Scottish Water accused over £50k salary rise for new chief

But union leaders have raised concerns that  according to the Scottish Government pay policy - there should have been a 10% cut.

It comes as unions are today to conduct a consultative strike ballot of thousands of Scottish Water workers in a dispute over pay and a job restructure.

GMB Scotland described the pay policy 'breach' as "sheer hypocrisy" saying that the planned restructure of pay bands at Scottish Water will cut the wages of their lowest paid workers in real terms.

It comes as Scottish Water customers have seen their bills rise by over 9% in the last two years. They increased by 5% from April 2023 after a 4.2% hike in 2022.

The Scottish Government's public sector pay policy states that there is an "expectation" that there is a 10% reduction in the pay packages of all new chief executive appointments.

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The latest pay policy also states strategic aims of "protecting those on lower incomes, continue the journey towards pay restoration for the lowest paid and recognise recruitment and retention concerns".

But a row has erupted as it has been revealed that Mr Plant, rather than having a cut to his salary has seen an increase of over 8% compared to his predecessor Douglas Millican.

Douglas Millican

Mr Plant, who took over from Mr Millican in May, has been given an annual salary of £295,000, when according to the pay policy it is felt he should have been on £50,000 less. Mr Millican had been on £272,500.

Claire Greer, GMB Scotland organiser, has strongly criticised Scottish Water for "dramatically increasing" the salary of its new chief executive.

Concerns surfaced as Scottish Water customers saw their bills rise by over 9% in the last two years. They increased by 5% from April 2023 after a 4.2% hike in 2022.

Scottish Water, which is responsible for the public water supply and waste water services of five million people and directly employs nearly 4,500 people said the new chief executive's salary was "less than any comparable water company chief executive in Great Britain".

GMB Scotland and sister unions are due launch a two-week consultative ballot of thousands of Scottish Water workers over industrial action today and tomorrow over the pay dispute with managers accused of trying to "force through" changes to pay and conditions without agreement.

The union has accused the water company of "bad faith" saying that they had contacted staff directly to detail the below inflation pay offer linked to a new grading structure.

Following a meeting of unions last Friday, they agreed to enter formal dispute with Scottish Water saying managers sent an email to all staff detailing the proposed new pay structure without proper consultation or agreement.

Ms Greer said the company’s "needlessly inflammatory" actions have triggered an unnecessary dispute that would have been avoided if managers had accepted the Scottish Government’s public pay strategy.

She said: “It is disappointing but sadly unsurprising that Scottish Water has ignored all agreed procedures to forge consensus with staff when its board is clearly happy to flout official guidelines on public pay.

“The anger and disappointment of our members is absolutely justified when the lowest-paid among them are being asked to accept a substantial pay cut while the new chief executive is offered 20% more than he should be according to the public pay strategy.

Taken from the Scottish Government latest public sector pay rules document.

“Curbing the exorbitant pay packages of public service chief executives while protecting and improving the salaries of the lowest-paid is integral to that strategy but Scottish Water is attempting to do the exact opposite.

“It is sheer hypocrisy from a company that is acting more like a rogue employer than a company owned by the public and meant to be working for the public.”

The pay policy sets out the framework for pay increases for staff pay remits, senior appointments ‑ and all public appointments.

The Scottish Government in its latest 2023/24 pay policy said the intention was to "balance the fairness, affordability, and fiscal sustainability of pay awards in recognition of a tight financial outlook". It said it supports a commitment to tackle poverty and that delivery of measures for the low paid and "pay caps for high earners" should form part of a progressive, affordable and sustainable solution.

It said: "It reflects the need for public service reform, where decisions on pay and the size and shape of the public sector workforce must be connected to the effective delivery of public services.

"The exceptional economic turmoil over the past year and the associated fiscal pressures sets an important context for pay decisions for 2023-24. The pay strategy reflects the Scottish Government’s limited funding position as set out in the 2023-24 Scottish Budget. It also takes account of the impact that high inflation has had on households and governments whilst balancing the need for sustainable public services.

"These challenges have led to a level of industrial unrest on a scale not witnessed for over a decade."

Net new borrowing by Scottish Water from the Scottish  Government is expected to be to the tune of £196m in 2023/24 to carry out its activities.

Scottish Water operates under an annual borrowing limit set by the Scottish Government. The annual borrowing limit controls the amount by which Scottish Water can increases externally sourced finance.

As at March 31, 2023, government loans totalled £4.5 billion.

The GMB say the restructure will mean the lowest paid being impacted more than those on higher salaries.

They say Scottish Water want to narrow the pay bands at the bottom meaning lowest paid workers hit the top of their pay band more quickly.

They say presently, a member of staff starting on £21,000 a year won’t hit the top of their band until they earn £28k. But the changes would mean they would be stuck on £23,000.

GMB say the workers ability to earn will therefore be reduced as their pay band will be significantly narrowed, which means they will have a real-terms pay cut.

But they say higher paid members of staff will have their pay band widened which allows them to continue with potential pay increases.

The union says it is "robbing from the lowest paid to cushion the higher paid".

A source said: "The business openly admits there will be some winners and some losers in this restructure but the losers are all at the bottom of the pay grades.

"There are low paid members who due to the restructure could potentially receive a pay increase of 0.3% and the remaining percentages paid as non consolidated lump sums. In other words, a buyout to railroad members into a pay review that has no transparency and no fairness."

Scottish Water said it did not want to comment on the Scottish Government's public sector pay policy and the expectation that there is a 10% reduction in the pay packages of all new chief executive appointments.

But a spokesman added: “Executive pay at Scottish Water reflects the essential nature of the water and waste water services to the daily lives of five million people, public health and supporting a flourishing Scotland.

“As the fourth biggest water and waste water utility in the UK, we must attract and retain leadership talent in competition with private sector utilities and other organisations. Executive remuneration is set by Scottish Water's board to attract and retain individuals who can achieve high performance and deliver good value for customers.

“Negotiations between Scottish Water and the trade unions are continuing. We are not in dispute with our trade unions. Collective bargaining continues and we are committed to that process.

“What we are proposing is a fair deal. Every Scottish Water employee subject to pay increases negotiated with the trade unions would receive a minimum of 8% in a pay award this year, backdated to July 1, 2023.

“We are continuing to negotiate and engage openly with trade unions on bringing forward a proposed modernised reward system which is fair and transparent.

“Employee surveys have clearly indicated that modernising pay and progression is much needed with current arrangements having been in place for almost two decades. Having a clear and consistent way of describing jobs and how we value them will assist significantly as we continue to deliver service excellence for our customers across Scotland.”

A Scottish Government spokesman later said: “The remuneration of Scottish Water’s chief executive is a matter for the Scottish Water board. We expect all public sector organisations to adhere to the Scottish public sector pay strategy..."

The spokesman also later said that in this instance there was no breach of the public sector pay strategy.

He said the expectation of a reduction in pay was predicated on the ability to fill the post with a suitable candidate having regard to external market levels, value for money and recruitment and retention issues.