As part of the Scottish Government’s commitment to become a Fair Work Nation by 2025, from the 1st of July 2023 those applying for public sector grants have been required to pay at least the real Living Wage and provide effective workers’ voice as a minimum standard.
The real Living Wage criteria applies to all UK-based staff aged 16 and over, including apprentices, who are directly employed by the grant recipient. Any UK-based workers who are not directly employed but are directly engaged in delivering the grant-funded activity, such as sub-contractors or agency staff, must also be paid at least the real Living Wage. This differs from Living Wage Scotland’s criteria for Living Wage accredited employers which apply to those over 18 and takes a different approach to contracted staff.
All those with a workforce must also demonstrate that all workers, including agency workers, have access to effective voice channels at both collective and individual levels.
SCVO agrees that Fair Work for Scotland’s voluntary sector workforce should be a priority. Scotland’s voluntary sector is a major employer - employing over 135,000 people, around 5% of Scotland’s workforce. Our workforce makes a huge contribution across Scotland, offering a lifeline to people, families, and communities as the cost-of-living crisis bites. This lifeline shouldn’t need to be extended to voluntary sector staff.
Encouragingly, recent statistics show a significant reduction in those paid below the real Living Wage in Scotland’s voluntary sector, falling from 13.7% in 2021 to 6.3% in 2022, a welcome development. However, while the sector continues to struggle with rising costs- with 44% of voluntary organisations reporting cost increases - how the sector will fund the real Living Wage, meet the new Living Wage rate (which due to inflation increased by 10% in November), and the impacts on pay differentials, is unclear. Concerns have also been raised in the Third Sector Tracker that many organisations may be relying on reserves to uplift wages, an unsustainable practice.
SCVO believes in the principles of Fair Work, but it must be recognised that the sector faces barriers to implementation and that poor funding and procurement practices undermine aspirations to offer secure work. A Fair Funding approach which addresses short-term funding cycles and ingrained operational issues, including delayed decision-making, and poor communication, is central to realising Fair Work and offering security to organisations across the voluntary sector, their staff, volunteers, and the communities they work with. Despite repeated commitments Scottish Government progress on these barriers through a ‘Fairer Funding’ approach remains slow. The most recent Scottish Budget, for example, offered little action and no commitments to Living Wage or other uplifts within voluntary sector funding.
Over the last year SCVO have repeatedly called on the Scottish Government to support our sector with uplifts to ensure voluntary organisations receiving public sector grants and contracts can pay the real Living Wage, meet the new Living Wage rate, and uplift staff wages more broadly.
SCVO have explained that years of under-funding, followed by Covid 19, and the running costs crisis, mean that for many voluntary sector employers, paying the real Living Wage and addressing the knock-on impact this increase could have on other salaries, cannot be achieved without additional resources.
Last year in both Emergency Budget Responses, the Scottish Government recognised the impact of the cost-of-living crisis on public sector staff and took action to provide wage uplifts, particularly for the lowest paid. The Scottish voluntary sector provides similar essential services and support, despite this, action has not been taken to ensure voluntary sector staff can receive pay increases equal to their public sector counterparts. Shockingly, recent research by CCPS reveals a 20% pay gap between NHS support workers and voluntary sector social care support workers who are starting out in their career. The Scottish Government and their coalition partners, the Scottish Greens, should lead by example by ensuring grants and contracts accommodate at least the real Living Wage and offer pay uplifts for voluntary sector staff on par with those offered to the public sector.
Offering Fair Work matters to voluntary organisations and organisations in the sector excel on many Fair Work aspects, as shown in the recent research from GCVS and colleagues at Strathclyde University. It’s time for funders, including the Scottish Government, to support the sector to ensure our skilled and experienced staff are paid fairly.
In the meantime, organisations should familiarise themselves with Fair Work First and contact the Scottish Government’s Fair Work Policy and Delivery team with any concerns. Organisations can also meet the Scottish Government's Fair Work Policy and Delivery team at SCVO’s upcoming webinar, Fair Work First - meet the team and Q&A. A recording of this session will be available on our YouTube Channel.
Sheghley Ogilvie is policy and public affairs officer at the Scottish Council for Voluntary Organisations (SCVO)
