Fair Work First: policy evaluation

1. Introduction

1.1 Fair Work policy context

1.1.1 Fair Work Framework, vision and action plan

In 2016, the Fair Work Convention – the independent body that advises Scottish Ministers on Fair Work – published the Fair Work Framework. The Framework defined Fair Work as work that offers effective voice, opportunity, security, fulfilment and respect; that balances the rights and responsibilities of employers and workers; and that can generate benefits for individuals, organisations and society.

At the time of commissioning this evaluation, the Fair Work Convention’s vision for Fair Work was for Scotland to be a leading Fair Work Nation by 2025 “where fair work drives success, wellbeing and prosperity for individuals, businesses, organisations and society”.

The Scottish Government shared in the Fair Work Convention’s vision, with its fair and inclusive workplaces policy defining fair work as “secure employment with fair pay and conditions, where workers are heard and represented, treated with respect and have opportunities to progress”.

The Scottish Government’s Fair Work Action Plan subsequently brought together Fair Work, Gender Pay Gap, and Disabled People's Employment action plans, along with its Anti-Racist Employment Strategy – A Fairer Scotland for All. Together, the Action Plan and Strategy seek to address structural barriers and systems that create unequal conditions and opportunities for one group of people over another, and eradicate systemic racism, disablism, sexism, and ageism which are still a real experience for many people.

1.1.2 Scotland’s performance as a fair work nation

In its November 2025 report, Measuring Scotland’s performance as a Leading Fair Work Nation, (which measures Scotland’s performance against comparator countries), the Fair Work Convention observed that whilst unlikely that Scotland would meet its aspiration to be leading on every indicator by 2025, Scotland had made measurable progress on improving fair work, particularly when considered over the ten-year life of its fair work agenda. It showed that, since 2016, Scotland had improved in 11 of 14 indicators, with particularly positive performance in key areas such as reducing gender economic inactivity gaps, reducing workplace injuries and tackling low pay.

Identified ongoing challenges include unemployment for young people (where Scotland’s performance is dropping), the disability employment gap where more progress is needed to meet the Scottish Government’s target, and on collective bargaining where Scotland lags significantly behind the leading nations.

1.1.3 Wider economic context

Over the past six years, and in common with the rest of the UK and other developed economies, Scotland has experienced major inflationary pressures. These were driven first by the COVID-19 pandemic and then by the energy shock resulting from the war in Ukraine.

The Scottish Government’s economy briefs, bulletins and insights illustrate that businesses reported significant input cost pressures, particularly from energy and labour costs, while inflation rose sharply in 2022-2023 driven by energy and supply‑chain disruptions linked to global events. As observed in the Scottish economic bulletin: February 2026, labour costs have continued to be a key cost pressure for Scottish businesses, contributing to reduced staffing levels and margin pressures.

Business labour cost pressures have also been influenced by factors including rises in both the National Minimum Wage (NMW) and the real Living Wage, latterly which have risen by 45.8% and 41.6% respectively between 2020 and 2026, coupled with the increase in employer National Insurance Contributions (NICs) in April 2025.

These factors demonstrate the challenging economic environment into which the Fair Work First policy has been introduced, which may be a contributing factor to particular challenges identified by employers in the course of this evaluation.

1.2 Fair Work First policy

1.2.1 About Fair Work First

Stemming from the wider Fair Work policy context (introduced in section 1.1.1), Fair Work First has become 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 public contracts, grants and other funding awarded by and across the public sector, where relevant and proportionate to do so. Through Fair Work First, the Scottish Government aims to influence employer behaviour and support employers who adopt fair work practices.

The seven Fair Work First criteria seek to address challenges in Scotland's labour market and make a real difference to people and their communities, organisations and the economy. The criteria are:

1. Payment of at least the real Living Wage (see Note 1).

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.

