Fair Work First: policy evaluation

Executive Summary

Policy background

The Scottish Government fair and inclusive workplaces policy defines fair work as “secure employment with fair pay and conditions, where workers are heard and represented, treated with respect and have opportunities to progress”. Fair Work First is the Scottish Government's flagship policy for driving high quality and fair work, and workforce diversity across the labour market in Scotland. It does this by applying specific Fair Work First criteria to grants, other funding and public contracts being awarded by and across the public sector, where relevant and proportionate to do so.

The seven Fair Work First criteria are:

1. Payment of at least the real Living Wage.

2. Provision of appropriate channels for effective workers' voice, such as trade union recognition

3. Investment in workforce development.

4. No inappropriate use of zero hours contracts.

5. Addressing workplace inequalities, including pay and employment gaps for disabled people, racialised minorities, women and workers aged over 50.

6. Offering flexible and family friendly working practices for all workers from day one of employment.

7. Opposing the use of fire and rehire practice.

In 2018, Fair Work First was introduced as a policy concept, then in 2019 the first five criteria were encouraged as part of grant arrangements.

From 14 October 2021, payment of at least the real Living Wage became mandatory as part of Scottish Government contracts and encouraged as part of wider Scottish public sector contracts.

From 1 July 2023, changes were introduced to grant arrangements – referred to as ‘conditionality’ – whereby payment of at least the real Living Wage and provision of appropriate channels for effective workers’ voice, such as trade union recognition, became conditions of accessing certain types of public sector grants in Scotland.

Evaluation objectives

The objectives of this independent evaluation of Fair Work First are to help the Scottish Government to understand:

1. Whether Fair Work First has been delivered as intended.

2. The impact of Fair Work First on organisations in receipt of contracts – and organisations in receipt of grants – with Fair Work First criteria applied.

3. The impact of Fair Work First on workers within organisations in receipt of contracts – and organisations in receipt of grants – with Fair Work First criteria applied.

4. Any differences in implementation or impact between the voluntary and mandatory periods.

Approach

The evaluation began with a rapid evidence review, four scoping interviews with Scottish Government policy representatives, and 12 in-depth interviews with key stakeholder organisations. Three discrete online surveys were then conducted with the following audiences, set out below. All three online surveys opened on 27 October 2025 and closed on 23 January 2026:

• Public sector organisations in Scotland that either procure the services of third-party suppliers and/or award discretionary grants to employers – 88 responses received.
• Employers that have been awarded a contract and/or a grant by a public sector organisation in Scotland – 260 responses received.
• Workers in organisations that have been awarded a contract and/or a grant by a public sector organisation in Scotland – 888 responses received.

A total of 22 in depth follow-up interviews were then undertaken involving purposive sampling of survey respondents who gave consent to a follow-up interview. These interviews spanned five buyers and funders, 10 employers, and seven workers.

In terms of key limitations, the three surveys did not seek to be representative due to insufficient data available to define the discrete populations in scope. As such, the findings cannot be generalisable to their respective populations.

Further, the scope of the evaluation in relation to employers (and by extension workers) was intentionally focused only on those in receipt of public sector contracts or grants. This was due to several reasons (explored more fully in section 1.6.2) including the complexity of the policy landscape and potential broader influence of the policy, making it difficult to form a comparison group not aware of or not having engaged with Fair Work First at all. Instead, a theory-based approach was taken in line with HM Treasury Magenta Book principles.

Key findings

Fair Work First statistics

Existing statistical evidence points to Fair Work First having become increasingly embedded as part of procurement and grant arrangements. The proportion of regulated contracts awarded by public bodies that contain a Fair Work First criterion has increased year on year from 25% (1,008) of Annual Procurement Reports analysed in 2019-20, to 89% (3,116) of annual reports analysed in 2023-24.

In grant-making, Scottish Government data for Fair Work First: grants awarded – 2024 to 2025 reveal a total of 5,234 grants worth £3.42billion issued with Fair Work First conditions attached in 2024-25. This represents an increase from 3,914 grants worth £2.67billion in the previous year, as per Fair Work First: grants awarded – July 2023 to March 2024.

