Item 2 is to take evidence for our inquiry into public sector pay. The committee has already taken some evidence on the subject. We agreed to take further evidence from the Scottish Government's pay policy unit, a sample of public bodies and the trade unions representing staff of those bodies. We agreed to focus on the process of agreeing pay remits and negotiating settlements and to hear from all the witnesses in one panel, so that we could explore their different perspectives on the issue.
Thank you for inviting Scottish Water to give evidence to the committee. I understand that the theme of today's evidence session is Government pay policy, procedures and processes. Although you did not specify who should attend on the company's behalf, I thought that it might be appropriate for the chair and chief executive to do so; I hope that that is okay with members.
The committee may find it helpful if I provide some brief factual information on the pay remit process, in support of the written evidence that we have submitted.
I have been a full-time trade union negotiator for 12 years. I have spent almost all that time dealing with the private sector. In 2006, I was appointed the organiser responsible for Scottish Water. My experience of the private sector is that private sector companies invariably operate pay guidelines, too. Many of the companies that the GMB negotiates with in the private sector are branch plants of larger conglomerates and receive instruction from the centre about their pay remits.
Unison's position is that the current pay process is broken and needs to be reformed radically. Richard Leonard outlined some of the practical difficulties—I agree with him about that. The pay guidance is inevitably settled after the budget, which means some time between April and June. That does not tie in with the variety of pay settlement dates that we have in the bargaining units that are covered by that guidance. The guidance is not only extremely rigid but extremely complex. Because it is rigid, when we get down to local bargaining, we are not really bargaining at all. When the issue was raised previously, I pointed out that, in trade union jargon, we wonder whether we are negotiating with the monkey or the organ grinder. I am afraid that the reality is that, in general, we negotiate with the monkeys. The organ grinder is the minister. The minister sets the pay remit, which means that the negotiations are simply not meaningful and are not free collective bargaining.
For the Scottish Commission for the Regulation of Care, we have Mr Weir.
That is our Sunday name. I will use our everyday name, which is the care commission.
Clearly, we are entering deep and complex waters. I thank all our panel members for underlining the importance, size and complexity of public sector pay negotiations.
I have one question for Scottish Water and another for the pay policy unit.
We have hundreds of millions of pounds of capital to spend, but not the staff to undertake that capital spend. We hire contractors to do the work. They are household names—name one that we are not using. We hire loads of people to do the work. They take on chunks of work that they bid for and win. We hand out the work and they go and build it under our direction. We do not see the rate that every contractor is earning, but we know what the job is costing. We hire contractors such as Black & Veatch, Balfour Beattie and Costain and they give us a cost for the job, so I cannot give you precise rates.
No, I think that you have covered the issues.
The WIC benchmarks the cost of what we do against the 10 big water and sewerage companies in England and Wales and judges, sometimes harshly, whether we are doing well.
Are the figures that you gave of £450 million and £670 million attributable to contractors alone?
No. We are spending £2.5 billion over four years. Up to 20 per cent of that is capital in as much as it is spent on buying things such as vans and information technology. Of the remaining 80 per cent, half—40 per cent of the total—is run in-house, but the in-house people hire people from outside as well. The other 40 per cent of the total is spent by Scottish Water Solutions, which is a group of two large consortia plus Scottish Water, which is a 51 per cent shareholder. It has hundreds of millions of pounds' worth of work to deliver over the four years, which is given to it in parcels.
The figures that you gave were £450 million and £670 million.
In the first year of this period, we spent £450 million; the next year, we spent £620 million or so—Richard Ackroyd is going to tell me that it is more.
It was £680 million.
And next year it will be—
About £660 million.
That is just the total that comes under the heading of cap ex—in other words, not operating costs.
Is that capital expenditure, then?
Yes.
It goes on the asset base. Scottish Water's asset base is around £4 billion. Each year, it goes up by the amount that we spend on capital, and reduces by the depreciation. The net of that is what the asset base is currently worth, which is about £4 billion.
I understand that. You explained that you have large-scale contracts. How much do you expend on those contracts?