Note 1: The real Living Wage rate is updated annually in October and adjusted for inflation. It applies immediately but accredited Living Wage employers have until 1 May of the following year to implement the new rate. The real Living Wage amount as announced in October 2025 (when the surveys launched for this evaluation) was £13.45 across the UK and £14.80 in London.

The Annual Survey of Hours and Earnings 2025 reports that, in 2025, the proportion of employees aged 18+ in Scotland earning less than the Real Living Wage (£12.60) was 11.3%. This was a slight decrease from 11.5% in 2024. In 2025, the proportion of women (employees aged 18+) in Scotland earning less than the real living wage was estimated at 12.0%, compared with 10.5% for men.

1.2.2 How Fair Work First has evolved

In 2018, Fair Work First was introduced as a policy concept (having previously been referenced as a potential lever in the Fair Work Convention’s Framework), then in 2019 the first five criteria were encouraged as part of grant arrangements.

Fair Work First has evolved over time, therefore it is important to note the wider policy context which led to its development. In 2015, within procurement, statutory guidance on fair work was introduced, including payment of the real Living Wage under the Procurement Reform (Scotland) Act 2014. The use of conditionality in public spending and procurement was identified as an important lever to fair work within the Fair Work Framework (2016). Following this, in 2018, the Scottish Government introduced Fair Work First as a policy concept, with formal implementation commencing in 2019 through the encouragement of criteria 1-5 (as outlined above) within grant arrangements.

Since then, Fair Work First has evolved from voluntary consideration to also include mandated compliance.

In September 2021, Ministers wrote to public sector leaders setting expectations for public bodies to implement Fair Work First criteria through their employment practices, relevant grant funding and public contracts. This was supported by Statutory Procurement Guidance.

From 14 October 2021, Fair Work First policy made it mandatory that suppliers contracted to the Scottish Government pay at least the real Living Wage to all workers involved in delivering those contracts, where relevant and proportionate to do so. It was also clarified that other public bodies in Scotland can mandate that their suppliers pay the real Living Wage.

Also in autumn 2021, two additional Fair Work First criteria were introduced in response to particular employment issues that arose during the COVID-19 pandemic (‘flexible and family friendly practices’, and ‘opposing the use of fire and rehire practice’), and the first iteration of Fair Work First Guidance was published by the Scottish Government.

From 1 July 2023, changes were made to Fair Work First policy – referred to as ‘conditionality’. The idea behind conditionality was introduced in the Fair Work Framework, which identified that levering fair work might include incentivising good practice, with the public sector an important lever.

Conditionality involved making payment of at least the real Living Wage and provision of appropriate channels for workers' voice, such as trade union recognition, a condition for accessing discretionary grants in Scotland. (The Scottish Government’s Fair Work First Guidance defines discretionary grants as those awarded by and across the public sector, as opposed to non-discretionary funding, such as grant-in-aid funding to public bodies, or to local government general revenue funding).

Voice exists at both collective and individual levels and employers are required to show how genuine and effective voice is evidenced at both levels in order to access discretionary grants. For organisations with fewer than 21 employees, only individual voice must be evidenced, however the collective element is still encouraged.

The real Living Wage condition as part of grant arrangements requires that the following groups of workers who are aged 16 and over, including apprentices, are paid at least the real Living Wage:

• All staff who are directly employed by the grant recipient and work in Scotland.
• All staff who are directly employed by the grant recipient and directly engaged in delivering the funded activity but based elsewhere in the UK.
• All workers (in a third-party organisation) not directly employed by the grant recipient who are directly engaged in delivering the funded activity and based anywhere in the UK.

1.3 Evaluation aims and objectives

In July 2025, the Scottish Government commissioned Pye Tait Consulting to undertake an independent evaluation of Fair Work First to assess whether the policy has achieved its objectives, as well as to understand implementation challenges, any potential unintended consequences, and how these have been managed. The Scottish Government intends to use the findings to inform the future design and delivery of Fair Work First.

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.

