Scottish Government

D: THE STANDARD ELEMENTS OF EVERY PUBLIC BODY'S PAY REMIT

What costs must you include in your pay remit?

1. You must cost all increases in pay and benefits that you propose to make and include them in the pay remit proformas, along with the increases to allowances, overtime rates, employer's pension contributions and National Insurance that result (this is set out in more detail in the Technical Guide). This is the total increase for staff in post of your proposals and reflects the aggregate value of the increases in pay and benefits that existing staff will receive.

2. There are limits on the increases in pay and benefits that you can make in any year, with the exception of the one-off costs of harmonising terms and conditions of employment of different groups of staff as a direct result of the Scottish Government's drive to have fewer, better structured national public bodies. Harmonisation usually involves the buying-out of the more beneficial terms and conditions of employment for one group of staff. The simplification of the public sector landscape in Scotland will affect many public bodies and bring long-term benefits. To make this simplification possible you will note the short term costs of harmonisation in the pay remit proforma and business case but these costs will not count against the Public Sector Pay Policy limits. You will, of course, need to be able to accommodate the actual costs within your agreed budget for the period.

3. However, if your pay remit includes the merger of groups of staff and you plan to increase the pay or non-pay benefits for the existing staff group then you must include the costs of such increases in the remit proformas. These costs will count against the policy limits.

4. You should always seek the advice of the Finance Pay Policy team in more complex situations.

What is the limit for pay remits approved under this policy?

5. There may be two parts to your pay remit proposal:

• standard elements that will be evident in all pay remits. In 2008-09 there is a limit on the increases to the standard remit elements that is set out in Chapter D paragraphs 8 & 10; and
• proposals to address the key pay policy priorities ( Chapter C paragraph 1).

6. In 2008-09 there is an overall limit on the increase that you can add to your paybill for both parts of your pay remit proposal which is set out in Chapter E paragraph 4.

What is the standard remit limit for pay remits approved under this policy?

7. Whilst paragraphs 1-4 above set out what you need to cost in your pay remit, the standard remit limit will only apply to the standard elements that form part of all pay remits. These are:

• the basic award;
• progression;
• consolidated performance payments;
• non-consolidated payments over and above the non-consolidated pot that is included the baseline paybill; and
• increases in the costs of overtime, allowances, employers pension contributions and National Insurance Contributions that result from the increases in pay and benefits that you propose.

8. The limit for the standard remit elements in paragraph 7 is an increase for staff in post ( ISP) of 3.75%. This is an absolute limit for each year of a remit approved under this policy. This annual limit is to make sure that public sector pay proposals remain sustainable over time.

9. Public bodies must seek approval for all pay remit proposals. You should base your proposals on existing costs of progression and existing arrangements for non-consolidated payments and any consolidated performance payments plus a basic award in line with the policy (see below). Therefore the ISP will not automatically be at the standard remit limit. If existing arrangements rolled forward to 2008-09 generate an ISP greater than 3.75% then you must consider how your proposals can be brought within the standard remit ISP limit. If you want to make changes to existing arrangements then you should provide sufficient information within the business case to support them.

What is the limit on the Basic Award? 10. The basic award forms part of a remit and is one of the standard remit elements. In pay remits approved under this policy the limit on the basic award is 2.00%.

11. If you are planning a multi-year pay deal, you can average the basic award over the period of the pay remit so long as the average basic award is no more than 2.00%.

13. Whatever the level of basic award you wish to apply, the standard remit limit of 3.75% ISP applies in each year.

14. As well as the basic award, you may seek approval for increases to pay range minima and maxima as part of any proposals to address the key pay policy priorities (see Chapter E).