The new chief executive (CEO) of Scottish Water, Alex Plant, has received a “disproportionate” pay increase of 50%, sparking controversy as this flouts the public sector pay regulations that typically expect a 10% reduction, as reported by the Herald on Sunday.
Plant’s compensation for just ten months of the fiscal year 2023/24 amounted to £483,000, almost £100,000 more than his predecessor, Douglas Millican, earned in his final full year before opting for flexible retirement which led to reduced salary and pension benefits.
This has reignited calls for a revision of the public sector pay policy, especially in light of recent disclosures by the Herald about substantial bonuses awarded to Scottish Water executives, which seem at odds with government pay guidelines.
Meanwhile, Scottish Water is dealing with potential strike actions after proposing a mere 3.4% pay rise for its employees, a move that has been met with union rejection. Additionally, water charges in Scotland are set to rise by nearly 10% come April.
In his initial ten months as chief executive, Plant’s total earnings included a significant £170,000 in performance bonuses and other benefits, on top of a basic salary of £246,000.
Notable among these benefits was a one-time £73,000 payment for relocating to Scotland from his previous position at Anglian Water, which covered relocation assistance, accommodation allowance, and a contribution towards Land and Building Transaction Tax for his new residence.
In comparison, Millican’s last fully remunerated year in 2021/22 saw him receiving £378,000, which included a basic pay of £267,000 and £104,000 in bonuses and benefits, though he chose to waive £96,184 of his bonus, donating it to the World Vision charity.
Plant’s monthly earnings of £48,300 exceed Millican’s by £16,800, and even his basic monthly salary of £24,600 is 10.6% higher than Millican’s £22,250.
This pay increase sharply contrasts with the Scottish Government’s long-standing public sector policy established in 2010, which generally anticipates at least a 10% salary reduction for new chief executives in comparison to their predecessors to ensure value for money and address recruitment and retention challenges.
The government’s guidelines specify that total remuneration, including salary, performance payments, and other non-salary rewards, should reflect this expectation.
Advice suggests removing existing bonus schemes or appointing new chief executives at lower salaries as methods to achieve these reductions, with a thorough business case required to justify any lesser reduction.
