SCVO response to Becoming a Fair Work Nation consultation

About our submission

SCVO welcomes the opportunity to respond to the Scottish Government’s Becoming a Fair Work Nation Consultation. 

Our submission draws on evidence from:

• Fair work webinars we hosted throughout 2021
• Feedback from members of SCVO’s HR and Employment Support Service Advisory Group
• A survey shared with our members and the wider sector as part of our pre-consultation engagement
• A focus group with voluntary sector colleagues to review our position for this submission
• One-to-one meetings with voluntary organisations
• SCVO’s own experience of striving to ensure we are a fair work employer
• SCVO policy submissions and engagement with the sector throughout 2020-21.

Summary

The voluntary sector is critical to Scotland’s wellbeing, prosperity, and success. Our organisations employ over 100,000 paid staff, and more than 1 million volunteers work with us to support people and communities across Scotland to live healthy and fulfilling lives. This workforce is the true lifeblood of Scotland’s voluntary sector and is crucial to Scotland’s economy and society.  

SCVO want to ensure the sustainability of the voluntary sector workforce by securing the tools and support our sector needs to realise the Fair Work Principles. To achieve this, the Scottish Government needs to support the voluntary sector to adapt to the opportunities and challenges offered by Fair Work. The Scottish Government must:

Volunteering

• recognise the benefits of volunteering to individuals, organisations, local communities, and Scottish society. 
• adopt paid leave days for volunteering as an ambition of the Fair Work agenda.
• encourage all public, private, and voluntary sector organisations to utilise A Volunteer Charter.

Living wage

• work with the voluntary sector to understand the challenges it encounters in paying the Living Wage and develop solutions with us.
• engage with the voluntary sector to ensure Fair Work First, and its expansion to include the Living Wage, are understood.
• recognise the importance of the voluntary sector’s good practice on pay to influence other parts of the economy.

Funding

• make good on the Scottish Government’s commitments to multi-year funding in Scotland’ first multi-year Resource Spending Review since 2011.
• ensure multi-year funding includes inflationary uplifts, greater flexibility and trust, and more support for core operating costs. 
• build upon good funding practice currently in use in some Scottish Government directorates to develop this further and implement across government. 

Procurement

• ensure cross-sector partnership of the voluntary, public, and private sectors, is central to new commissioning and procurement models.
• develop and agree to appropriate minimum contract standards for the provision of publicly funded services with voluntary, public, and private sector partners. 
• place responsibility on commissioners to provide the support needed to realise the Scottish Government’s Fair Work Principles.  
• no longer include non-committal frameworks in procurement contracts, which run counter to the Fair Work agenda.

Awareness and implementation

• ensure all Scottish Government departments understand Fair Work and invest in organisations that support in the Fair Work agenda.
• raise awareness of the Fair Work Convention, the Fair Work Dimensions, and Fair Work First in the voluntary and other sectors.
• support and resource the voluntary sector to adopt Fair Work and contribute to the Scottish Government’s ambition of becoming a Fair Work Nation.

Our response

SCVO welcomes the opportunity to respond to this consultation.

Scotland’s voluntary sector is hugely diverse. It ranges from tiny volunteer-run community groups, like village halls and playgroups, to major public service providers in social care and housing. In Scotland, we enjoy the benefits of 40,000+ voluntary organisations, including:  

• more than 6,000 social enterprises  
• 25,000 registered charities  
• over 100 credit unions  

Together these organisations employ over 100,000 paid staff - more than the 86,000 employed in financial services in Scotland. At the same time, three-quarters of charities are run entirely by volunteers.

If the Scottish Government is to achieve its goal of building a “fair work nation” by 2025, they must do more to understand the environment the voluntary sector operates in, and the impact of this environment on the sector’s ability to adapt to the opportunities and challenges offered by fair work.

Q2. What are the main opportunities for adopting fair work practices in your sector? 

SCVO has identified three primary opportunities for adopting fair work practices in Scotland’s voluntary sector, relating to volunteering, the living wage, and the social care workforce.

