Gender pay gap action plan: annual report

Ministerial Foreword

Jamie Hepburn MSP,
Minister for Business,
Fair Work and Skills

Our landmark Gender Pay Gap Action Plan, the first in the UK, was published two years ago to coincide with International Women's Day on 8th March 2019. A day that recognised and celebrated the contribution women have made to the domestic and global economy while acknowledging that more needs to be done to eliminate the persistence of the gender pay gap. 

Since then we have experienced domestic and global upheaval, firstly with the onset of Scotland leaving the European Union and the uncertainty that brings to the protections provided by European Union European Pillar of Social Rights.

And then the world was impacted by a pandemic that no one saw coming. COVID-19 has affected every aspect of our lives but women in Scotland have faced particular challenges as a result and face longer-term impacts. Women have been crucial in keeping society together in these uncertain times undertaking the majority of frontline roles that were rightly recognised as essential. Some of the sectors consistently impacted by COVID-19 restrictions with subsequent effects on employment and income have high rates of female employment, for example more than half of those in employment in the Accommodation and food services and Retail sectors are women.^[1] Women from ethnic minorities and young women are also more at risk as a higher proportion are employed in sectors affected by restrictions compared to other sectors. 

Even pre COVID-19, women did a disproportionate amount of unpaid housework and caring in the household. The pandemic has exacerbated these roles and highlighted how important work traditionally seen as 'women's work', such as housework, cleaning and unpaid care is. With necessary school and nursery closures, we know that housework and childcare has fallen more on women than men, which may make it harder for them to maintain or take on employment.^[2] This has prompted UN Women to estimate that the pandemic risks setting women's equality back 25 years.^[3]

Our own analysis suggests the COVID-19 pandemic could exacerbate existing labour market inequalities for protected groups including women and overall the fallout from the COVID-19 pandemic, as well as Brexit, may put pressure on both the gender employment gap and the gender pay gap in coming years.

Indeed, the IMF has warned that COVID-19 threatens to roll back worldwide gains in women's economic opportunities and widen persistent gender gaps.^[4] That is why we are committed to achieving gender equality and will do all we can to Improve women's position in the labour market as a key part of delivering inclusive economic growth.

We achieved our overall ambition "to continue to reduce the gender pay gap for employees in Scotland by the end of this parliamentary term" (May 2021^[5]). 2020 did see us achieve the lowest median gender pay gap for full-time employees on record at 3.0%. This is down from 7.2% in 2019 and lower than the UK as whole which sits at 7.4%. The median gender pay gap for all employees (including full- and part-time employees) in Scotland also fell from 14.4% in 2019 to 10.9% in 2020 – lower than the UK level (15.5%).^[6]

While this is welcome progress, any level of gender pay gap is too high and it is particularly disappointing that employment gaps for minority ethnic and disabled women have marginally widened over the year. It is clear there is work to be done. Since publication of our gender pay gap action plan we have been taking forward a range of actions across government that we committed to in the plan. 

We have shown leadership by taking steps to improve gender competence in policy making, ensure gender equality in procurement guidance, improve intersectional data, including the publication of research to support policy development. On 18 December we published Scotland's first Gender Equality Index which sets a baseline against which Scotland will be able to measure its progress towards equality between men and women through time. 

Since March 2020, we have committed over £1.2bn to support economic recovery. Including £100m to protect jobs and support those who have been made redundant or whose jobs are at risk. The recent budget includes an additional investment of £125m to support employability and skills provision. This includes the Young Person's Guarantee and the National Transition Training Fund which supports those who are unemployed or at risk of redundancy to access training. Advancing equality and inclusion and working to eliminate discrimination will be central to these initiatives to ensure that no one is left behind. 

In employment we have continued to support flexible working as a mechanism to support women and other workers with caring, home schooling or other commitments. COVID-19 has brought a rapid move to flexible working and a need to work from home wherever possible. We funded experts Flexibility Works and Timewise to provide advice and support to a range of businesses and employment organisations on flexible and home working to respond to the COVID-19 crisis. 

We also continue to support employers to advance equality in the workplace through our Workplace Equality Fund. In 2019-20 we provided funding of over £800,000 to 25 projects and our recent round of funding is currently supporting 12 projects with over £300,000 which will support protected groups such as women, ethnic minorities and disabled workers to enter, remain and progress in work. 

Building on our previous 2018 programme, in 2020 we launched a new Women Returners Programme providing over £400,000 to 12 initiatives that promote workplace equality and support women to return to work following a career break with a particular focus on women that experience multiple barriers. 

In 2020-21 we committed £7.35 million for Parental Employment Support Fund (PESF), this included £5 million of core PESF funding and an additional £2.35 million to enhance the support available for young parents, disabled parents and individuals accessing funded ELC entitlement. We have now committed a further £5 million to support disabled parents, bringing total in year investment to £12.35 million, and cumulative investment to £14.45 million. We have also committed £27m for Fair Start Scotland in 2021-22 to support unemployed disabled people and those with additional barriers to move into fair and sustained work.

We continued to pursue our commitments across other areas of work where drivers of the gender pay gap prevail. Work has commenced at local authority level to train nurseries and settings to be gender friendly settings, including implementation of the 'Gender Equal Play' guide, published jointly by the Care Inspectorate and Zero Tolerance. Due to the COVID-19 pandemic and the need for the education system to adapt quickly and support education recover, the delivery date for several equality actions were postponed. We remain, however, fully committed to progressing this work in the coming year including the expansion of funded Early Learning and Childcare (ELC) in particular ensuring that staff, the majority of whom are women, are fairly remunerated. We will also pick up on work commenced to consider an approach that treats child and adult care as economic infrastructure.

I thank all of those who have shared our common aim of reducing the gender pay gap in Scotland, none more so than the members of the Gender Pay Gap Working Group for their continued involvement and commitment to this important agenda. It is imperative going forward that we act to redress the impact the pandemic has had on women in the economy, ensuring that women's economic position is improved, that they have equal access to skills and career opportunities that allow them to progress to senior decision making positions and thrive in the labour market and wider society. The work that we have and will continue to undertake will assist in achieving this goal.