I cannot give you a precise breakdown—we can find that information for you. We operate a mixed economy, which varies over time—that is the other factor to play into this. My guess would be that a substantial majority of the capital programme will be cost incurred through contractors. However, the majority of our operating cost, which is another £300 million-plus a year, is in-house staff costs rather than contractors.
When you draw up those contracts, does a specific element of the contract relate to staff costs?
No. We do not prescribe the terms on which our contractors employ people. They have to abide with the general law of the land, good practice, and health and safety requirements, but how they manage their staff—how they pay them—is their business.
So when you are drawing up the contracts, all that you are really interested in is the delivery of the particular project for Scottish Water.
We are interested in successful, cost-effective delivery and getting a high-quality health and safety performance.
I have a question for the pay policy unit. There are six people in the unit. You have to deal with a number of complex issues, some of which we have discussed today. Those include grading and job evaluation, which require a lot of expertise. Of those six people, how many have a human resource qualification? Clearly, such a qualification would help to address the issues that we are discussing today.
Mr Kelly's question reminds me of a similar one that I tried to answer on the previous occasion that we were here. The answer is that none of us has an HR qualification. If we need to, we draw on HR expertise from elsewhere in the Scottish Government.
That follows the model that the Treasury uses. It has no HR specialists on its team and would go to colleagues with that expertise when necessary.
You will excuse me if I go over old ground, but I am new on the committee and a couple of things have come up that I want to ask about.
I might not be able to tell you right away, but Lesley Doherty has the data.
It is 10 weeks.
The arithmetic average is 10 weeks, which is below my threshold for being able to—
I apologise—I gave Alistair Brown the figures the wrong way round: the median is just under 10 weeks and the average is 11 weeks.
I told the committee that the median was under 11 weeks. In fact, it is under 10 weeks and the average is just under 11.
It is in the small print.
I will need further explanation of that. We hear from Gordon Weir that settlement can take up to two years. We know that that can happen. A pay settlement has to be agreed every year for about 50 bodies—is that right?
We are dealing with 42 in the 2008-09 pay round.
But your figures are based on 2007-08.
They are for 2008-09.
The detailed figures that I gave in my opening statement related to 2008-09, with 42 pay remits. We can provide more detailed information if the committee would find that helpful. I think that the figures that Gordon Weir quoted are at the extreme end of experience.
Perhaps I can help. The figures that I quoted were for the time taken to pay staff from the date that the payment was initially due. For example, in our first remit, we first entered into discussions in January 2006 for a pay round that was payable on 1 April 2006. There was a lot of engagement with Scottish Government colleagues before the formal submission, which is when the clock starts ticking from the pay team's point of view.
Let me get this right: you are saying that you reach the agreement and get sign-off at an average of 10 weeks.
That is 10 weeks from the date of submission of the draft remit to us. It may have been under consideration within the body for some time before that, but our clock starts ticking when the body—the care commission or Scottish Water, for example—submits its draft remit and asks for approval of it.
In other words, if we take those two things together, employees can wait for up to two years for their wage rises.
That clearly happened in the care commission's case, but I agree that that was probably at the extreme end. Even we would say that the position is improving. Because the first remit was so late and we did not work on the second one before the first was concluded, there was an in-built delay in the second of our remits.
I would be interested to know how many public bodies that applies to. From the point of view of the employee, it is of no interest at all whether it takes only 11 weeks from the point that the draft remit is handed in to the Government. The issue is wider than that.
I will pick up that point. In Unison, we sit down with our members and put a pay claim in to an employer, which kicks the process off. We do it in advance of the pay settlement date and expect to come to a deal some time around that date. If it drifts a month or two, people understand that that is reasonable. However, the process that we are discussing goes on and on, because we put the pay claim in to the employer, who goes back to the Scottish Government pay unit, which sends it backwards and forwards. If the claim is straightforward, it can be settled fairly quickly. The problem, in fairness, is all too often connected to the expertise issue that James Kelly raised. Job evaluation schemes, pay and grading remits and equal pay are not easily resolvable matters, so claims drift on and on. You can see from the timescale that Alistair Brown has given you for the care commission and Scottish Water how many times even only those two claims went backwards and forwards to deal with changes.
