Living Wage: A small step towards supporting people through the current crisis

We live in extraordinary times. Indeed, there’s no such thing as “normal” anymore. The word “crisis” implies a one-off, immediate situation but while we’re still in the long tail of the COVID crisis, we’re also in a cost-of-living crisis which shows no signs of being short-lived. As with the pandemic, the impact is greatest on those who are already vulnerable and it’s exacerbating entrenched inequalities. 

Today’s early announcement of the increase in the real Living Wage rate is one small step towards supporting people through the current crisis. The Living Wage shouldn’t be an aspiration or a ceiling – it’s the bare minimum anyone should expect.  

135,000 people are employed in the voluntary sector in Scotland. 829 charities, community organisations and social enterprises, collectively employing more than 43,000 people, are accredited Living Wage employers, and we know there are many more who pay the Living Wage but haven’t sought accreditation. But we also know from the Living Wage Foundation that 12.5% of voluntary organisations pay below the Living Wage. Organisations who pay the Living Wage want to continue to do so but the current running costs crisis may impact on their ability to find the money their staff badly need as the cost-of-living soars. 

Being a good employer is something that matters to our voluntary organisations, and SCVO supports Scottish Government’s plans for Scotland to become a Fair Work Nation by 2025, including extending the Fair Work First criteria to include paying the Living Wage. Fair work in the voluntary sector must be a priority. 

However, decades of under-funding, “race to the bottom” contracting, followed by the pandemic, and now compounded by the running costs crisis, mean these ambitions cannot be achieved without significant change.  

A significant number of people employed in the sector are funded by public sector grants and contracts. If those people are to be paid the Living Wage (often still less than their counterparts in the public sector are paid) then grants and contracts must have a built-in Living Wage uplift. We have skilled, experienced, and committed people delivering essential public services and they surely deserve at least a decent hourly rate. 

The 2021 Bute House Agreement included extending Fair Work First conditionality to all public sector grants, but the detail of how and when that will apply is still unclear– it’s easier to say than to do. We’re talking with government about what it will mean in practice and how it will be resourced.  

I’m pleased that SCVO is an accredited Living Wage Employer; fair work and valuing our colleagues is part of our culture. But we are “office workers” – we don’t provide frontline services, and while we do get grant funding from various sources, we don’t have to compete with the private sector to deliver public contracts. For many organisations, their world is fiercely competitive and their already-fragile existence is being threatened by inflation, wage pressures and short-termism.  

To properly deliver Fair Work, including paying the Living Wage to staff and contractors, not only is more cash needed now but the long-standing issues of the absence of annual uplifts in grants and contracts, short-term funding arrangements, lack of core funding and delayed decision-making must be resolved.