Supporting Fair Work Practices

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Real Living Wage for Public Sector Contracts

Companies bidding to win Scottish Government contracts will have to pay at least the real Living Wage.

This will ensure public sector contracts tackle in-work poverty and promote fair work practices across the public, private and third sector where there is a risk of low pay.

The policy is effective immediately and builds on commitments made in the agreement between the Scottish Government and Scottish Green Party.

The real Living Wage has been consistently higher than the UK National Living Wage and helps create an inclusive and fair economy for all. Rates are announced annually in early November by the Living Wage Foundation, who currently put it at £9.50 an hour.

Graeme:

This is a very welcome move, and one in line with the Scottish Government’s support for and promotion of the Living Wage to date.

All staff on its own pay scheme have been paid at least this rate since 2011, including NHS staff, and £64.5 million was committed this year to ensure its extension to adult social care workers.

The SNP in government has been doing all it can with the powers available to advance fair working practices – including through its continued funding for Living Wage Scotland.

We are leading the UK, with around a quarter of accredited UK real Living Wage employers based in Scotland – and the highest proportion of employees paid the Living Wage of the UK countries.

Business Minister Ivan McKee:

We want to use every opportunity possible to promote fair work and ensure people are paid at least the real Living Wage. By using procurement powers to ensure bidders pay the real Living Wage, the Scottish Government is leading by example to help influence employment practices and embed fair work principles.

We will continue to engage with relevant sectors to encourage others to adopt this change across the public, private and third sector. We are firmly focused on creating the right economic conditions and fair work practices to drive a greener, fairer and more sustainable economy.

Fair Work Minister Richard Lochhead:

As outlined in our Programme for Government, a range of measures are being taken forward to embed Fair Work First across the economy. The Scottish Government recognises pay as a clear way that an employer can demonstrate a commitment to their workforce, helping tackle in-work poverty alongside wider Fair Work First criteria.

We will also introduce further changes to strengthen criteria for Scottish Government grants from next summer, subject to limits on devolved competence, as part of the Cooperation Agreement with the Scottish Green Party.

The number of accredited living wage employers has increased from 14 in 2014 to just over 2,300 in 2021 and we would encourage more businesses to sign up to help ensure more people see their pay uplifted to at least the real Living Wage. We encourage organisations, regardless of size, sector or location, to adopt our progressive fair work approach which will help ensure all staff receive a fair day’s pay for the work they do.

Background:

The real Living Wage must be paid to workers on public contracts where it is a proportionate and relevant requirement and it does not discriminate amongst potential bidders.

Individual public authorities determine when it is appropriate to include fair work conditions in tenders, in tandem with other important sustainable outcomes like reaching net zero emissions and creating a positive impact on the local economy.

Further guidance on public sector procurement and fair work is available online by clicking here.

The Scottish public sector spends around £13 billion every year to deliver public services or capital building projects that can provide vital work for businesses across the country.