020-21 and 2021-22 were as follows:
|2021-22 Fees||2020-21 Fees|
|Janet Hamblin (1)||-||0-5|
|Hugh McKay (2)||10-15||5-10|
|Annie Gunner Logan||10-15||5-10|
(1) Janet Hamblin departed on 31 August 2020. The full year fee for this post was £5-10k.
(2) Hugh Mackay concluded his appointment on 31 January 2022. The full year fee for this post is £15-20k.
Ministers and Law Officers
The pension entitlements of the Cabinet Team for the year to 31 March 2022 are shown below:
|Accrued pension at age 65 as at 31-Mar-22||Real increase in pension at age 65||CETV at 31-Mar-22||CETV at 31-Mar-21||Real Increase in CETV|
|Nicola Sturgeon, FM||30-35||0-2.5||495||451||32|
|John Swinney, MSP||15-20||0-2.5||294||267||20|
|Fiona Hyslop, MSP||15-20||0-2.5||276||267||7|
|Michael Matheson, MSP||5-10||0-2.5||131||111||14|
|Roseanna Cunningham, MSP||5-10||0-2.5||155||152||2|
|Fergus Ewing, MSP||5-10||0-2.5||120||114||5|
|Humza Yousaf, MSP||0-5||0-2.5||48||34||9|
|Michael Russell, MSP||0-5||0-2.5||69||66||2|
|Shirley-Anne Somerville, MSP||0-5||0-2.5||60||43||11|
|Aileen Campbell, MSP||0-5||0-2.5||41||39||1|
|Jeane Freeman, MSP||0-5||0-2.5||69||66||1|
|Kate Forbes, MSP||0-5||0-2.5||24||12||6|
|Keith Brown, MSP||0-5||0-2.5||19||-||14|
|Mairi Gougeon, MSP||0-5||0-2.5||11||-||6|
|Angus Robertson, MSP||0-5||0-2.5||16||-||11|
|Shona Robison, MSP||0-5||0-2.5||17||-||12|
The real increase in CETV is the increase due to additional benefit accrual (i.e. as a result of salary changes and service) that is funded by the employer. It will be smaller than the difference between the start and end CETVs because it does not include any increase in the value of the pension due to inflation or due to the contributions paid by the employee or the value of any benefits transferred from another pension scheme. Nor does it include any increases (or decreases) because of any changes during the year in the actuarial factors used to calculate CETVs.
The Cash Equivalent Transfer Value (CETV)
This is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member's accrued benefits and any contingent spouse's pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the pension benefits they have accrued in their former scheme.
The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total ministerial service, and not just their current appointment as a Minister. The Ministers are members of the Scottish Parliamentary Pension Scheme. Full details are available on the scheme website.
CETVs are calculated in accordance with The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax which may be due when pension benefits are taken.
The pension entitlements of the Law Officers are shown below:
|Accrued pension at pension age as at 31-Mar-22||Real increase in pension at pension age||CETV at 31-Mar-22||CETV at 31-Mar-21||Real Increase in CETV|
|James Wolffe KC||15-20||0-2.5||302||265||32|
|Alison Di Rollo KC||10-15||0-2.5||250||234||12|
|Dorothy Bain KC||0-5||2.5-5||43||-||32|
|Ruth Charteris KC||0-5||0-2.5||30||-||25|
Senior Management Team
The pension entitlements of the Permanent Secretary and executive members of the Scottish Government Corporate Board are as follows (equivalent information relating to senior managers of other bodies consolidated within these accounts is given in their respective annual accounts):
|Accrued pension at pension age and related lump sum as at 31-Mar-22||Real increase in pension and related lump sum at pension age||CETV at 31-Mar-22||CETV at 31-Mar-21||Real Increase in CETV||Employer contribution to partnership pension account|
|Leslie Evans||85-90 plus a lump sum of 260-265||0-2.5 plus a lump sum of 0-2.5||1966||1956||-2||-|
|Liz Ditchburn||45-50 plus a lump sum of 15-20||0-2.5 plus a lump sum of 0||1015||1002||4||-|
|Paul Johnston||45-50 plus a lump sum of 70-75||0-2.5 plus a lump sum of 0||664||615||11||-|
|Alyson Stafford CBE (1)||-||-||-||-||-||22|
|Nicky Richards||40-45 plus a lump sum of 15-20||0-2.5 plus a lump sum of 0||670||621||14||-|
