Public body procurement reports and strategies 2023 to 2024: analysis

6. Fair Work Practices

Fair Work First is the Scottish Government's policy for driving high quality and fair work across the labour market in Scotland. The Fair Work First criteria are:^[25]

• 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;
• Providing fair pay for workers (for example, payment of the real Living Wage);
• Offer flexible and family friendly working practices for all; and
• Oppose the use of fire and rehire practices.

Statutory guidance requires public bodies to consider how to address fair work practices in public contracts.

6.1 Evidence of Fair Work practices within procurement reports

One hundred and fifteen annual procurement reports (92%, n=125) contained evidence that regulated procurement activity in 2023 to 2024 has been delivered in accordance with the principles of Fair Work First. This represents a higher proportion than in 2022 to 2023 (84%) and 2021 to 2022 (81%).

Many public bodies noted that they include Fair Work as a scored criterion where relevant and proportionate in procurement exercises. The Fair Work First requirement most commonly included in annual procurement reports was the requirement for contractors to pay the real Living Wage.

Further examples of activity related to Fair Work included:

• the public body achieving certification as a Living Wage employer;
• delivery of Fair Work First training for employees;
• amendments to terms and conditions to strengthen the application of Fair Work First principles;
• maintaining a zero tolerance approach to slavery and human trafficking;
• policies and systems to prevent human rights violations within supply chains.

Examples from Glasgow City Council’s, the Scottish Ambulance Service’s and Scottish Enterprise’s annual procurement reports on the inclusion of Fair Work First principles in contracts are provided below.

“The council became an accredited Real Living Wage employer during FY 23/24… The council has a significant commercial spend, and a strong influencing position to encourage our supply base to pay the Real Living Wage. Due to this, all relevant regulated and non-regulated contracts have a minimum 5% weighting applied against Fair Work First criteria.”

Glasgow City Council Annual Procurement Report FY23/24 (Glasgow City Council, 2024)

“As part of the formal tendering process, all suppliers are requested to provide details on their organisation's commitment and or compliance to the following. This information is then used to inform the tender evaluation process. 1. Environmental and Sustainability policy and strategy 2. Ethical trading policy 3. Compliance to Modern Slavery Act 2015 4. Provision of the Real Living Wage 5. Whistleblowing Policy 6. Cyber security credentials 7. Fair Work policies in place.”

Scottish Ambulance Service Annual Procurement Report 2023/24 (Scottish Ambulance Service, 2024)

“We have incorporated evaluation of Fair Work First into all tenders where the use of labour is key to the delivery of the contract. SE is a Real Living Wage Employer. Wherever relevant and proportionate, companies bidding to win Scottish Enterprise contracts will have to pay the Real Living Wage in performance of the contract. Where suppliers have staff working on SE premises, we ensure that these employees are being paid the Real Living Wage as a minimum. Also, we monitor the use of zero hours contracts to ensure that these are not used by our suppliers in an inappropriate manner in the delivery of any services to Scottish Enterprise. We include questions on the Real Living Wage and the use of zero hours contracts within our tenders for the purposes of monitoring and reporting.”

Scottish Enterprise Annual Procurement Report 2023/24 (Scottish Enterprise, 2024)

6.2 Regulated contracts awarded which include a scored Fair Work criterion

One hundred and eleven annual procurement reports (89%, n=124) included information about the number of regulated contracts awarded that contained a scored Fair Work criterion. This represented a combined reported total of 3,116 regulated contracts awarded with a scored Fair Work criterion, which is higher than the 2,889 reported as awarded in the previous year.

6.3 Suppliers committed to paying the real Living Wage

Living Wage Scotland defines the real Living Wage as “an independently calculated rate based on the cost of living and is paid voluntarily by employers… [It is] the wage that employees need to earn in order to afford the basket of goods required for a decent standard of living. This basket of goods includes housing, childcare, transport and heating costs” (Living Wage Scotland, n.d.).^[26]

Over three quarters of annual procurement reports (95, 76%, n=124) reported the number of unique suppliers who have committed to paying the real Living Wage in the delivery of a regulated contract awarded during the 2023 to 2024 reporting period (compared to 70% who provided this information in 2022 to 2023). A reported total of 3,391 suppliers committed to paying the real Living Wage in the delivery of a regulated contract awarded in 2023 to 2024. Ten of the public bodies who provided this information in their data template (11%, n=124) reported that none of their unique suppliers have committed to paying the real Living Wage in the delivery of a regulated contract awarded during the reporting period.