First opportunity: create an environment which encourages volunteering

Creating an environment where volunteering is accessible to all should be central to the Scottish Government’s Fair Work Nation ambitions. To achieve this:

• the Scottish Government must recognise the benefits of volunteering to individuals, organisations, local communities, and Scottish society. 
• paid leave days for volunteering should be an ambition of the Fair Work agenda, as recommended by the Social Renewal Advisory Board’s Communities and Volunteering Circle.
• Organisations in all sectors should be encouraged to utilise A Volunteer Charter to develop detailed policies and procedures and to ensure that volunteer roles are designed and negotiated around the needs of volunteers.

In Scotland, 28% of adults volunteer (The Scottish Household Survey) and almost three quarters (72%) of Scottish charities are run entirely by volunteers, including over 250,000 trustees of voluntary organisations. Volunteering is also estimated to contribute £5.5 billion to the Scottish economy (Volunteering Matters) while having proven tangible benefits for individuals and communities (Scottish Volunteering Forum).

SCVO, as part of the Scottish Volunteering Forum, believes that the Scottish Government and others such as local government can do more to recognise the true value of volunteering and to support people and communities to volunteer. The vital role of volunteers during the Covid 19 pandemic is just one example of the many essential contributions of volunteers across Scotland.

Without Fair Work policy change, the increasing reliance on the ‘civic core’ (where a minority of formal volunteers are responsible for a growing majority share of the hours) will become unsustainable (Volunteer Glasgow). Progressively more people in the working age population are in precarious work, and often with unpredictable working hours. This creates both insecurity for the individual and a barrier to volunteering. Implementing the Fair Work Principles is central to creating the work/life balance that enables people to volunteer.

Scottish Government, local government and many others in the public sector offer employees paid leave for volunteering. The Scottish Government should use the powers and levers it has available to encourage employers across all sectors to offer or extend paid leave for volunteering, a recommendation of the Social Renewal Advisory Board’s Communities and Volunteering Circle. Employers should be encouraged to support volunteering through corporate social responsibility policies and long-term partnerships with the voluntary sector that enable staff protected time to volunteer.   

Our economy and communities need both the paid and unpaid contributions that we can all make. The National Performance Framework, recovery and renewal, and the Fair Work agenda, present an opportunity to work across policy silos and create a fairer, sustainable, wellbeing economy that supports and enables volunteering for all.

Second opportunity: support payment of the Living Wage

The Scottish voluntary sector’s workforce has been at the heart of the response to the pandemic, delivering essential services efficiently and flexibly under pressure. Not only should this vital workforce have the security of a Living Wage, supporting the voluntary sector to pay the Living Wage can be part of altering norms and behaviours on pay across sectors and the economy. To support payment of the Living Wage in Scotland’s voluntary sector, the Scottish Government must:

• work with the voluntary sector to understand challenges to payment of the Living Wage and develop solutions.
• engage with the sector to ensure that Fair Work First, and the expansion of this criteria to include the Living Wage, are understood.
• recognise the importance of maintaining and building upon the voluntary sector’s good practice on pay to influence other parts of the economy.

Many voluntary organisations aim to minimise the pay ratio between the lowest and highest paid staff. As a result, the voluntary sector tends to pay staff on the lower end of the scale better than the private sector, while workers at the higher end of the scale tend to be paid less than in the private sector (Pay on Display). Despite this, across the UK, 17% of workers in the voluntary sector earn less than the Living Wage. While this compares favourably to the private sector (26%), in the public sector only 6% of workers earn less than the living wage (Living Wage Foundation).

Many voluntary sector organisations have faced significant financial challenges in paying the living wage. There is often no change to government funding of voluntary organisations to reflect rising inflation, meaning some organisations have been unable to provide a cost-of-living increase for five years or more. Many procurement contracts from health and social care partnerships have not covered uprating, despite public sector partners receiving this for their staff. Static funding is hugely challenging for all voluntary organisations, and small and medium-sized organisations struggle most in plugging the gaps. Those more fortunate may be able to use some reserves or other income streams to top-up government grants and contracts, but this is unsustainable.

The sector plays a crucial role in tackling inequality through its employment. The voluntary sector employs more women, more part-time workers, and more disabled people than the public and private sectors (Pay on Display). Still, women and disabled people are among those who are at greater risk of living in poverty, an inequality which the Poverty Alliance stress has deepened during the pandemic. It ist crucial that the voluntary sector is adequately resourced and supported to pay all employees the Living Wage.  

