Severance Policy in Devolved Public Sector in Scotland

The Scottish Government seeks to ensure severance arrangements for the wider devolved public sector are fair and equitable while providing value for money for the people of Scotland.

We asked you for your views on severance arrangements in Scotland: whether recent powers deriving from the Small Business, Enterprise and Employment Act 2015 and allowing Scottish Ministers to bring forward subordinate legislation on capping and recovery of severance payments in the devolved public sector in Scotland should be used - or other reforms taken forward - to achieve better outcomes, deliver best value to taxpayers, flexible and responsive public services and a fair deal for public sector employees, through the introduction of an exit payment cap, recovery of exit payments and changing exit payment terms.

The consultation launched on 31 March 2017 and closed on 23 June 2017.  The consultation sought views on four options:

• The status quo;
• Non-legislative change;
• Replicating UK arrangements; and
• A hybrid approach mixing legislative and non-legislative arrangements.

We received 57 consultation responses from 9 individuals and 48 organisations, including 15 local authorities and 13 representative bodies.

Two-thirds of respondents who answered the direct question on policy options supported the status quo.

The key themes from respondents, included;

• Severance payments not being a significant issue in Scotland;
• Sufficient governance and scrutiny around exit payments already; and
• Reduced exit payments terms, would make reform and reorganisation harder to achieve.

We have published the non-confidential responses to the consultation and analysed all responses.  Ministers have decided not to legislate for changes to severance policy and to introduce an administrative change only, which will include a cap on exit payments, measures on re-employment and improved value to the public purse.

An administrative approach provides a proportionate response to the consultation, while recognising the need to address a relatively small number of cases where severance payments were not well handled and perceived as excessive.

We will strengthen the governance and accountability of severance payments, by updating the Scottish Public Finance Manual and enhancing training and support for Accountable Officers and Board Members.

We will continue to work with key stakeholders to shape the changes to severance arrangements and expect the changes to be launched by the end of 2019.