Process effectiveness

Changes to Fair Work First policy in October 2021 and July 2023 (summarised above) appear to have stimulated surveyed buyers and funders to more frequently apply the criteria of paying at least the real Living Wage, and providing appropriate channels for effective workers’ voice, such as trade union recognition.

Within procurement:

• More than half of surveyed buyers (38, 52%) say they always ask employers to self-declare or provide evidence of paying at least the real Living Wage at the time of the survey (November 2025-January 2026). This compares with 18 (24%) when reflecting on their approach prior to October 2021.

  • Note this cohort includes both Scottish Government and non-Scottish Government buyers, the latter for whom applying the real Living Wage is not mandatory (though local mandates may exist within individual public bodies). These groups have not been separated in order to preserve anonymity.
• Almost two thirds of surveyed buyers (35, 64%) say the policy change in October 2021 has made them more likely to apply the real Living Wage criterion.

As part of grant arrangements:

• More than half of surveyed grant funders (21, 53%) say they always ask employers to self-declare or provide evidence of paying at least the real Living Wage at the time of the survey, and 14 (35%) always ask employers to provide evidence of effective workers’ voice, such as trade union recognition. This compares with 5 (12%) and 4 (10%) – respectively – when reflecting on their approach prior to July 2023 when conditionality was introduced.

  • Note that the Scottish Government’s Fair Work First Guidance sets out certain thresholds for when evidence is sought in support of these criteria, though grant funders may set their own higher thresholds.

Implementation challenges:

The most frequently reported challenge associated with Fair Work First among surveyed buyers and funders is how to verify employers’ commitments and evidence. There is limited evidence to suggest that Fair Work First has directly led to a reduction in the number of bid submissions received, with only 5 (7%) of surveyed buyers and funders reporting instances of employers not being able to meet the criteria.

Among surveyed employers, the main challenges include cost pressures resulting from having to pay higher wages, uncertainty over future increases to the real Living Wage, and difficulties being able to plan and invest in fair work practices due to short funding cycles (a point raised from third sector employers particularly).

Existing evidence combined with views from interviewed stakeholders indicate that Fair Work First criteria can be more difficult to meet in some sectors such as care and hospitality, which are typically characterised by low pay, unsociable hours, variable shift patterns and high-pressure points. Stakeholders also make the point that smaller employers can face comparatively greater resource constraints than larger employers, with reduced infrastructure to embed elements such as clear pay structures and effective voice mechanisms.

Information and guidance:

Almost all surveyed buyers and funders consider the information and guidance they have accessed about Fair Work First to be helpful for implementing the criteria and associated processes. However, a minority describe guidance as dense, fragmented, complex and containing gaps. Similarly, while most employers have found information easy to use, some find it repetitive or difficult to consolidate into a clear picture of expectations, especially what constitutes “strong evidence”.

Employer outcomes

Fair Work First understanding:

Surveyed employers’ understanding of Fair Work First appears to be generally strong and has improved over time. Most (86%) consider their understanding to be excellent or good, and 72% say this has increased since October 2021 when policy changes were introduced. Among surveyed employers in receipt of grants, the same proportion (72%) say their understanding has increased since July 2023 when conditionality was implemented.

Commitments to Fair Work First criteria and the difference Fair Work First has made:

There is an increase in the proportion of surveyed employers self-reporting that they have “fully embedded” all seven Fair Work First criteria when reflecting back to practices prior to October 2021 and comparing that with practices at the time of the survey. This is most prominent with respect to the following:

• Paying all workers at least the real Living Wage: increase from 71% to 91% of employers saying “fully embedded”; furthermore, 43% agree that Fair Work First has increased their level of commitment.
• Offering flexible and family friendly working practices from day one of employment: increase from 71% to 90% saying “fully embedded”; furthermore, 40% agree that Fair Work First has increased their level of commitment.
• Providing appropriate channels for effective workers’ voice, such as trade union recognition: increase from 59% to 77% saying fully embedded; furthermore, 42% agree that Fair Work First has increased their level of commitment.