There might not necessarily be a problem between the bosses and the Scottish Government.
We do not know.
I am aware that we got a paper about senior executive bonuses. I do not know whether Scottish Water or the care commission can answer this, but, in the public sector, are there such things as across-the-board bonuses for junior staff, or is the bonus culture only for senior staff?
We operate what we prefer to call a performance-related pay scheme, rather than a bonus scheme, which applies to every single person who works for Scottish Water. At the lower end, there is a flat rate; if the performance is achieved, there is a potential £900 per person.
Dave Watson mentioned equal pay. How concerned are the unions about equal pay within the public sector, given the single status work that is being done in local authorities?
We are very concerned about single status, which is not dealt with by this particular process—there is a separate negotiating arrangement. However, the same problems arise in the pay process that we are talking about. There is an issue about expertise, too.
That brings me to a couple of points that I want to make. Mr Brown, you said that there were six staff in the unit. There is you and Lesley Doherty, your assistant, but what do the other four staff members do? Do they just provide administrative back-up, or are they more involved in some of the pay negotiations?
I am the deputy director of finance with a number of responsibilities, of which public pay is one. I suppose that I spend between one and two days a week on public pay issues. Lesley Doherty is the team leader at the moment. The previous team leader was Nicola Paterson, who had a lot of experience in public pay matters. She has now moved to another job within the Scottish Government. Lesley Doherty is now the team leader, in the meantime at least. She has two senior-level colleagues who deal with pay remits and have responsibility for discussing proposals with the public bodies concerned and making recommendations to the remuneration group that I mentioned. In addition, there are two further staff who do valuable work that you could describe as admin and support.
If I understand you correctly, three people are working on public pay full-time and you are working on it part-time, for want of a better description.
That is fair.
Is that enough?
As I said, we have just lost Nicola Paterson. Our normal strength would be four executive staff in the team.
I repeat my question: is that enough?
I believe that we can make the team work with that number of staff. The proof of the pudding will be in the eating, but I believe—
Sorry, but the proof of the pudding is whether you hit your targets, and you are not hitting them. In fact, you hit the target for only eight of your agreements in 2008-09; 19 agreements are behind schedule; and, in your own words, there is "room for improvement".
Indeed there is, and we accept that. We are working internally and through the public sector pay implementation working group, which Gordon Weir mentioned, to achieve that improvement. We need to work harder on streamlining the processes, in consultation with the public bodies concerned. By doing so, I hope that we will achieve further improvement.
Mr Watson has mentioned one method of streamlining the process. Mr Leonard and Mr Watson are senior union negotiators, so I would like to ask them whether they negotiate directly with Mr Brown. If not, with whom do you negotiate? I think that Mr Watson said that you had to sit there and it was like monkeys and organ-grinders, although I would not necessarily use that analogy. However, it is clear that you are not talking to the decision makers.
That is absolutely right. One of the frustrations is the silence. Because we do not engage at the point where decisions are made, we do not know why delays occur. The process is tortuous. As I said in my opening remarks, that can add to industrial relations problems.
I do not necessarily want to attack the pay unit, but in your opening remarks you talked about dealing with the private sector, where phone calls could be made and decisions taken almost instantly. If you reach a problem during a negotiation, how long does it take on average for you to get an answer?
Up until Christmas eve 2008, it took quite a considerable time. However, last-ditch pay talks averted industrial action over the Christmas period. Those talks were very constructive and led to decisions being taken on the day. I think that phone calls were made on Christmas eve. It is an interesting template, because there was pressure for a decision to be made, and it was possible to make it quickly. I do not know whether the Cabinet Secretary for Finance and Sustainable Growth was sitting on the end of a phone line, or whether some of my colleagues here today were sitting on the end of a phone line, but in the space of a day—albeit Christmas eve—it was possible to make a decision. I wonder whether that can be an example for other parts of the public sector.
I wonder whether Mr Watson would expand on his proposal—if that is what it was—to have some kind of central pay negotiations.
