Foreword by the Cabinet Secretary for Finance
I am pleased to set out the Scottish Government's Public Sector Pay Policy for 2021-22. This maintains our distinctive Scottish approach to public sector pay and continues our focus on sustainability, reducing inequalities and promoting wellbeing. Our commitment to tackling poverty is again underlined by the specific measures set out to address low pay, recognising that the impacts of the COVID-19 pandemic have not been felt equally across society.
This pay policy balances the need to recognise the value of Scotland's public sector workforce, particularly in response to the pandemic, alongside the challenging outlook for public finances. Fair and progressive, the policy places specific emphasis on measures to tackle low pay and deliver on this Government's Purpose and National Outcomes.
I am clear that the pay freeze announced by the Chancellor at the UK Spending Review fundamentally misjudges the value of front line workers in battling this pandemic. It also fails to support our economic recovery. I am therefore pleased to announce that, as well as continuing our commitment to the real Living Wage, newly increased to £9.50 per hour, the policy introduces a guaranteed cash underpin of £800 for those earning £25,000 and below. This delivers a pay increase of more than three per cent to the lowest earners and represents a significant step on our journey to pay restoration. The policy also delivers a progressive above-inflation headline pay increase of two per cent for those earning over £25,000 and up to £40,000 with a one per cent pay uplift to those earning over £40,000 and up to £80,000. To reduce the overall income gap, a capped increase of £800 for those earning above £80,000 is in place.
As a step towards a post-pandemic recovery, I have introduced discretion for employers to work towards standardising to a 35 hour working week if and when it is practical to do so. It is my expectation that, while any reduction in the working week should result in no negative impact on productivity, it should be achievable through normal negotiations, as part of a progressive and agreed package of measures including terms and conditions that support new ways of working.
I wish to put on record again my gratitude to public sector workers in Scotland for their response to the pandemic and their approach to changes in the way work is delivered. My thinking on this journey has been invaluably informed by regular dialogue with trade unions, as the Government continues to support the development of a wellbeing economy. This Government remains committed to building on our strong working relationship with trade unions and employers, re-affirming our wish to protect public sector jobs and front line services.
I am confident that working together we will rebuild our economy and deliver a better tomorrow for Scotland.
Kate Forbes MSP,
Cabinet Secretary for Finance