Scottish Living Wage, subsidies to contracted private/third sector employers: FOI release

Information request and response under the Freedom of Information (Scotland) Act 2002.

FOI reference: FOI/18/03743  
Date received: 17 December 2018
Date responded: 17 January 2019
Information requested

How much money has been spent or set aside by the Scottish Government on subsidising all public contracted private and third sector employers to pay workers the Scottish Living Wage since its inception? Your request is for all contractors so subsidised, e.g. Scottish Government, Local Authority, NHS, health & social care partnerships etc.



In answering your question I will refer to the different areas where the Scottish Government has given a commitment to pay workers the real Living Wage (currently £8.75 per hour and due to increase to £9.00 per hour). 


Adult Social Care Workers 

Since October 2016, the Scottish Government has provided funding to Local Authorities as part of an overall investment in social care to enable care workers providing direct care and support to adults in care homes, care at home, and housing support to be paid the real Living Wage all of which has been baselined annually.  This was in recognition of the need to improve pay for front-line staff working in publicly commissioned services within the independent and third sectors where wages have tended to be lower. During 2018/19 the commitment is being extended to cover overnight support hours.

The funding for implementation of this commitment has been included as part of an overall local authority/ integration authority funding package to cover health and social care integration and social care. The package is based on recognition of a range of policy commitments within social care including the living wage, along with Free Personal Care, Carers’ Act for example; it does not separately identity the costs associated with the Living Wage commitment.

Since 2015/16 this overall funding package for integration and social care has been as follows: 2015/16 £130 million; 2016/17 £380 million; 2017/18 £487 million; and 2018/19 £551 million.  In 2019/20 the Scottish Government draft spending and tax plans (published on 12 December) proposes an overall package of investment of £711 million in integration and social care.


Childcare Workers – Early Learning and Childcare 

The Scottish Government has committed to providing sufficient funding to enable payment of the real Living Wage to all childcare workers delivering 1140 hour entitlement of early learning and childcare (ELC) from August 2020.  This funding is included within the multi-year revenue funding package to support the expansion in statutory entitlement to 1140 hours per year agreed with COSLA in April 2018, which will see annual revenue funding for ELC increase by £567 million by 2021-22 (compared to 2016-17 funding levels). The funding package is based on estimates prepared by local authorities which did not separately identity the costs associated with the Living Wage commitment.


Scottish Government – Facilities Management 

In late 2014 the Scottish Government agreed with its Facilities Management contractor MITIE Technical Facilities Management Services Ltd to roll-out the real Living Wage to MITIE’s staff working on the Scottish Government estate.  The parties agreed to share the costs associated with the uplift.  For the first uplift, Scottish Ministers agreed to cover 60% of the additional costs with MITIE covering the remainder.  Living Wage uplifts in subsequent years have been shared 50/50 between the parties.  The agreed changes restrict the increased payments to only those costs directly associated with wages, employer’s National Insurance contributions, holiday pay, employer pension contributions and sick pay.  The uplift in wages commenced on 1 December 2014.  The additional sums paid are detailed in the table below. 


Contract Period

Additional Resources Funded Directly by Scottish Government

2014/15 From 1 December 2014       








2018/19 *


* NB This is an estimated figure

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