CALLS have been made for a rethink on public pay rules in the wake of a row over the £295,000 salary of the new chief of the nation's state-owned water supplier.
It emerged that ministers approved the appointment of Alex Plant, the new chief executive of Scottish Water, after a recruitment process undertaken by Scottish Water’s board and led by chairman Dame Susan Rice.
The GMB Scotland union raised concerns that Scottish Water's new chief executive Alex Plant was receiving £50,000 more than the Scottish Government-set public sector pay rules had laid down.
The Scottish Government's pay policy published in March stated a continuing "expectation" that there should be a 10% cut for all new chief executives.
But the Scottish Government insists that in this instance there was no breach of the rules.
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A Scottish Government spokesman, in saying there was no breach, referred to pay policy guidance which has been in place since 2010 and is updated annually, saying the expectation of a reduction in a new chief executive's 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.
The Scottish Government declined to explain how the caveat relates directly to the appointment of the Scottish Water chief executive.
It has been confirmed that Mr Plant's appointment announced on June 1 was made by Scottish Water’s board led by Dame Susan Rice and his selection was signed off by Scottish ministers.
Mr Plant has been given an annual salary of nearly £300,000 - £22,500 more than his predecessor. State-owned company Scottish Water, is included amongst the list of bodies, including Scottish Government's core directorates, its associated departments, agencies and corporations that the pay policy applies to. Other state-owned firms such as CalMac and Ferguson Marine are not included on the list.
GMB Scotland says the guidance "demolished" the credibility of the rules and said trade unions should be fully consulted on them in future.
Claire Greer, GMB Scotland organiser, said the caveats made the strategy "meaningless" while allowing the Scottish Government to "justify the unjustifiable".
And Daniel Johnson, Scottish Labour's economy, business and fair work spokesman said the Scottish Government needed to urgently reassure public sector workers over pay.
Douglas Millican
It comes as the union has been conducting a consultative strike ballot of thousands of Scottish Water workers in what it calls a "formal dispute" over pay and a job restructure.
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.
It also states strategic aims of "protecting those on lower incomes, continue the journey towards pay restoration for the lowest paid and recognize recruitment and retention concerns".
The row erupted after it was revealed that Mr Plant, rather than having a cut to his salary saw an increase of over 8% compared to his predecessor Douglas Millican.
Mr Plant has been given an annual salary of £295,000, when it is felt that according to the pay policy 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.
She hit back at the position of the Scottish Government saying: “The strategy could not have been any clearer in stating the salary of new chief executives of public sector organisations should be reduced by 10%.
“Now, we are told that subsequent guidance published months later means that what was a clear expectation is now more of an aspiration, a vague notion, and that there is, in fact, no obligation on public sector boards to curb the pay of CEOs at all.”
Greer said the strategy on public pay is clearly not worth the paper it is printed on and said only trade union involvement and consultation on future strategies would deliver meaningful change.
She said: “It is an absolute nonsense and insults every public sector worker being told black is white and up is down.
“Meanwhile, Scottish Water is given the get-out clauses it needs to ignore the original guidelines laid out in the public pay strategy and offer its new chief executive far more than his predecessor while squeezing the pay of the lowest-paid workers.
“Those at the top are having their cake and eating it while our members are being asked to live on their crumbs.”
Mr Johnson added: “Public sector staff rightly have grave reservations about a pay policy which seems to mean whatever ministers want it to mean.
“A future curb on the salaries of new chief executives was included in the strategy for good reason but has been so watered down that it has been rendered meaningless.
“All firms should treat workers with fairness and respect but those in the public sector, acting on our behalf, have an even greater responsibility.
“I would urge Scottish Water to seriously engage with the unions to resolve this unfolding dispute while the Scottish Government must ensure it has a public pay policy that is fit for purpose and does not say one thing while meaning another.”
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 has previously stated that the chief executive's salary was "less than any comparable water company chief executive in Great Britain".
It said it would not comment on the response to the Scottish Government's pay rules.
Scottish Water has previously said it did not want to comment on the Scottish Government's public sector pay policy.
But a spokesman previously said: “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."
A Scottish Government spokesperson said: Our public sector pay policy includes a requirement for a 10% reduction for new Chief Executive appointments, except in specific instances where market conditions or recruitment and retention issues mean that this reduction cannot be achieved, provided that a robust business case has been approved. These policies have been in place since 2010.
“The Scottish Government is satisfied that the correct process was followed by the Scottish Water board in setting the remuneration of the incoming chief executive.”
The row 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.
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