Scottish public sector bodies spent £1.35 billion on goods and services in 2020. Like the UK government, the Scottish Government is increasingly focussed on public sector spend securing wider economic and social benefits, rather than just the immediate purchase of the goods or services. The publication of SPPN3/2021 on 15 March 2021 is the latest step along the fair work path that has been developing since October 2015. Public bodies are to apply Fair Work First criteria to regulated procurement processes commencing from 1 April 2021.
Fair Work First: how we got here and its aim
The Scottish Government issued statutory guidance on fair work practices and the award of public contracts in October 2015 and those bidding for public sector contracts will be very familiar with questions in tender documents covering issues such as the Living Wage and the avoidance of zero hours contracts.
More recently the guidance note published in January 2021 was aimed at those awarding public sector grants, other funding and public contracts and also those receiving funding through public sector grants and sponsorship arrangements with the Scottish Government and/ or are involved in the delivery of contracts, recognising that those who receive public funding and/or supply the public sector have a role in providing a decent standard of living and income for their employees, offer security of contract, including hours and earnings and other entitlements including sick pay and pension as well as promoting innovation and productivity. Fair work is about supporting people and businesses and enabling an inclusive people-centred culture of work.
As Scotland and the rest of the world transition out of Covid-19 lockdown restrictions towards economic recovery, fair work practices are seen as a tool to tackle social and economic inequalities within society due to economic strains.
The Fair Work First criteria
SPPN 3/2021 sets out the five Fair Work First criteria:
appropriate channels for effective voice, such as trade union recognition;
investment in workforce development;
no inappropriate use of zero hours contracts;
action to tackle the gender pay gap and create a more diverse and inclusive workplace; and
providing fair pay for workers (for example, payment of the real Living Wage).
Public bodies are to incorporate the Fair Work First criteria in any regulated procurement process, provided that it is relevant and proportionate to do so, for example, in contracts where there is strong workforce engagement which impacts the performance of the contract and how it is delivered.
Fair Work First in practice
In terms of monitoring Fair Work First post procurement, contractors may be required to provide evidence that they are on their way to adopting the Fair Work First criteria and the SPPN suggests that suppliers that have committed to working towards the Fair Work First criteria should produce a statement for their own website showing their commitment to the workers engaged in the contract.
Public bodies will be asked to report through their Annual Procurement Reports how many contracts in each annual period included Fair Work First criteria.
The SPPN further underlines the ongoing trend in procurement being used as tool to secure wider economic and social benefits. The requirement for Fair Work First criteria to be applied from 1 April 2021 coincides with advisors to the Scottish Government warning that Scotland will miss their 2025 target of becoming a fairer economy and reduced inequality unless an urgent step is taken. It will therefore be intriguing to see whether fair work policy will be enough to make a change, or whether further policy or stricter implementation is required to meet such targets.
Fair Work First has already been acknowledged for upcoming projects such as Scotland’s green port model, for which a bidding process is expected to launch this month. A Scottish Government spokesman confirmed that “operators and beneficiaries required to commit to adopting Fair Work First criteria, including payment of the real living wage, and to implement robust plan to contribute to Scotland’s just transition to net zero.”
Going forward, it will be both interesting and exciting to see the impact, if any, Fair Work First will have in tackling social and economic inequalities in Scotland.
Scotland’s 2025 Fair Work Framework can be found here.