The expansion of Fair Work First criteria to include payment of the Scottish Living Wage is an opportunity for the Scottish Government and the voluntary sector to work together to remove barriers to paying the Living Wage.

However, SCVO is concerned that too few people within the sector are familiar with Fair Work First. Our pre-consultation engagement found that only 46% of respondents had previously been aware of the Scottish Government’s flagship policy. While the number of respondents was limited (33), it suggests that the Scottish Government can do more to raise awareness of Fair Work First.

Third opportunity: social care workforce

To recognise the contribution of the social care workforce in Scotland, the Scottish Government, local authorities, and other funders must:

• recognise that workforce costs are a substantial part of procured services, without financial provision within contracts, voluntary organisations will have no means of meeting Fair Work aspirations
• regard the social care workforce as equal to those in health, where better wages, job security, and terms and conditions are available
• develop and agree on appropriate minimum contract standards for the provision of publicly funded social care services, consistent with the Fair Work Principles and as called for by the Fair Work Convention.

In 2019 the Fair Work Convention reported that Fair Work is not consistently delivered in Scotland’s social care sector and funding and commissioning systems often drive this. SCVO welcomed the explicit link between Fair Work and commissioning and procurement practices in A National Care Service for Scotland consultation. National standards for commissioning and procurement will, however, only be effective if accompanied by changes in culture and practice of commissioning and procurement bodies.

The Scottish Government’s Fair Work ambitions are an opportunity to recognise the contribution of the social care workforce in Scotland.  Currently those working in social care are primarily female and low paid. An estimated 20% of this workforce are not on permanent contracts, while 11% are on zero-hour contracts. The voluntary sector employs 28% of this workforce. The Scottish Government, local government, and other public sector partners must adequately resource voluntary organisations to provide enhanced job security, pay, conditions, and training and development for this vital, overworked, and under-resourced sector. 

Q3. Please explain how you think these opportunities can be maximised in your sector?  

In our response to question two we have offered detailed interventions that could be made to empower the voluntary sector to maximise the opportunities offered by Fair Work.  

Q4. What are the main challenges to adopting fair work practices in your sector? 

SCVO has identified two major challenges to adopting fair work practices in Scotland’s voluntary sector, relating to single-year funding and procurement and commissioning.

First challenge: an over reliance on single-year funding 

To support Fair Work practices in the voluntary sector, the public sector must make a substantial shift away from single-year funding and move to multi-year funding of voluntary organisations. The Scottish Government must lead the way by:

• making good on the Scottish Government’s commitments to multi-year funding in the upcoming multi-year Resource Spending Review.
• ensuring multi-year funding includes inflationary uplifts, greater flexibility and trust, and more support for core operating costs. 
• building upon good funding practice currently in use in some Scottish Government directorates to develop this further and implement across government. 
• Voluntary sector funding arrangements are central to job security in the sector. Short and medium-term funding for projects and roles creates uncertainty for managers and staff, and the absence of longer-term multi-year financing compounds this. Organisations find themselves constantly trying to find replacement funding year to year and are forced into becoming reactive to funding changes and opportunities.

Such uncertainty creates an environment where voluntary organisations must frequently issue redundancy notices, particularly at the end of the financial year, when delayed decision-making from the Scottish Government and other funders creates further unnecessary uncertainty. This results in organisations losing staff and volunteers with skills and expertise, with stressful changes for those who face losing their role, those who remain, service users, and the managers who plan, decide, and communicate changes.

Organisations that receive rolling funding on a year-by-year basis often do not see inflationary uplifts. For example, SCVO is aware of organisations that have not seen an increase in the funding they receive from local or national government in up to 12 years. Any increases, where available, often fall short of what is needed to meet rising staff costs and changes to the Living Wage.

Before the pandemic, SCVO's Third Sector Forecast (January 2019) found:

• 91% of respondents said planning for the future is a challenge
• 91% of respondents said sourcing long-term funding is a challenge
• 88% of respondents said diversifying funding is a challenge
• 82% of respondents were worried about the challenges created by funding cuts
• 67% of respondents thought recruiting and retaining staff would be a challenge
• 67% thought recruiting and retaining volunteers will be a challenge
• 10% expected to see redundancies.

Voluntary organisations with paid staff were also concerned about increasing workloads, static pay, and job insecurity.