1.4 Evaluation design and oversight

This evaluation uses Theory of Change (TOC) methodology, in line with HM Treasury’s Magenta Book, which provides guidance on evaluation design for government. TOC methodology helps to test how and why a programme or policy works (or fails) by analysing the underlying assumptions and causal chain spanning inputs, activities/processes, outputs, outcomes and longer-term impacts.

The Scottish Government had already developed a logic model for Fair Work First at the time the evaluation was commissioned. Pye Tait Consulting worked with the Scottish Government to refine and update the logic model following inception. A copy of the evaluation logic model can be found in the supporting documents.

To help guide and steer evaluation design and delivery – as well as discuss and reflect on emerging findings at key stages – the Scottish Government convened a Research Advisory Group (RAG). Members comprised Scottish Government policy representatives and an external advisory body, equality organisations, employer representative bodies, public sector funder representatives and worker representative bodies. The RAG convened five times during the research.

1.5 Methodology

To explore the background, context and high-level perspectives on various aspects of Fair Work First, Pye Tait Consulting facilitated four scoping discussions with Scottish Government policy representatives.

Following these discussions, interviews were conducted with representatives from 12 stakeholder organisations including, but not limited to, RAG members. The stakeholder interviews sought input from a mix of buyer/funder bodies, employer representative bodies, worker representative bodies, and equality bodies.

The scoping and stakeholder interviews helped to inform Pye Tait Consulting’s development of the following:

• A Fair Work First Policy System Map to articulate the key stakeholders, functions and processes associated with Fair Work First (available in a separate Annex).
• Three online survey questionnaires (available in a separate Technical Annex).

The online surveys served as the principal evaluation tools and were aimed at the following respective audiences:

• Public sector organisations in Scotland that either: i) procure the services of third-party suppliers; or ii) award discretionary grants^[1] to employers. These respondents could answer on behalf of their whole organisation or a subset thereof (department/function/division/unit etc.).
• Employers that have been awarded a contract and/or a grant by a public sector organisation in Scotland.
• Workers of organisations that have been awarded a contract and/or a grant by a public sector organisation in Scotland.

It was a deliberate intention of the Scottish Government for this evaluation to only seek survey responses from employers that had prior experience of Fair Work First through having received a contract and/or a grant by a public sector organisation in Scotland, as well as workers within these organisations.

Pye Tait Consulting designed the online surveys in close collaboration with the Scottish Government and with input from the RAG.

The survey links were distributed using a “waterfall methodology” as follows:

• The Scottish Government distributed the online survey of buyers and funders to relevant departments and functions with its own organisation, as well as to other relevant public sector organisations in Scotland.
• The survey link was further shared through bulletins issued via the Public Contracts Scotland (PCS) system.

• Communications invited buyers and funders to complete the survey, as well as to share the link to the separate online survey of employers with those organisations to whom they had awarded contracts or grants since October 2021.

  • The backstop of October 2021 was chosen because this was when the Scottish Government implemented new Fair Work First arrangements and issued new Fair Work First Guidance.
• Employers in turn were invited to complete the online survey of employers, as well as to share the link to the separate online survey of workers, with members of their own workforce.

The online survey of employers included a screening question to ensure only those organisations in receipt of a contract or grant within the relevant time period took part. The online survey of workers was also only distributed to relevant employers, to ensure that only members of these organisations’ workforces took part.

The online survey of workers incorporated a prize draw incentive which participants could opt into in order to stand a chance of winning one of three £100 Scotland Loves Local vouchers. The prize draw process was facilitated independently by Pye Tait Consulting in line with market and social research industry guidelines.

All three online surveys opened on 27 October 2025 and closed on 23 January 2026.

Survey respondent number are as follows:

• Public sector organisations in Scotland that 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 within organisations that have been awarded a contract and/or a grant by a public sector organisation in Scotland – 888 responses received.

Further detail on the survey respondent profile, including numbers of respondents within specific sub-groups, can be found in Appendix 1.