To be fair to Alistair Brown, Lesley Doherty and other colleagues, I should say that the first time that most of us ever meet them is when we are sitting in the room with the minister, when we are at the punch-up stage and the minister is trying to sort something out. They are never involved in that. It is perhaps a bit unfair to talk about the elephant in the room, but that, in essence, is the situation.
Mr Ackroyd, you spoke about base pay and profit-related pay for everybody. However, you mean everybody apart from you, do you not?
No. The principle is exactly the same. I have a base pay and a performance-related element, as do the other directors on the board.
Yes, but the level of your performance-related element is around 38 per cent. What did you say that it was for everyone else?
The arrangements that have been in place since 2006—a variant of them was in place before then, starting in 2002—involve a base-pay element, an annual performance-related element, which goes up to a maximum of 40 per cent, and a further scheme that is based on performance over the full four years of each regulatory period, which goes up to 15 per cent a year, or 60 per cent for the four-year period. All of that is based on targets that we agree with and are assessed by the regulators. Achieving the target does not get someone the performance-related pay element, exceeding it does, and to achieve the higher levels of that element the target must be exceeded by a substantial margin.
And the regulator sets the target.
The board has a remuneration sub-committee that consists of some of the non-executive directors. They make proposals, which they discuss with the regulator. The decision is actually made by the remuneration sub-committee, but it is discussed with the regulator. We want to have a joint view of which aspects are important in driving performance. Indeed, some of the elements of the targets have changed over the years to reflect changing perceptions of the importance of targets. At the end of the year, the regulator verifies whether the performance targets have been achieved.
I am not getting at you in particular, but, given that you are the chief executive of Scottish Water, do you think that you need a bonus in order to drive the company forward in the way that you do? You get a good salary anyway, and your job is to deliver for Scottish Water. Do you need a bonus on top of that salary to make you reach the targets?
Different people are motivated by different things. Some are motivated by cash and some are motivated by issues of a higher order.
I understand the frustration that is felt by negotiators who want to get to the top decision maker, but getting there would not really help with regard to the agreements that are local and specific as opposed to national and general. What would be the advantages and disadvantages in moving towards either genuine local bargaining by each bargaining unit within their funding levels or a Scotland-wide bargaining framework? Might administrative savings be created by moving in either direction?
As I said earlier, we are fairly easy about which way to go, but you have to go one way or the other. We could live with bodies such as Scottish Water and the care commission being given the flexibility to bargain genuinely and freely at a local level, within their overall budgetary parameters. However, that is not the position. The reality is that the cabinet secretary holds a tight rein—in fairness, so did his predecessors. Cabinet secretaries feel—rightly—that they are accountable to Parliament, so they cannot give arm's-length Government organisations such flexibility.
The Scottish Government published its policy on senior salaries in October. Is it being reviewed in the light of the recession?
The senior salaries policy is reviewed and updated annually, generally in the light of the report from the UK Review Body on Senior Salaries. I expect ministers to want to review and update the senior appointees policy this year, but I cannot say exactly when that will happen. That will depend partly on when the SSRB's report is published.
The Scottish Government's policy will be published in October this year for the next financial year.
I would be surprised and disappointed if the policy were published as late as October this year. The document was published as late as October in Scotland in 2008 because the SSRB's report was not—if my memory serves me—issued until July, which was about three months later than normal. The pattern is for the SSRB's report to be published in April.
The helpful annex A to the Government's policy, on page 43, contains a table that shows that all chief executives and chairs of public bodies were to submit their proposals for annual pay increases, including bonuses, by 1 December. Have they all done that?
No, they have not all managed to do that yet. I am not sure whether I can quote the figure absolutely accurately, but a colleague who deals with senior appointees' pay told me that we are more than halfway through the process, so more than half the bodies have submitted proposals in respect of their chief executives.
Could you provide that information in writing?
Yes.
It is now four months since the deadline of 1 December, by when all the bodies should have submitted their proposals.
We can certainly provide more detailed information.
It would be extraordinary if anybody had not submitted their proposal, but that information would be helpful.
My understanding is that Mr Swinney has not yet announced his position on that.
