Encouraging Fair Work

New conditions on public sector grants.

Applicants for public sector grants must support better pay and conditions for workers in order to qualify, under new strengthened criteria which has come into force.

From today, organisations will need to demonstrate they pay at least the real Living Wage and provide channels for workers to have an effective voice, as a condition of the application.

The requirement forms part of the Bute House Agreement, a plan to work together with the Scottish Green Party to build a fairer and more equal economy. This applies to organisations receiving public sector grants, and limited exceptions may be applied to ensure the measure remains proportionate.

Wellbeing Economy and Fair Work Secretary Neil Gray said:

“Public sector funding should be used for the wider benefits needed in a wellbeing economy, such as the promotion of fair work – including the creation of more high quality, well paid jobs. This in turn will support stronger businesses, and vibrant, healthy communities.

“By extending the reach of our Fair Work First criteria – which has already been applied to some £4 billion of public funds since 2019 – we can better tackle the cost crisis, poverty and social inequalities.”

Green Skills, Circular Economy and Biodiversity Minister Lorna Slater said:

“While this is essential to improving worker experience, research has also shown businesses with stronger employee voice and representation perform better and are more productive.    

“We will work with employers, workers and trade unions connected to organisations applying for a public sector grant to ensure we are continuing to improve terms and conditions, worker wellbeing and to develop progressive and fairer workplaces.”


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