Respondents taking part in all three surveys were asked if they would be willing to take part in a follow-up in-depth interview to explore their views and feedback in more detail. From those consenting, Pye Tait Consulting used purposive sampling to select participants in order to ensure a mix of respondent types (e.g. organisation type, size or sector, as well as a mix of protected characteristics from those responding to the survey of workers). Additionally, respondents were selected to ensure a mix of positive, neutral and negative views in relation to experiences of fair work and Fair Work First, as established from the survey responses.

A total of 22 in-depth interviews were conducted with the following:

• 5 buyers and funders.
• 10 employers.
• 7 workers.

Six case studies were then developed with a subset of those employers responding to the survey (and in some cases an in-depth interview). The purpose of their creation was to enrich the findings.

In addition to the primary research and running alongside it, Pye Tait Consulting undertook a rapid evidence review to assess the existing evidence base relating to aspects of Fair Work First process and impact. The findings from the desk research are embedded within this report.

1.6 Research limitations

1.6.1 Survey representation

It was not possible for the three surveys to be representative by design. This is because insufficient data are available to define the overall population of:

• Public sector buyers and funders in Scotland that award contracts and/or grants.
• Employers in receipt of contracts/grants (although some assumptions with respect to the number of grant awards are presented in section 2.2).
• Workers within those organisations.

The waterfall approach to distribute the survey of employers and workers provided limited control over sampling, while survey sub-group quota controls were not applied as it was important to maximise the overall number of responses. As a result, the profile of respondents within various sub-groups may not be representative of their wider populations. For example, 554 out of 888 respondents to the worker survey (63%) self-report as being in managerial or professional occupations, which could have the effect of skewing perspectives. Further details on the respondent profile can be found in Appendix 1.

Additionally, surveyed buyers and funders could submit more than one response to the evaluation – either on behalf of their whole organisation or a specific department or function – dependent on how procurement or grant arrangements are managed.

All of the above points mean that the survey results cannot be generalisable to their respective wider populations.

1.6.2 Understanding the difference that Fair Work First has made

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, for several reasons.

Firstly, Fair Work First is a complex policy, involving both procurement and grants, that has evolved over several years and which operates in a complex delivery landscape. This made it important to keep the scope of the evaluation as focused as possible in the circumstances (i.e. to understand practices of those employers in receipt of public money), to help maintain analytical rigour and reduce potential for ambiguity. Secondly, the policy may have influenced practices more broadly beyond those in direct receipt of Scottish public sector contracts or grants, thus presenting a key challenge in locating a discrete population of employers not aware of or not having engaged with Fair Work First at all. Thirdly, whilst consideration was given to including employers who may have considered accessing Fair Work First but were ultimately deterred from applying (e.g. due to the criteria), identifying and accessing this population was similarly judged to be challenging in practice. As such, forming a suitable control group was not deemed possible.

Instead, a theory-based approach was taken which – in line with HM Treasury Magenta Book principles – is well suited to the evaluation of complex interventions, or simple interventions in complex environments. To address the counterfactual question “what would have happened in the absence of Fair Work First?”, it was agreed with the Scottish Government to assess this through the lens of the difference that Fair Work First has made, using a logically constructed approach. This involved asking surveyed employers about their fair work commitments pre and post key dates in the Fair Work First implementation timeline, as well as the perceived difference Fair Work First has made to their commitments. Further questioning examined the potential influence of other (confounding) factors to build a picture of the contribution Fair Work First has made to fair work commitments and practices overall. This is further backed up by insights from workers.