Do you think that I will have to wait another four months before a decision is taken? Are you part of that process, as the pay policy unit?
I am simply unable to say when a decision will be made and announced.
Are you part of the process?
Part of what process, exactly?
Advising, providing guidance, providing information.
We are getting into some deep waters. I am not sure that it is fair to follow this route, so perhaps you have another way of asking the question.
I am asking whether or not the policy unit is involved in consideration of the salaries of either the directors or the chief executive of the Scottish Futures Trust.
That is a factual question. The pay policy unit, as such, would be involved with assessing a draft remit from a body—including the Scottish Futures Trust—were the minister to decide that it was to be included in the policy.
That has not happened so far.
No announcement has been made.
Questions were also asked regarding Scottish Enterprise. It was helpful that, when you wrote back to the committee, you confirmed that there was a review of the chief executive's salary and package. You were not able to describe that to the committee, but the review has subsequently started. That is welcome, I think. What information do you have about the reasons for that review? You indicated that it was happening, but there was no explanation why.
That is the review by Scottish Enterprise of its chief executive's remuneration.
Yes.
I am not familiar with the details of what has been said about that, but we can certainly write to the committee to provide the explanation that has been given.
That would be helpful.
Can you tell us what the Government's role is? I am confused about that. I asked the cabinet secretary about it in relation to the chairman. Both the chief executive and the chair come under the remit of the paper on senior pay policy. A decision had been taken to review the chief executive's pay and conditions. That falls within the scope of the pay policy—the agency has changed substantially, so that is appropriate. However, the Government thinks that it is not appropriate for the new chairman's pay to be reviewed, as the new chairman is on exactly the same remuneration as the previous one. What is the role of the Government in implementation of the pay policy?
That is probably a question for the minister—unless you wish to respond, Mr Brown.
The question as I understand it, although perhaps it is an implied question—
I will help Mr Brown out; I will quote from the letter. I am asking about the policy, not the decision of a minister. The letter to me from the cabinet secretary, dated February 2009, says:
I believe that I am able to help the committee and Mr Purvis on that. The daily fee rate for chairs and non-executive board members of public bodies such as Scottish Enterprise falls into three bands, as I think the policy document explains. There are large, medium and little organisations. Scottish Enterprise, along with three or four other NDPBs, is in the band of the largest organisations, so the daily fee rate for the chairman and his colleagues on the board falls to be set within that band. There is a range, if I remember rightly. The parameters for deciding whether a body is in pay bands 1, 2 or 3 are set out in the public sector pay policy and should be a matter of public record.
Helpfully, the committee was provided with a copy of the technical guidance for the policy. Does the guidance provide a mechanism for revision of existing daily fee rates?
The policy includes a mechanism for annual revision—
Does it also provide for the revision of daily fee rates for new appointments?
Yes.
It seems extraordinary—whether this is due to political pressure, I do not know—that the policy allows for the chief executive's pay and the chairman's daily fee rate to be reviewed after pressure, but that has not been done. How can members of staff or my constituents consider such a process to be fair?
Again, I suggest that matters of policy are really for the minister. However, if Mr Brown wishes to respond, he may do so.
Will we have an opportunity to put those questions to the minister?
You have plenty of opportunities to do so. On questions of policy, there is also the matter of fairness in asking officials to answer them.
I can only refer the committee to the page in the policy to which Mr Purvis has referred, which sets out the framework within which we operate.
I have a final question, which is about Scottish Water. On the pay of the chief executive in particular, does the chairman consider that Scottish Enterprise's pay structure is fair?
I do not know about Scottish Enterprise's pay structure—
I meant Scottish Water's pay structure. I apologise.
He is not multicompetent.
I can give a view on Scottish Enterprise's pay structure if you like.
Do you use a private sector comparator for all staff within Scottish Water?
We do not, as far as I am aware, do that for all staff.
We benchmark where our pay is for all staff, but we do not set pay rates based on benchmarks. The broad picture is that the lower ends of our pay bands are either around or slightly above the average of the comparator groups. The more senior the management level in the organisation, the further below the average of the comparator groups we tend to pay.