|Lesley Fraser||50-55 plus a lump sum of 120-125||0-2.5 plus a lump sum of 0||1100||1025||12||-|
|Ruaraidh Macniven||35-40 plus a lump sum of 65-70||0-2.5 plus a lump sum of 0||590||545||12||-|
|Elinor Mitchell||55-60 plus a lump sum of 120-125||0-2.5 plus a lump sum of 0||1144||1129||1||-|
|Joe Griffin||40-45 plus a lump sum of 80-85||5-7.5 plus a lump sum of 10-12.5||723||584||102||-|
|Andy Bruce||30-35 plus a lump sum of 50-55||2.5-5 plus a lump sum of 5-7.5||429||358||47||-|
|Roy Brannen||50-55 plus a lump sum of 105-110||2.5-5 plus a lump sum of 5-7.5||1006||919||50||-|
(1) Alyson Stafford chose not to be covered by the Principal Civil Service Pension Scheme arrangements during the reporting years.
Malcolm Wright, whilst he was the Director General for Health & Social Care, chose not to be covered by the Civil Service pension arrangements during the reporting year 2020-21.
Madhu Malhotra left the Civil Service pension scheme with less than two years of qualifying service, therefore, there is no pension to disclose.
There is no automatic right to a lump sum for officials who are members of the Premium Pension Scheme or the Nuvos Pension Scheme.
The real increase in CETV is the increase due to additional benefit accrual (i.e. as a result of salary changes and service) that is funded by the employer. It will be smaller than the difference between the start and end CETVs because it does not include any increase in the value of the pension due to inflation or due to the contributions paid by the employee or the value of any benefits transferred from another pension scheme. Nor does it include any increases (or decreases) because of any changes during the year in the actuarial factors used to calculate CETVs.
Civil Service Pensions
Pension benefits are provided through the Civil Service pension arrangements. From 1 April 2015 a new pension scheme for civil servants was introduced – the Civil Servants and Others Pension Scheme or alpha, which provides benefits on a career average basis with a normal pension age equal to the member's State Pension Age (or 65 if higher). From that date all newly appointed civil servants and the majority of those already in service joined alpha. Prior to that date, civil servants participated in the Principal Civil Service Pension Scheme (PCSPS). The PCSPS has four sections: three providing benefits on a final salary basis (classic, premium or classic plus) with a normal pension age of 60; and one providing benefits on a whole career basis (nuvos) with a normal pension age of 65.
These statutory arrangements are unfunded with the cost of benefits met by monies voted by Parliament each year. Pensions payable under classic, premium, classic plus, nuvos and alpha are increased annually in line with Pensions Increase legislation. Existing members of the PCSPS who were within 10 years of their normal pension age on 1 April 2012 remained in the PCSPS after 1 April 2015. Those who were between 10 years and 13 years and 5 months from their normal pension age on 1 April 2012 switched into alpha sometime between 1 June 2015 and 1 February 2022. Because the Government plans to remove discrimination identified by the courts in the way that the 2015 pension reforms were introduced for some members, it is expected that, in due course, eligible members with relevant service between 1 April 2015 and 31 March 2022 may be entitled to different pension benefits in relation to that period (and this may affect the Cash Equivalent Transfer Values shown in this report – see below). All members who switch to alpha have their PCSPS benefits 'banked', with those with earlier benefits in one of the final salary sections of the PCSPS having those benefits based on their final salary when they leave alpha. (The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the two schemes.) Members joining from October 2002 may opt for either the appropriate defined benefit arrangement or a defined contribution (money purchase) pension with an employer contribution (partnership pension account).