1.6.3 Other research limitations

• Fair Work First is not a single intervention aimed at a single group; moreover, it has evolved at several points without any other evaluation activity carried out to date. This presents challenges for evaluation robustness. For example, no baseline data were gathered before Fair Work First policy commenced, meaning there is no clear picture from “before” the intervention. Survey respondents for this evaluation were therefore asked to think about this retrospectively, which relies on recall and makes the difference that Fair Work First has made somewhat harder to untangle from other external factors.
• Fair Work First is one of many potential factors contributing to workers’ experiences of their workplace, meaning it is not possible fully attribute identified changes to Fair Work First directly. However, the evaluation does seek to better understand these confounding variables and provide an indication of the difference Fair Work First has made based on multiple perspectives.
• The evaluation did not discretely target nor seek to distinguish between employers with relatively stronger and relatively weaker fair work practices. This would also have proven prohibitive from a sampling and delivery perspective. Instead, the evaluation intentionally focused on employers in receipt of public sector contracts or grants to understand their experiences of the process, as well as their perceived impact of Fair Work First more generally.
• The survey of workers did not seek to differentiate between workers in organisations specifically in receipt of: i) contracts only; ii) grants only; or iii) contracts and grants – the reason being that not all workers could be expected to know this, combined with participants’ right to anonymity. However, this information was captured from the survey of employers for deeper analysis of Fair Work First as part of contract and grant pathways.
• With respect to unintended consequences of Fair Work First, it is not possible to fully distinguish between perceived versus actual unintended consequences, especially where these are mentioned in relation to other organisations or groups of people. As such, these should be treated with caution.
• Not all surveyed workers are necessarily employed by an organisation that answered the employer survey questionnaire. Whilst the survey distribution methodology means this will likely have been achieved to some extent, this cannot be guaranteed with respect to all surveyed workers. As such, the evaluation may draw worker‑level data and employer‑level data from different underlying populations. This means it is not possible to make direct links between reported worker experiences and employer practices.

1.7 Interpretation and terminology

1.7.1 Interpretation

This report examines the evaluation findings thematically, weaving together evidence from the literature review, surveys, interviews and case studies.

Survey base numbers for each question (or sub-question thereof) are provided either:

• Within the text (base=x) where results are described without a figure or table.
• Within charts – either directly below the X axis, or in brackets at the end of each sub-question label.

Not all survey respondents answered all questions, either due to choice (for non-mandatory questions) or due to questionnaire routing rules. As such, base numbers vary. Due to the length of the respective survey questionnaires, it was decided not to enforce answers to all questions.

Percentages in figures and tables do not always add up to 100% for two possible reasons: i) the effect of rounding; or ii) in cases where certain survey questions allowed respondents to select multiple options. Where the latter is the case, the total number of question responses relative to the total number of respondents is made clear under the X axis.

Responses from the survey of buyers and funders are reported in charts and commentary using both values and percentages (this is due to the relatively low survey base of 88). For example, where the commentary states “31 (75%)”, this means 31 respondents, equivalent to 75% of those surveyed.

The employer and worker survey results have been subject to statistical significance testing. This aims to understand whether differences between certain sub-groups (those likely to be of importance, and where base sizes allow) are likely real and meaningful (statistically significant) or due to chance. Due to the non-representative nature of the sample, any differences highlighted should be treated with caution.

Where there are statistically significant differences between sub-groups, these are briefly reported on using text boxes throughout this report – the aim being to demonstrate where there are consistent patterns. Additional discrete reporting of statistically significant differences can be found in section 5.2 (Wider influencing factors, including trade union recognition) and section 6.3 (Equality analysis).

Due to the sheer number of questions, components and sub-groups, it is not possible to report on all significant differences within this report. Full sets of data tables from the three respective surveys (buyers/funders, employers and workers) – including significant differences for each question at the 90% and 95% confidence levels – have been provided separately to the Scottish Government.

1.7.2 Terminology

This evaluation, including associated reporting, intentionally uses the following terms:

• Buyers and funders – public sector organisations in Scotland that award contracts and/or discretionary grants.
• Conditionality – the application of criteria to access public sector grants.
• Fair Work First (including criteria) – when referring to the policy and how it operates as part of public sector procurement and grant arrangements in Scotland.
• Fair work (including practices) – when referring in a general sense to fair work, including employer-led initiatives and those which workers experience.
• Workers – as a catch-all term to refer to employed, contracted, seasonal workers etc.