Real living wage requirement introduced for organisations seeking grant funding

Organisations seeking grant funding in Scotland must pay the real living wage from next July under new requirements.

The condition applies to organisations receiving public sector grants from the Scottish Government, enterprise agencies and public bodies.

Exceptions are allowed in the case of emergency funding and where an organisation is heavily dependent on grant funding and paying the real living wage would threaten its survival.

It means employees in Scotland would receive £10.90 per hour following the increase announcement in September.

The requirement will be introduced from July 1 2023 with a conditionality introduced for eligible agricultural grants from April 2024 following ministerial consultation.

Speaking as he visited MiAlgae, an Edinburgh industrial biotechnology company that receives funding and pays the real living wage, Employment and Fair Work Minister Richard Lochhead said the scheme aims to improve staff retention.

He said: “The Scottish Government is committed to using public sector investment to drive up wages, tackle inequalities and give employees an effective voice.

“This policy is a significant step in strengthening our fair work agenda. For example, in 2021-22 Scottish Enterprise issued £135 million in grants to 953 businesses.

“Fair work and fair pay are good for business. They help improve staff retention and productivity, reduce recruitment costs and contribute to a skilled and motivated workforce.”

Mr Lochhead said some 91% of employees over the age of 18 earned the real living wage in 2022 – a record number, with 2,900 accredited employers.

Circular Economy Minister Lorna Slater said: “An effective voice for workers is vital to ensure better terms and conditions, worker wellbeing and developing progressive and fairer work places.

“The ability to speak, individually or collectively, and to be listened to, is essential to improving workers’ experience as well as improving organisational performance.

“We will work with employers, workers and trade unions, to continue improving the terms and conditions for employees of organisations applying for a public sector grant.”