Public sector bonus review urged

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The Scottish Government has been urged to review bonuses for senior public sector managers, amid the recession.

The Scottish Parliament's powerful finance committee also said ministers should reduce pay bargaining and prove low wages were being tackled.

Public sector chief executives in Scotland were paid bonuses totalling £190,000 in 2007-08.

The cross-party committee's call came after a probe into public sector salaries.

The public sector pay policy covers 38 senior employees working for bodies such as Scottish Enterprise and the health service, who command a total wage bill of £3.6m.

Although the maximum potential bonus is 10% of basic salary, under current policy three chief executives are eligible for higher rewards, the report stated.

We have asked chairmen to invite their chief executives to consider waiving all or part of any bonus that might be due in 2009-10 Scottish Government spokesman

Scottish Water chief executive Richard Ackroyd and the organisations' directors are eligible for a bonus of up to 40%, a policy agreed by the last Scottish Government over concerns senior staff were leaving for better-paid positions.

Philip Riddle, the chief executive of tourism agency visitScotland, is eligible for a bonus of up to 15% of his basic salary.

Bonus payments for the boss of economic development agency Scottish Enterprise was cut from 15% to 12.5% in 2005, with the expectation of a further cut, to 10%.

Finance committee convener Andrew Welsh said: "The evidence provided during this inquiry has left the committee in no doubt that there are areas of the existing public sector pay policy in Scotland which could be improved.

"In terms of the policy for senior appointments, the committee makes clear to the Scottish Government that the policy of paying bonuses to senior staff should be reviewed."

A Scottish Government spokesman said work was underway to address many of the points raised in the committee report.

The spokesman added: "We have also tightened the criteria on chief executives' bonuses and have asked chairmen to invite their chief executives to consider waiving all or part of any bonus that might be due in 2009-10.

"Work is also in hand looking at alternative approaches to the remuneration of Chief Executives, particularly in relation to bonuses.

The public sector pay policy covers 48 bodies in Scotland, employing 30,000 staff.