Employee contributions are salary-related and range between 4.6% and 8.05% for members of classic, premium, classic plus, nuvos and alpha. Benefits in classic accrue at the rate of 1/80th of final pensionable earnings for each year of service. In addition, a lump sum equivalent to three years initial pension is payable on retirement. For premium, benefits accrue at the rate of 1/60th of final pensionable earnings for each year of service. Unlike classic, there is no automatic lump sum. Classic plus is essentially a hybrid with benefits for service before 1 October 2002 calculated broadly as per classic and benefits for service from October 2002 worked out as in premium. In nuvos a member builds up a pension based on his pensionable earnings during their period of scheme membership. At the end of the scheme year (31 March) the member's earned pension account is credited with 2.3% of their pensionable earnings in that scheme year and the accrued pension is uprated in line with Pensions Increase legislation. Benefits in alpha build up in a similar way to nuvos, except that the accrual rate is 2.32%. In all cases members may opt to give up (commute) pension for a lump sum up to the limits set by the Finance Act 2004.
The partnership pension account is an occupational defined contribution pension arrangement which is part of the Legal & General Mastertrust. The employer makes a basic contribution of between 8% and 14.75% (depending on the age of the member). The employee does not have to contribute, but where they do make contributions, the employer will match these up to a limit of 3% of pensionable salary (in addition to the employer's basic contribution). Employers also contribute a further 0.5% of pensionable salary to cover the cost of centrally-provided risk benefit cover (death in service and ill health retirement).
The accrued pension quoted is the pension the member is entitled to receive when they reach pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over pension age. Pension age is 60 for members of classic, premium and classic plus, 65 for members of nuvos, and the higher of 65 or State Pension Age for members of alpha. (The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the two schemes, but note that part of that pension may be payable from different ages.)
For 2021-22 Scottish Government employers' contributions of £131m (2020-21: £114m) were payable to PCSPS at one of four rates in the range 26.6% to 30.3% of pensionable pay, based on salary bands. The Scheme Actuary reviews employer contributions every four years following a full scheme valuation. The contribution rates are set to meet the cost of the benefits accruing during 2021-22 to be paid when the member retires, and not the benefits paid during this period to existing pensioners.
For 2021-22 the value of Scottish Government employers' contributions relating to the partnership pension account was £795k (2020-21: £532k). There were no contributions due to the partnership pension or prepaid at the balance sheet date.
Further details regarding the Civil Service pension arrangements are available on the scheme website.
Cash Equivalent Transfer Values for Civil Service pensions
A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member's accrued benefits and any contingent spouse's pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies.
The figures include the value of any pension benefit in another scheme or arrangement which the member has transferred to the Civil Service pension arrangements. They also include any additional pension benefit accrued to the member as a result of their buying additional pension benefits at their own cost. CETVs are worked out in accordance with The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax which may be due when pension benefits are taken.
Real increase in CETV
This reflects the increase in CETV that is funded by the employer. It does not include the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits transferred from another pension scheme or arrangement) and uses common market valuation factors for the start and end of the period.
Court of Appeal judgement on public sector pension reforms
In 2015 the UK Government introduced reforms to public sector pensions. Most civil servants were moved into a new ("alpha") pension scheme. In December 2018, the Court of Appeal ruled that the transitional protection provided to some members of the judicial and fire fighters' schemes as part of the reforms amounted to unlawful age discrimination. On 15 July 2019 the Chief Secretary to the Treasury made a written ministerial statement confirming that, as 'transitional protection' was offered to members of all the main public service pension schemes, the difference in treatment will need to be removed across all those schemes for members with relevant service.
Following consultation, the UK Government announced '2015 Remedy' on 4 February 2021 according to which all members of civil service pensions who continued in service from 1 April 2022 onwards do so as members of alpha. Classic, classic plus, premium and nuvos were closed in relation to service after 31 March 2022.
