Report by Chief Executive of Scotland Excel.
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There was submitted a report by the Chief Executive of Scotland Excel providing an update on Fair Work practices, including the Living Wage.
The report intimated that Scotland Excel had been addressing Fair Work practices in procurement since the introduction of statutory guidance in October 2015 and, working within the applicable legislative framework, had been committed to encouraging suppliers/contractors to pay the real Living Wage.
The report advised that research showed that paying the real Living Wage helped businesses recruit and retain better staff, reduce absenteeism, encourage higher productivity and 93% of businesses had intimated that Living Wage accreditation had improved their reputation. To date legal advice and policy had allowed encouragement of the Living Wage but prohibited imposition. Those suppliers/contractors who do not pay the Living Wage cannot be penalised in the tender or subsequent contractual process and this had meant that public bodies were unable to make payment of the real Living Wage a mandatory requirement as part of a competitive procurement process.
In December 2020, the Scottish Government wrote to public bodies setting out the clear expectation that public sector partners must lead the way by embedding Fair Work in their organisations and through supply chains, including through procurement, by applying the five Fair Work First criteria in public procurement processes from April 2021.
The report noted that on 15 March 2021, the Scottish Government published a Scottish Procurement Policy Note (SPPN), SPPN 3/2021 setting out action for public bodies to apply Fair Work First criteria in regulated procurement processes that commenced from 1 April 2021; on 24 September 2021, the Scottish Government published SPPN 6/2021 advising that Fair Work First had been expanded from five elements to seven elements and that SPPN 6/2021 superseded SPPN 3/2021, which had been withdrawn; and on 15 October 2021, the Director of Procurement & Property, Scottish Government, advised that the Scottish Government believed it would be possible to mandate the real Living Wage in public contracts where Fair Work First practices, including payment of the real Living Wage, was relevant to how the contract would be delivered; it did not discriminate amongst potential bidders; it was proportionate to do so; and the contract would be delivered by workers based in the UK. Additionally, the Minister for Business, Trade, Tourism and Enterprise announced that the Scottish Government would be implementing this change to all new contracts with immediate effect.
It was noted that the Scottish Government had advised that the content of SPPNs were not legal advice and should not be construed as such. Public bodies were advised to seek their own legal advice. It was hoped that the planned update of the current statutory guidance and SPPNs would provide clarification on the areas detailed in the report.
Scotland Excel had consistently applied Fair Work criteria and strongly promoted and encouraged payment of the real Living Wage and would continue to drive the relevant social, economic and environmental outcomes though procurement activity. Fair Work would continue to be included within the quality evaluation of all frameworks and the weightings attributed to each framework would be proportionate to the likely impact on quality for that particular framework and would therefore be assessed on a case-by-case basis. It was anticipated that this would continue to deliver improved employment conditions, better value frameworks and minimise potential for increased costs to councils.
In light of the most recent communication from the Scottish Government regarding their revised approach to mandating payment of the real Living Wage, Scotland Excel would now, on a contract-by-contract basis, look further into ways in which where appropriate it could, within the law, consider and mandate the real Living Wage.
The Head of Strategic Procurement intimated that a report would be submitted to a future meeting of the Executive Sub-committee in relation to Scotland Excel’s approach to The Fairer Scotland Duty. Further that he would provide further clarity on the report to Councillor Hawick, out with the meeting, specifically in relation to reference made to mandating the real living wage where appropriate to do so.
DECIDED:
(a) That the report be noted;
(b) That it be noted that a report would be submitted to a future meeting of the Executive Sub-committee in relation to Scotland Excel’s approach to The Fairer Scotland Duty; and
(c) That it be noted that the Head of Strategic Procurement would provide further clarity on the report to Councillor Hawick, out with the meeting, specifically in relation to reference made to mandating the real living wage where appropriate to do so.