Using Procurement to deliver Living Wage - public bodies are increasingly under pressure to get the most out of their procurement processes, including addressing social and economic challenges.

The Scottish Living Wage Campaign aims to ensure that all employers in the public, private and voluntary sectors pay their workers no less than the Scottish Living Wage.

• The living wage is higher than the national minimum wage,
• It is set at a level that the Campaign considers to be the minimum income that households need to afford an acceptable standard of living.
• As of 5 November 2012, the living wage is set at £7.45 per hour.

The Scottish Parliament carried out an enquiry into the Scottish Living Wage in 2011, and the investigation included consideration of how the living wage may be delivered through public procurement.

In order to achieve this, public bodies would need to make payment of the living wage a requirement in the tender process. The Scottish Parliament asked the European Commission for its view as to whether such a requirement would be compliant with European legislation, and the European Commission responded saying:

• any requirement in the tender process to pay the living wage is likely to breach the relevant legislation
• requirements regarding the level of wage payable to workers are likely to restrict freedom to provide services, and may not go beyond the mandatory legislative rules for minimum protection
• anything more than the minimum wage could not be enforced.

As a result, although public bodies can encourage their service providers to apply the living wage, it is not lawful for a public body to treat a contractor which pays the living wage more favourably than one which does not.

The consideration of social and community benefits etc in public procurement is not a new concept, and it has for some time been widely accepted that social and community requirements have a place in most public contracts. The concept of the living wage is well supported by the Scottish Government and they clearly wish to continue to drive this forward, with consideration of this issue forming part of the consultation on the new procurement reform bill, so it's a case of 'watch this space'.

If you have any questions or would like legal advice about your procurement process, please contact our procurement team.