Date: Mon 5 November 2012

A Living Wage must be guaranteed on public sector contracts - UNISON

UNISON Scotland today urged the Scottish government to use its new procurement law to ensure that public money is only spent with contractors who pay a Living Wage.

Scotland’s largest public services union – along with the Scottish Living Wage Campaign and the Scottish TUC – has made the call as part of Living Wage Week which kicks off today.

Stephen Smellie, Vice Convener of UNISON Scotland said:
“We have made good progress in achieving the Scottish Living Wage so far. Almost all the public sector in Scotland is now committed to paying the Scottish Living Wage - currently at £7.20 per hour, although the new rate will be £7.45. That is good for workers, employers and the wider community.

“But it is a scandal that nearly one in four Scots are still earning below the current Living Wage level. This includes many UNISON members in the community and private sectors.”

“The next step is for the Scottish government to take action to ensure that public money is only spent with contractors who pay a Living Wage.”

Dave Watson, UNISON Scotland’s Head of Bargaining and Campaigns said:
“We believe there are four ways in which the Scottish government can make a real difference on extending the Living Wage to those not yet covered.

"They can use their new procurement law to require firms bidding for public sector contracts to pay the Living Wage.

"They can use their influence with the European Commission to remove barriers to the Living Wage.

"They can establish a Living Wage Unit to promote and oversee the policy.

"And they can produce a Code of Practice on promoting the living wage in procurement."

UNISON is also supporting the One Fair Wage campaign by the Scottish Youth Parliament, and a private members’ bill proposed by Scottish Labour MSP John Park which is currently out for consultation and which also seeks to achieve these objectives.

ENDS

Notes for editors

1. The Scottish Living Wage – UNISON Scotland Briefing 29
Please see the latest UNISON Scotland briefing on The Scottish Living Wage (released today 5 November 2012) at our website here
http://www.unison-scotland.org.uk/briefings/b029_BargainingBrief_ScottishLivingWage_Nov2012.pdf

The Scottish Living Wage - currently at £7.20 per hour, although the new rate will be £7.45 - is good news for workers as they get higher wages that also improves health and job motivation. It’s good for employers because it reduces turnover, improves productivity and attracts better staff through reputational gain. The wider community benefits through lower benefit cost, less stress on the NHS and cash into the local economy.

The Institute of Fiscal studies has calculated sub-living wage employers cost the taxpayer £6bn a year in in-work benefits alone. The indirect cost on poverty is around £25bn a year.

In contrast the cost to employers is minimal at around 1% of wage bill. Even in the retail sector it is only 5%. As a recent study of the London Living Wage shows, even that can be recouped through decreased turnover and better productivity. Even Boris Johnson, the Tory Mayor of London said, “I believe that paying decent wages reduces staff turnover and produces a more motivated and productive workforce”.

2. Four key actions the Scottish government can take to promote the Scottish Living Wage:

• Use the Procurement Reform Bill to amend the Public Contracts (Scotland) Regulations 2006 to require that the living wage is a part of any contracting authorities bid for a public sector contract.
• Seek to influence the European Commission to remove any perceived barriers in EU Directives that prevent the inclusion of the living wage in procurement.
• Establish a Living Wage Unit to advise on, promote and oversee the living wage in the public sector and in procurement.
• In partnership with stakeholders, develop and produce a Code of Practice on promoting the living wage in procurement.

The Scottish Parliament Local Government Committee has produced a detailed report on the Scottish Living Wage that covers many of the key issues and broadly supported its introduction.

UNISON believes that payment of the living wage can be included as a contract performance clause that sets out how the contract is to be performed and must be accepted by the successful tenderer. The Local Government Committee report (Para 98) covers this in more detail and includes a positive Counsel opinion that branches can refer to. The legal risk is largely theoretical as there have been no successful challenges to the policy in the UK.

The EU is also reviewing the Directives that are perceived to be a barrier to procurement clauses. UNISON is working closely with Scottish MEPs to ensure there are no European procurement barriers.

3. Useful links

UNISON response to Procurement Bill consultation
http://www.unison-scotland.org.uk/response/ProcurementReformBill_Response_Nov2012.pdf

John Park MSP’s Bill
http://www.scottish.parliament.uk/parliamentarybusiness/Bills/53618.aspx

London Living wage evaluation report
http://www.geog.qmul.ac.uk/livingwage/

Scottish Youth Parliament – Fair Wage Campaign
http://www.syp.org.uk/one-fair-wage-W21page-345-

Dave Prentis and David Miliband on the living wage
http://www.guardian.co.uk/commentisfree/2012/nov/03/miliband-prentis-living-wage

For further information please contact:
Dave Watson, Head of Bargaining and Campaigns, UNISON Scotland, on 07958 122 409
Malcolm Burns, Communications Officer, UNISON Scotland, 0141 342 2877 or 078765 66978

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