Current funding processes between public and voluntary sectors are not sustainable. An environment is created that undermines job security for employers that wish to provide Fair Work and their workers.

More recently, our members also told us:

"Due to annual funding from Scottish Government, which doesn't cover our core costs, recruitment is often on short-term contracts or is subject to ongoing funding, of which there is no guarantee". 

Voluntary Sector Intermediary

"Like all voluntary organisations, we have very short-term funding, so while our contracts are on paper secure, everyone knows their job is only as secure as the current piece of short-term funding".

Registered charity

"Funding issues ensure that no one has security of employment. Sustainability for voluntary sector organisations is fundamental to progressing positive change in our communities and in employment security".

Social Enterprise

"Everything we do is dependent on funding, and amounts are often not confirmed until very late in the financial year".

Registered charity

"We are a small organisation within an uncertain funding environment. It is just not possible to provide predictable work in the longer term".

Registered charity

The Scottish Government often cites the annual budget cycle as the primary reason for the one-year funding of voluntary organisations, but the relatively small value of most voluntary sector contracts compared to overall budgets lead us to believe that it would be possible for Scottish Government to make a multi-year commitment to voluntary organisations within existing arrangements. SCVO, fellow intermediary organisations, and others such as The David Hume Institute, have repeatedly called on the Scottish Government to pivot towards funding the voluntary sector in ways that move beyond the annual cycle.

This year, many Scottish Parliament committees have taken a genuine interest in multi-year funding and all of Scotland’s political parties supported multi-year funding for the sector in the lead up to the 2021 Scottish Parliament Election. In the past few weeks, Scotland's Auditor General also called for longer than 12 months of funding when speaking to the Public Audit Committee.

SCVO welcome Scotland's first Resource Spending Review since 2011, which should allow for 3–4-year spending. The Cabinet Secretary for Finance and Economy has promised to engage with the voluntary sector and to reassure voluntary organisations of their multi-year position when the Scottish Government publishes the final Resource Spending Review in May, and we expect to see long-term support for addressing the barriers voluntary organisations face in adopting Fair Work practices and for this to filter through to local government funding arrangements with the sector as a necessity.  

As one of our members said:

“Addressing the issue of sustainable funding will have a huge impact on the capacity of thousands of voluntary organisations to better plan and progress all 5 dimensions of Fair Work”.

Social Enterprise

Second challenge: Scotland’s approach to commissioning and procurement

We need a procurement model based on collaboration not competition. To achieve this:

• a cross-sector partnership of the voluntary, public, and private sectors, should be central to a new commissioning and procurement model. The Scottish Government should include all sectors in strategic planning to ensure joint goals and shared risks.
• partners should develop and agree to appropriate minimum contract standards for the provision of publicly funded services. Such standards consistent with the Fair Work Framework should cover, the Living Wage, income stability, terms and conditions, and appropriate supervision, training, and development. 
• commissioners should be responsible for providing the support needed to ensure the Fair Work Principles are realised.
• non-committal frameworks should no longer be included in procurement contracts, as recommended by the Fair Work Convention.

SCVO has highlighted problems with the commissioning and procurement of services from the voluntary sector for many years, most recently in our response to the Economy Committee in January 2021. 

SCVO carried out two surveys, in 2013 and 2019, to capture members’ experiences of procurement processes. The latter showed a small improvement in members’ experiences of good practice (favourable contract arrangements, such as the inclusion of minimum wage or inflationary uplift, multi-year funding, and full cost recovery).

Overall, however, voluntary sector organisations across Scotland continue to feel constrained, pressured, and under-valued by current procurement processes. The result, amongst other consequences, is uncertainty and financial pressure on organisations, creating negative outcomes for staff. 

Commissioning and procurement practices focused on the lowest cost of service delivery frustrate the sector’s desire to adopt Fair Work Principles. These challenges include: 

• competitive tendering, which creates unnecessary strain and uncertainty for the voluntary sector and its workforce while also failing to deliver a rights-based, person-centred approach.
• one-year contracts, which make it difficult for organisations to plan and often result in the need to issue redundancy notices on a frequent basis.
• the lack of full cost recovery, insufficient support to cover the living wage or annual increases to the living wage, and a trend of asking voluntary organisations to take on more with reduced financial support, which cause financial stress and stretch workers and volunteers.