Just for clarity, when was the decision taken to award a salary of £263,000?
In 2007.
Did you inherit the previous decisions about the bonuses?
The bonuses have been in existence since 2002 and were reiterated in 2006, but the chief executive's bonus was 40 per cent from something like 2002-03 onwards.
Did Scottish ministers approve the £263,000 salary?
Yes.
When did they do that?
2007.
The salary is 30 per cent higher than that of the predecessor. That is the flexibility that was put in place and which ministers approved.
The salary was designed to recruit someone, not to pay the guy who was there.
You can advertise a post that has a salary attached, or you can advertise a post with "an attractive salary," as is being done for recruitment of the chief executive of the Scottish Futures Trust, so there are options when you are seeking to attract staff. Is that correct?
It could be. It depends what market you are in and what the situation is at the time.
I have a final question, convener. I think Mr Ackroyd said that £900 was the limit in the performance-related pay scheme at the bottom end of the scale. What percentage would that be of the salary of a person at the bottom of the pay scale?
I reckon that it would be between 5 per cent and 10 per cent. Is that right?
As a percentage of our average salary, it is about 4.5 per cent to 5 per cent. For the very lowest bands, it would be approaching 10 per cent.
I have a question for Mr Brown, on how the pay policy is looked at in respect of fairness and equity across the scale. Is there anything within either the pay policy overall or the senior pay policy that would allow equitable consideration of performance-related pay as a percentage of salary? At the bottom end of the pay scale, the maximum performance-related pay could be 4 per cent to 5 per cent and at the top end it is up to 40 per cent.
The pay policy for senior appointees covers bonuses. The policy on bonuses is on page 13 of "Public Sector Pay Policy for Senior Appointments 2008-09", which states:
I have a quick question about something that was said previously. On the possibility of non-departmental public bodies coming together—we are almost on the road to collective bargaining, if you like—I can see why that would be attractive to the trade unions and to the cabinet secretary. Only two NDPBs are represented today, but I wonder how NDPBs would feel about it. Have you been asked how you feel about it?
No, we have not been asked, but I would not like our workforce to negotiate with the cabinet secretary. We manage Scottish Water and are accountable for running the business well and within budgets. We therefore need the management capability to manage within those budgets.
I was previously in the private sector, when I sat at same table as Dave Watson, but with a bench between us. That is how it was. He would reckon that he was dealing with me and that I was able to make a deal, which we would sign and pay the next month. The agreement was that we would do it in March and pay it in April, although I had a remit from the owners of the company or the shareholders. Everybody has a remit, but the negotiation was entrusted to people like me and Dave Watson. We did not have to go back and ask, "Is it okay if we do this?" We did it, signed up to it and paid it. That avoids the signing of deals when inflation is 2 per cent and then finding six months later, when the pay deal has to be paid, that inflation has doubled to 4 per cent, as happened last year. I understand that inflation is now zero, however.
The care commission was not asked, either. What Linda Fabiani suggested would be possible under a couple of conditions, but it would need to be a credible and sustainable arrangement. There would have to be a level playing field to start with so that the system could take account of different developments in different pay markets. The available benchmarking information would have to be the building block of all that.
If some kind of collective bargaining was put in place, would the concern be that there would be benchmarking and comparators across all the NDPBs and that people would look for parity on different job evaluations?
Yes, but it would all depend on how it was done. Many of the care commission's staff came from local authorities, where they had worked in social work departments. When they joined the commission, the colleagues whom they left were on the same pay and, broadly, on the same terms and conditions, but their positions have drifted apart. When we have tried to bring benchmarks like that back to the table, we have struggled to get a good hearing and to get any change put in place. I would hate to get into similar technical issues on a national basis, rather than deal with them on a one-to-one basis. We would need to address some big underlying themes properly first.
Would the unions have to look for such parity if they were to undertake a form of collective bargaining?
