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Public sector grants and funding

Our Fair Work First policy aims to address particular challenges in Scotland’s labour market by encouraging more businesses and organisations to adopt fair work practices. It does this by applying Fair Work First criteria to public sector contracts, grants and other funding where relevant, specifically:

  • payment of at least the real Living Wage
  • provision of appropriate channels for effective workers’ 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
  • offering flexible and family-friendly working practices for all workers from day one of employment
  • opposing the use of fire and re-hire practices

For public sector grants awarded on or after 1 July 2023, payment of at least the real Living Wage and providing effective workers’ voice will be mandatory, while the other criteria will continue at this stage to be encouraged. This conditionality does not apply retrospectively to public sector grants awarded before 1 July 2023.

This conditionality will apply to recipients of eligible agriculture grants awarded on or after 1 April 2024 (Scottish Government Agriculture and Rural Economy Directorate will advise the sector which grants are within scope in advance).

The Scottish Government expects public sector grants awarded before 1 July 2023 which involve multi-year funding to incorporate this conditionality  as part of the grant agreement for any subsequent funding years for the project concerned.

Fair Work First guidance

We have published Fair Work First guidance for public sector bodies involved in awarding contracts and grants, as well as those looking to access funding.


Public procurements

Those involved in running public procurement exercises should also read:

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