6.4 Living Wage employers

A total of 94 annual procurement reports (75%, n=124) provided data on the number of their unique suppliers who were accredited Living Wage employers for 2023 to 2024. This represented a reported total of 1,719 unique suppliers.

In December 2023, it was announced that the Scottish Business Pledge was to be fully retired in the 2024 to 2025 budget and was therefore no longer accepting new members (National Records of Scotland, 2025). Based on data provided by 17 public bodies (14%, n=124), nine unique suppliers awarded a place on a regulated contract were signed up to the Scottish Business Pledge. Seven of these suppliers were in the RSL sector, one in local government and one in universities and colleges.

6.5 Diversity and inclusion

Evidence of diversity and inclusion in 2023 to 2024 regulated procurement activity was provided in 49 annual procurement reports (39%, n=125). Twenty central government sector public bodies described their approach to addressing diversity and inclusion in their reports, accounting for the highest proportion of reports providing this information (69%, n=29).

A range of approaches to diversity and inclusion were detailed in public bodies’ annual procurement reports for 2023 to 2024. Examples include:

• embedding diversity and inclusion in procurement processes by, for instance, including equality and diversity questions in tender documentation;
• assessing the equality impact of procurement activity;
• using procurement to promote opportunities among specific groups, such as community benefit requirements that set targets for recruiting disabled people;
• promoting Fair Work principles through procurement activity such as the real Living Wage, gender pay gap and creating a more diverse and inclusive workplace;
• ensuring that procurement is undertaken in an open and inclusive way aligned with national and internal guidance;
• training or learning opportunities for procurement staff in diversity and inclusion.
• using PCS to advertise opportunities;
• achieving Disability Confident employer status.

Some examples from annual procurement reports on public bodies’ actions to integrate diversity and inclusion in their procurement practices are below:

“During the reporting period, our procurement officers increased their understanding of equality and diversity issues through the setting of individual performance appraisal objectives, self-learning and attending presentations delivered by our organisation’s Equality and Diversity officers.”

Social Security Scotland Annual Procurement Report 2023-2024 (Social Security Scotland, 2024)

“The Procurement Officer continued to work with the Inclusion & Diversity Manager to discuss further opportunities for improving inclusion and diversity in our procurement processes, including updating the wording in our non-scored Diversity Monitoring questions which are included in our tender documents. Basic Impact Assessments are completed for all regulated goods and services procurements and individual works contracts over £100k. Where possible a joint EHRIA is completed for works contracts between £50k and £100k and for any non-regulated procurements which are likely to have more of an impact on equalities and the Strategy was recently updated to reflect a more inclusive approach. The Procurement Officers will continue to work with the Inclusion & Diversity Manager during 2024/25 to ensure SCRA’s procurement policies and processes continue to support inclusive procurement.”

Scottish Children’s Reporter Administration (SCRA) Annual Procurement Report 2023-24 (SCRA, 2024)

“Our Procurement Strategy and its delivery are aligned to our core organisational values of Stewardship, Inclusive, Excellence and Respect that are central to our working culture and drive all that we do.”

Scottish Parliamentary Corporate Body Annual Procurement Report 2023-2024 (SPCG, 2024)

“In April 2018, the Fairer Scotland Duty, which is Part 1 of the Equality Act 2010, was implemented in Scotland. This legislation places an obligation on public authorities to consider how they can address inequalities arising from socio-economic disadvantages in their strategic decision-making processes. As part of our compliance with this duty, we have actively prioritised equality throughout our tender processes in accordance with the Equality Act 2010 and the Equality Act 2010 (Specific Duties) (Scotland) Regulations 2012. In the reporting year NSS demonstrated our commitment to the duty by diligently conducting an Equality Impact Assessment (EQIA) for all regulated procurement activities. This comprehensive approach has significantly contributed to the integration of equality considerations within our contracts.”

NHS National Services Scotland Annual Procurement Report 2023-2024 (NSS, 2024)