The McCloud 2015 Remedy project formally commenced in April 2021 to address the discrimination deemed to have affected younger members when the reformed schemes were introduced in 2015. The decision announced in February 2021 was that a Deferred Choice Underpin would be introduced allowing members to choose which scheme they wished to be part of for the remedy period which spans from 1 April 2015 to 31 March 2022. Active and deferred members will have the opportunity to make that choice on retirement while retired members will have their award assessed separately for any detriment and they can also choose which scheme benefits they wish to take with their pension payment being retrospectively amended.
Further information regarding this discrimination, the latest update on the legislative process and scheme valuations can be found on the Civil Service Pensions website.
People and Culture
Staff numbers and related costs
|Staff numbers (Full time equivalent)||No. of Special Advisers||Permanent Staff||Other||2021-22 Total||Restated 2020-21 Total|
|Constitution, External Affairs & Culture||149||14||163||132|
|Deputy First Minister & Covid Recovery||229||40||269||213|
|Education & Skills||1,371||210||1,581||1,444|
|Finance & Economy||1,671||175||1,846||1,706|
|Health & Social Care||155,478||6,311||161,789||155,505|
|Justice & Veterans||4,571||26||4,597||4,514|
|Net Zero, Energy & Transport||1,046||71||1,117||1,026|
|Rural Affairs & Islands||1,634||90||1,724||1,653|
|Social Justice, Housing & Local Government||3,051||227||3,278||1,978|
|Crown Office and Procurator Fiscal Service||2,153||101||2,254||1,912|
|SG Corporate Board||14||14||12|
|Wages and Salaries (Permanent staff)||7,467||7,131|
|Social security costs (Permanent staff)||779||716|
|Other pension costs (Permanent staff)||1,396||1,275|
|Non-Permanent Staff (including Agency, temporary, contract staff and inward secondments)||592||431|
|Less recoveries in respect of outward secondments||(173)||(157)|
|Total net costs||10,061||9,396|
|Exit Packages Cost Band||No of compulsory redundancies agreed 2021-22||No of other departures agreed 2021-22||Cost of exit packages 2021-22 £000||No of departures agreed 2020-21||Cost of exit packages 2020-21 £000|
|£10,000 to £25,000||-||9||132||13||219|
|£25,000 to £50,000||-||18||650||16||614|
|£50,000 to £100,000||-||44||3,071||28||1,908|
|£100,000 to £150,000||-||2||226||2||249|
|£150,000 to £200,000||-||3||489||2||175|
|£200,000 to £250,000||-||-||-||-||-|
|Total number / cost of exit packages||-||90||4,634||74||3,249|
There were no compulsory redundancies in 2021-22 (2020-21: 1)
Diversity and Inclusion
In SG our vision is to be a world-leading, diverse employer where people can be themselves at work. We are committed to building a workforce of people with a wide range of backgrounds, perspectives, and experiences, who are valued for their unique contributions in an environment, that is respectful and free of discrimination, harassment or bullying.
During 2021-2022 we continued to deliver on our two equality outcomes as an employer: to increase our workforce diversity and to foster an inclusive workforce culture. We embedded equality into our hybrid working arrangements for employees, taking a person centred approach and adapting people policies and support to meet the needs of our increasingly diverse workforce. At 86% positive, our inclusion and fair treatment score in the 2021 People Survey is our highest on record, putting the Scottish Government among the highest performing departments and agencies across the Civil Service.
SG has published the Recruitment and Retention Action Plan for Race (2020) and the Recruitment and Retention Action Plan for Disabled People (2019), and we are developing a plan for Socio-Economic Diversity (due for internal publication in late 2022). These plans highlight actions to improve diversity and inclusion in SG within those key employer areas including developing an inclusive organisational culture, strengthening accountability and embedding the key principles of an antiracist approach and the Social Model of Disability into our practices as an employer.
