Real Living Wage becomes conditionality for winning public sector contracts in Scotland

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Companies bidding to win Scottish Government contracts will have to pay the real Living Wage, the government has announced.

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

According to the Scottish Government, this condition is set to 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.

Business Minister Ivan McKee commented on the announcement: “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.”

According to the Scottish Government, the country’s 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.’

To be considered for most Scottish Government contracts in the future, companies must agree to pay at least the real Living Wage of £9.50 an hour, rates are announced annually by the Living Wage Foundation in early November.

According to the Scottish Government, 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.

More information about this announcement is available on the Scottish Government website.