Similarly, non-committal frameworks create uncertainty for voluntary organisations, resulting in precarious work and disempowering workers. Workers are recruited on contracts with only a few hours per week guaranteed but are often asked to work 40 hours or more per week, sometimes at short notice, to fulfil contracts. Most staff on these low wage contracts are women. Staff shortages in the care sector exacerbate pressure to deliver procured contracts, putting unfair pressure on the existing workforce to fill gaps. Non-committal frameworks should no longer be included in procurement contracts, as the Fair Work Convention recommended.

SCVO has long advocated those organisations who want government support must offer proper contracts, end the inappropriate use of minimal hours contracts, pay the Living Wage, and tackle gender-based inequality. Procurement processes should be open to those who make a meaningful contribution to the Fair Work agenda and create a more equal society. Commissioners must be responsible for ensuring contracts provide the support needed to realise these ambitions.

In a short survey to inform this consultation, one member said:  

“Although we can offer job security, due to volume of work and ongoing contracts, the issues around procurement and funding levels make financial security in relation to level of salary, general terms and conditions, and pension rates, challenging. This is not an organisational issue but a national strategic social and economic issue. The lack of control organisations have on the context they operate in is highly challenging” 

Registered charity

A radical overhaul of commissioning and procurement practices is urgently needed to empower the voluntary sector to achieve the Fair Work Nation ambitions.

Q8. Please set out any further actions you think the Scottish Government should take to deliver Fair Work for everyone.

To realise the Fair Work Nation ambitions the Scottish Government must:

• ensure departments across Scottish Government understand Fair Work and invest in organisations that support in the Fair Work agenda
• raise awareness of the Fair Work Convention, the Fair Work Dimensions, and Fair Work First in the voluntary and other sectors
• support and resource the voluntary sector to adopt Fair Work and contribute to the Scottish Government’s ambition of becoming a Fair Work Nation.

As noted previously in our response, SCVO shared a survey with our members and the wider sector as part of our pre-consultation engagement. In response to the survey, 30% of respondents said they had not heard of the Fair Work Convention. Of those who had heard of the Convention, 27% of respondents had not heard of the Convention’s Fair Work Dimensions. Similarly, only 46% of those who responded had previously been aware of Fair Work First. While our pre-consultation survey had a limited number of respondents, SCVO is concerned that even among this engaged group, few were familiar with the Scottish Government's flagship Fair Work First policy.

In face-to-face conversations and several SCVO webinars that covered Fair Work, we found that colleagues in the sector are unfamiliar with Fair Work First, even when their organisations are fairly engaged in other related activities. Fair Work First aims to drive fair work across the labour market by applying fair work criteria to grants, other funding, and contracts being awarded by the public sector. Therefore, Scottish Government must do more to ensure voluntary organisations are aware of and understand Fair Work First. Ensuring all departments across Scottish Government understand Fair Work and engage with the many organisations that support the Fair Work agenda should be a key priority.

One of our members said:

“Our sponsoring Scottish Government directorate has never mentioned Fair Work or Fair Work First to us... We need engagement from the Scottish Government and the engagement can't just be between the Third Sector Unit and organisations sponsored through them”.

Voluntary Sector Intermediary

Our survey (58%) and our wider engagement activities have found that job security is the sector’s most challenging Fair Work issue. As discussed in depth in our response, existing funding and procurement practices undermine aspirations to offer secure work and must be addressed if the Scottish Government’s Fair Work aspirations are to become a reality for the sector’s 100,000 employees.

A lack of guidance and support to implement the Fair Work Dimensions is another key concern among voluntary sector colleagues who, while interested in progressing towards Fair Work, are unclear what actions they can take. There is a need for clear, succinct, practical guidance on what Fair Work is and how voluntary organisations can implement it affordably and easily. Support to review existing policies and practice as well as advice on development is also needed. Managers and HR staff require tailored support in championing and executing Fair Work. It is very concerning that, while Fair Work has been a Scottish Government priority since 2016, many members of SCVO’s HR and Employment Support Service Advisory Group (comprising of around 50 HR professionals) were unfamiliar with the agenda prior to joining our Advisory Group.