Among surveyed employers agreeing that Fair Work First has increased their commitment to fair work practices, most reported through the survey and follow-up interviews that it has strengthened, reinforced, formalised or sharpened their existing practices. They describe the criteria as a helpful structure that keeps fair work visible in strategic discussions and prompts regular internal reviews of policies, Two thirds (67%) of surveyed employers say that Fair Work First is one of multiple drivers influencing fair work practices, thus a clear contributory factor but very rarely (for less than 5%) the only one.

Surveyed workers observing improvements in their employer’s commitment to paying at least the real Living Wage point to more deliberate organisational action over time, including movement from the minimum wage to the real Living Wage, introduction of cost-of-living increases, and pay rises following job evaluation exercises. With respect to effective workers’ voice, such as trade union recognition, workers report having observed stronger formal mechanisms and increased leadership openness.

Worker outcomes

Most surveyed workers self-report a range of fair work outcomes where they work. In particular, 96% say they are paid at least the real Living Wage, although slightly lower at 91% among 16–24-year-olds and 90% among those in the third sector. Some workers expressed concern that pay increases at the lower end of wage scale have the effect of reducing differentials compared with roles that have greater responsibility or skill.

More than three quarters of surveyed workers (78%) agree that their employer provides appropriate individual voice channels and 63% agree that their employer provides appropriate collective voice channels. The former are reported as being more common with organisations that do not recognise a trade union, whilst the latter are more common in organisations that do recognise a trade union. Workers in smaller organisations note that effective voice tends to occur more informally through regular direct access to senior staff.

There is limited evidence of the impact of Fair Work First on workers’ intersecting protected characteristics. Workers interviewed following the survey are generally of the view that their employer creates a working environment that treats all workers fairly and equally. Interviewed stakeholders suggest that employers may have limited understanding of intersectionality in terms of being able to confidently identify and address inequalities. For their part, employers interviewed following the survey were generally unable to identify particular groups of staff who had benefited from changes in the working environment as a result of Fair Work First.

However, the survey of workers does suggest differences in experiences by protected characteristics. Workers with a long-term physical or mental health condition appear to experience disproportionate barriers to fair work, with fewer in this cohort (compared with those without a long-term physical or mental health condition) identifying that their employer has made certain fair work commitments, as well as these commitments having improved since October 2021. The differences are statistically significant.

Wider impact and unintended consequences

Surveyed employers were asked what Fair Work First has helped their organisation to do. The top three wider impacts include building a positive work culture (42%), focusing on staff wellbeing (38%) and improving workforce retention (35%).

As evidence of spillover benefits from Fair Work First, 78% of surveyed employers have included evidence of their fair work commitments to support when bidding for a contract and/or funding from a non-public sector organisation.

From the worker perspective, 60% of those surveyed mentioned experiencing a positive culture where they work, 58% have felt improved staff-wellbeing and 53% mentioned good workforce retention.

For most surveyed employers, Fair Work First has not triggered any unintended consequences that they could identify. However, a small proportion (6%) report being put off employing apprentices and young workers in general due to the application of the real Living Wage criterion.

In relation to the real Living Wage, some interviewed stakeholders and employers describe significant financial pressures created when wage requirements rise faster than contract or grant increases, reducing capacity for expansion and growth.

Summary of conclusions

On the whole, Fair Work First appears to have been delivered successfully, with processes increasingly well embedded among buyers and funders, due judgment being exercised in applying the criteria, strong use of relevant information and guidance to guide practices, and clear expectations being set for employers. However, the evaluation found that Fair Work First guidance could be improved to provide clearer explanations of minimum requirements and definitions of what constitutes acceptable evidence, to support consistent interpretation and application.

The evidence suggests that Fair Work First has had a positive impact in strengthening employers’ fair work commitments. This appears to have been driven in part by changes to procurement policy in October 2021 and the introduction of conditionality in grants in July 2023. However, Fair Work First is one of several influencing factors that are difficult to disentangle due to the lack of baseline data.

Surveyed workers employed by organisations in receipt of public sector contacts or grants report good fair work practices, although – in a similar vein to employers – it is difficult to determine the extent to which Fair Work First has contributed to this.

Ultimately, whilst it is difficult to attribute Fair Work First as a sole driver in influencing workplace practices in funded organisations, evidence suggests that the policy has helped to ensure that public funds are reaching organisations which are modelling fair work practice.