In fairness, when Ronnie Mercer and I sat at a table together in one of Scotland's biggest private companies, we operated within constraints, too. We have thousands of members screaming at us if we get it wrong, and Ronnie Mercer had his board setting the parameters. We all operate within constraints. Ultimately, though, I recognised that Ronnie Mercer was the organ grinder. He was senior enough and had enough flexibility, and the board trusted him to cut a deal. Equally, when he negotiated with me, he knew that if I said, "That's a deal, Ronnie," I would go and sell the deal on that basis. He was confident that I could do that.
My question neatly follows on from that. It is interesting to look at the timeline for the Scottish Water pay deal. Mr Mercer, am I right in saying that you would have settled for a pay deal outside the public sector pay policy if it had been left to you?
I am not aware of that. I refer the question to Richard Ackroyd, who attended the meetings—I did not.
No. Broadly speaking, from autumn 2007, there were some internal discussions within Scottish Water between management and the Scottish Water council—a body comprised of trade union representatives and other employees—about the August 2008 pay remit. Nothing was formally agreed, but it is fair to say that there was broad consensus around a particular figure, which we were able to fit within the constraints of the pay remit.
Let me rephrase the question. If you had had the freedom that Mr Mercer had enjoyed previously, would you, with more flexibility, have been able to settle the deal a lot more quickly?
Yes. I will expand on that. Scottish Water has been very successful at becoming more efficient. We have saved substantial amounts in comparison with the costs that were assumed when our prices were last set, in 2006. In substantial part, that is down to the hard work of our entire workforce, who deserve some recognition for that. It would be good for us to have the flexibility to be able to recognise the workforce's contribution to Scottish Water's improved performance and not to be constrained by the annual public pay remit.
You have partially answered this question, Mr Weir. In fact, I have written to the care commission about this, so you will know where I am coming from. It relates to the issue of senior social workers, to which Mr Watson referred. Some of your staff now find themselves way behind where they would have been if they had stayed with the health service or the local authority.
Yes, and that is very easy to demonstrate because such a high percentage—70 per cent—of our staff transferred from local authorities and the health service. I will give you a good example.
I will now ask the witnesses for some final comments. If you had one priority for improvement, what would it be?
That is a bad question to ask.
Inflation.
Can I have three priorities, convener? The process needs to be faster, it needs to be simpler, and it needs to give the management of organisations a bit more flexibility to fit their own circumstances.
Thank you. Anyone else?
Broadly speaking, I endorse those points. To me, the size of the bargaining unit is not necessarily the issue; the issue is the process and how it is dealt with. Whether there is one bargaining unit, which I think that the Public and Commercial Services Union at one stage proposed, or 32 or 48 bargaining units is not necessarily the issue. The main point at issue is how the matter is dealt with. The committee identified blockages, which I hope have been further explored this afternoon.
My priority, which might be a bit limited, is for us in the Scottish Government's pay team to work more closely, and to have more mutual understanding, with the bodies that are subject to the policy. I believe that that would lead to the following of a smoother, faster process. I subscribe to the points that have been made. I would like to see things work faster.
Surely.
I might not have answered clearly Ms Fabiani's question about the time taken to process remits, particularly those of Scottish Water and the care commission. Out of fairness to my colleagues in the pay team, I draw the committee's attention to the timeline that several witnesses have referenced, which, from a quick calculation, shows that it took us about 16 weeks to progress from receipt of the care commission's 2008 to 2010 draft remit to an approval. That is outside the seven-week target, but it is not two years. The comparable figure for Scottish Water, as far as I can calculate it, is 12 weeks. I just wanted to put that on the record.
As I hope that the committee realises from all the examples that have been given, the one key point to understand is that the current system does not work—it is broke, it is bust, and it needs to be fixed.
The public sector pay working group to which I referred is focusing on eight strands and demonstrating improvement on the majority of those across the NDPBs. However, the strand that I regard as most important—benchmarking—is the issue on which there has been least progress to date, probably because it is the most difficult to address. We need substantial movement to improve the quality of the benchmarking regime. That would help the whole process, regardless of which model is ultimately adopted.
We can all agree that the labourers are worthy of their hire, but the complications start thereafter. I thank all our witnesses for the expertise that they have contributed today. I wish them well in their work.
Meeting suspended.
On resuming—