Those familiar with the Fair Work agenda are enthusiastic about the opportunities Fair Work can bring. However, the extent to which the Scottish Government is committed to supporting the sector to achieve Fair Work for all is unclear. Support and resources are needed.

Q9. Please set out any other actions you think are required to deliver Fair Work for everyone, including who should take this action. 

Sharing good practice across sectors is also crucial if we are to encourage more employers and employees to follow Fair Work principles. While we know that the voluntary sector will need more resources to implement Fair Work, it is also worth noting that some organisations across the sector are already implementing Fair Work. As an example, we recently held a webinar where organisations that have switched to a four-day week shared their experiences and encouraged discussion about what may be possible.

The voluntary sector is vast and encompasses a wide range of organisations. They will not all face the same challenges or benefit from the same opportunities all the time, but we can all learn from each other and share this learning more widely. SCVO would be happy to work with Scottish Government to raise awareness of the Fair Work agenda. We are also interested in sharing examples of good practice from the public and private sectors to assess what could potentially be replicated within our sector and vice versa.

Q11. What is the most important thing that you or your organisation can do to help Scotland become a Fair Work Nation? 

As mentioned earlier in this response, it is clear from our consultation and interactions with a wide range of voluntary organisations that despite current efforts by SCVO, the Fair Work Convention and the Scottish Government, the Fair Work Agenda is not widely known or understood.

We realise that, alongside recommendations for the Scottish Government, SCVO and the voluntary sector also have a role to play.

To achieve a Fair Work nation by 2025, the Scottish Government must ensure voluntary organisations are aware of the Fair Work agenda and Fair Work First, and understand the benefits for their organisation, staff, volunteers, and service users.

To support this, SCVO will continue to promote Fair Work through our events, working and advisory groups, networks, and publications. We will work with organisations to ensure their stories are shared and develop case studies that demonstrate what practical steps any sized organisation can take to become a Fair Work employer.

We will also share our own story. Some of the actions SCVO has undertaken include:

• using the Fair Work self-assessment tool to ask our staff how they feel we are doing as an employer. This has allowed us to identify areas where we are doing well and areas where we need to improve
• maintaining our commitment to being a Living Wage employer
• working closely with our Trade Union colleagues to ensure we engage with staff across a wide range of issues
• regularly communicating with staff encouraging and listening to feedback
• reviewing our policies and procedures to ensure they reflect the Fair Work dimensions. For example, ensuring all staff have opportunities to develop and progress.

Some of these actions are easier to implement than others, depending on the size and resources of an organisation. We would be happy to work with the Scottish Government to support colleagues to start their Fair Work journey.

Conclusion

To provide security for staff, volunteers, and the many people and communities the voluntary sector works with, we need the Scottish Government to invest in and recognise the voluntary sector as an employer, a partner, and a vital social and economic actor.

In our response, we have shared clear actions that the Scottish Government could take to create a more sustainable voluntary sector. Our sector needs recognition, resources, and, crucially, new approaches focused on creating sustainable multi-year funding and procurement and commissioning processes.

These challenges and their solutions are not new but are essential to secure the vital services our sector provides people and communities across Scotland for the future. Collaboration, implementation, and resources are now required to realise change and support the sector towards Fair Work. We hope that the Scottish Government share our aspirations for the sector and urge action on these issues. 

In our response, we have shared clear actions that the Scottish Government could take to create a more sustainable voluntary sector. Our sector needs recognition, resources, and, crucially, new approaches focused on creating sustainable multi-year funding and procurement and commissioning processes.

Contact

Sheghley Ogilvie, Policy and Public Affairs Officer

sheghley.ogilvie@scvo.scot Tel: 0131 474 8000

About us

The Scottish Council for Voluntary Organisations (SCVO) is the national body representing the third sector.

There are over 40,000 voluntary sector organisations in Scotland involving around 138,000 paid staff and approximately 1.3 million volunteers, managing an annual income of over £6 billion.

We’re passionate about what the voluntary sector can achieve. Along with our community of 2,700+ members, we believe that charities, social enterprises and voluntary groups make Scotland a better place.

We lobby government on policy issues, create jobs for young people and support organisations to embrace and promote digital skills. We also help with day-to-day stuff, like affordable office space, discounted training courses, funding opportunities and information and support to help people set up and run their organisations.

Further details about SCVO can be found at scvo.scot