The implementation of both recruitment and retention action plans has developed in 2022 to focus on the delivery of a number of game-changer actions across these themes. The game-changer actions were identified in consultation with our diversity staff networks as those which would have most impact on the lived experience of colleagues, and activity and progress for the plans is now measured against these key actions. There are currently nine game-changer actions remaining for the Disability Plan and eleven for the Race plan. This model has been adopted in the development of the Socio Economic Diversity Action Plan which focusses on game-changers from the outset. Progress in delivery is reported to the Diversity and Inclusion Governance Group, which is chaired by DG Corporate, and which brings together a range of stakeholders including Network and Trade Union representatives in addition to senior allies and representatives of external organisations. The Governance Group has recently started to also focus on measuring the impact of the plans, welcoming challenge and constructive criticism to enable effective delivery.
We are committed to providing colleagues with opportunities for learning to help them understand what valuing diversity means in practice, and how to take action to build an inclusive workplace culture. The Diversity and Inclusion curriculum has been developed in two phases. The first phase provides facilitated, mandatory learning to provide foundational understanding and a digital curriculum built to supplement this. The second phase is under development and has launched initial products based on a learning needs assessment. The second phase focuses on role specific, and protected characteristic learning based on a further learning needs assessment to continue to increase the capability and understanding of colleagues beyond a foundational level.
Over the past year we have continued to build on improvements to mainstream and embed Diversity and Inclusion. Following a successful project to improve workplace adjustments using the social model of disability, we have established a dedicated workplace adjustments team. We also developed an Employee Passport as a co-production with staff networks which provides a framework to enable staff to bring their whole selves to work. It is the first of its kind in the UK Civil Service.
A comprehensive assessment of our progress towards mainstreaming equality and delivering on our equality outcomes was published in March 2021 in our Equality Outcomes and Mainstreaming Report.
Staff Relations and Equality
The annual Civil Service People Survey looks at civil servants' attitudes to, and experience of working in government departments. Every year, a Civil Service benchmark report is published along with a summary of department and agency scores. The Scottish Government staff response rate for 2021 was 75% (2020: 79%). Further information, including in regards to the consolidated agencies, can be found via our People Survey.
Staff turnover based on permanent staff average headcount in the Core Scottish Government for 2021-22 was 3.86% (2020-21: 2.85%).
In 2021-22, an average of 7.31 working days (2020-21: 5.35) were lost per staff year for the Scottish Government. The NHS Bodies in Scotland report their sickness absence rates based on contracted hours lost rather than days lost due to different shift patterns in the NHS Scotland workforce. The sickness absence rate across NHS Scotland for the year to 31 March 2022 was 5.69% of total contracted hours (2020-21: 4.67% of total contracted hours). Sickness absence rates for agencies and other consolidated bodies can be found in their individually published annual accounts.
During 2021-22 there were 57,182 male staff, 172,750 female staff and 152 who prefer not to say (restated 2020-21: 52,904 male, 163,509 female and 114 prefer not to say staff). Within these totals were 2,526 male and 2,154 female Senior Civil Servants or equivalent (2020-21: 2,174 male and 1,912 female Senior Civil Servants). These staff numbers are measured as head count numbers and not full time equivalents as used in the staff numbers table. Further information on staff composition can be found in our Equality Outcomes and Mainstreaming Report.
The number of Senior Civil Servants and equivalent by pay band are:
|Pay band||2021-22 headcount||2020-21 headcount|
|Deputy director or equivalent||3,336||3,126|
|Director or equivalent||2,073||2,004|
|Director General or equivalent||4,270||3,792|
* As noted in the section on the Senior Management team above, there was a change in Permanent Secretary during the year.
** The difference between total male and female Senior Civil Servants and the total number of Senior Civil Servants by pay band is due to the different pay ranges for Senior Management of the Core Scottish Government and NHS Scotland. These numbers include senior clinical staff in NHS.
