Created on: 25 Jan 2018 | Last modified: 24 Aug 2018
1.1 The Educational Institute of Scotland welcomes this opportunity to respond to John Park’s Bill which seeks to require that private sector employees working on public sector contracts will be paid the Living Wage and to require Scottish Ministers to prepare and report to the Parliament on a strategic plan to promote the Living Wage.
1.2 The EIS has, in recent years, been involved with other organisations in work highlighting the effects of poverty on educational achievement and attainment and has been to the fore within both the STUC and TUC on this important issue. The fact that 6 out of 10 of poor children are currently living in families suffering "in-work" poverty points very forcibly to the fact that the "Living Wage" should, in fact, have the same legal status as the "Minimum Wage" and be enforceable through statute.
1.3 The EIS, however, congratulates John Park on bringing this Bill to the Scottish Parliament and fully supports his proposal to address low pay amongst those employees by using contractual arrangements (previously referred to as contract compliance) within public sector procurement so that businesses which benefit from public sector contacts would be obliged to pay the Living Wage to employees engaged in the relevant contract.
1.4 The Living Wage was first established in 2007 and currently stands at £7.20 per hour. This contrasts with the National Minimum Wage which, for those aged 21 or over, is £6.08 per hour, while for those aged between 18-20 it is £4.98 per hour. It is reckoned that around 550,000 adult employees in Scotland are currently paid below the Living Wage (ie 25% in the private sector and 4% in the public sector receive less than the current Living Wage rate).
1.5 In essence, the principal objective of the Bill is to increase the number of workers paid the Living Wage using both the public procurement process and by encouraging all employers to pay at least the Living Wage to their workers.
1.6 Approximately £9 billion is spent in procuring private sector contracts by the public sector in Scotland and the Bill seeks to introduce a contractual commitment to pay the Living Wage by all private sector employers engaged in the delivery of public sector contracts. The Bill also seeks to promote the Living Wage amongst all those employers who currently pay their staff below this level.
1.7 There is a questionmark over the view of the relevant European Commissioner (Internal Market and Services) and whether EU Member States can mandate payment of the Living Wage through procurement activity. This will be addressed once the Bill has been drafted.