Facility time used by recognised trade union representatives of the Scottish Government and its non-consolidated entities has been reported for the period between 1 April 2021 and 31 March 2022 as follows:
|Number of employees who were trade union officials during the relevant period||119|
|Full time equivalent employee number||116.81|
|Total cost of facility time||£516,172|
|Total pay bill spent on paying employees who were relevant trade union officials for facility time||£673,355,541|
|Facility time as a percentage of total pay bill*||0.08%|
|Time spent on paid Trade Union activities as a percentage of total paid facility time**||35.80%|
* Calculated as (total cost of facility time / total bill) x 100
** Calculated as (total hours spent on paid trade union activities by relevant trade union official during the relevant period / total paid facility time hours) x 100
|Percentage of working hours spent on facility time by trade union representatives||Number of trade union representatives|
|1 – 50%||71|
|51 – 99%||1|
The average number of disabled employees employed by the Scottish Government, its Executive Agencies, Health Bodies and the Crown Office and Procurator Fiscal Service over the year to 31 March 2022 was 3,779 (2020-21: 3,517).
Losses, Gifts and Special Payments
The following losses and special payments have been audited by the Scottish Government's auditors. Losses and special payments are in the nature of transactions which Parliament cannot be supposed to have contemplated when approving the annual Budget Act and subsequent Amendment Orders. The Scottish Public Finance Manual requires a formal approval procedure to regularise such transactions and their notation in the annual accounts.
|No of Cases||£m||£m|
|Education & Skills||2||0.30||0.11|
|Finance & Economy (1)||1,142||2.51||25.49|
|Health & Social Care (2)||2,933||3.42||14.43|
|Justice & Veterans||438||0.31||0.15|
|Net Zero, Energy & Transport||25||0.35||0.08|
|Rural Affairs & Islands (3)||110||0.06||0.28|
|Social Justice, Housing & Local Government||-||-||11.07|
(1) Losses of £22.86 million relating to the loans for vessels reorganised as assets under construction reported in 2020-21 now part of the Finance & Economy portfolio.
(2) £0.027 million irrecoverable student nursing bursaries have been included, although information was not accessible to report the number of cases involved (2020-21: £0.087 million, case number was not accessible)
(3) Losses of £0.03 million and £0.24 million reported for Economy, Climate Change & Land Reform and Rural Economy & Tourism in 2020-21 now relate to the Rural Affairs & Islands portfolio.
Details of cases over £0.30m:
|Health & Social Care: NHS Boards:||NHS: SAS: staff overpayments||0.44|
|NHS: Tayside: flood damage to hospital property||0.50|
There was one case over £0.30 million in 2020-21.
|No of Cases||£m||£m|
|Education & Skills||2||0.01||0.003|
|Finance & Economy||6||0.01||0.01|
|Health & Social Care||1,382||98.75||55.32|
|Justice & Veterans||297||4.09||3.39|
|Rural Affairs & Islands (1)||6||0.03||0.29|
|Social Justice, Housing & Local Government||32||0.008||0.005|
|Crown Office and Procurator Fiscal Service (2)||24||11.45||24.19|
(1) Special payments of £0.21 million and £0.08 million reported for Environment, Climate Change Land Reform and Rural Economy & Tourism in 2020-21, respectively, now relate to the Rural Affairs & Islands portfolio.
(2) Special payments of the Crown Office and Procurator Fiscal Service reported in 2020-21 have been restated to reflect only the cash payments made in the financial year.
Details of cases over £0.30m:
|No of Cases||£m||£m|
|Health & Social Care: NHS Boards:||Clinical Compensation Payments:|
|1||NHS Dumfries and Galloway||3.90||1.35|
|-||NHS Forth Valley||-||1.15|
|8||NHS Greater Glasgow and Clyde||22.64||-|
|Crown Office and Procurator Fiscal Service||1||Involvement with civil litigation brought against the Lord Advocate by individuals prosecuted in connection with the acquisition and administration of Rangers Football Club||11.04||24.05*|
There were 35 cases over £0.30 million in 2021-22 (2020-21: 25).
* The 2020-21 figures for the Crown Office and Procurator Fiscal Service have been restated to reflect only the cash payments made within the financial year 2020-21.
The Scottish Government made gifts in the year as follows:
|No of Cases||£m||£m|
|Constitution, External Affairs and Culture||2||0.0003||-|
There were no cases over £0.30 million in 2021-22 (2020-21: nil).
Principal Accountable Officer
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