Funding follows the child and the national standard for early learning and childcare providers: transition options guidance on contracting

Annex A: Implementing the Real Living Wage Commitment

Box 2: CRITERIA 8 – Fair Work Practices, including Payment of the Real Living Wage

Settings, including childminders where workers are regularly employed to provide direct care to children, who agree to deliver the funded entitlement will, in accordance with the supporting guidance on Transition Options, pay the real Living Wage to all childcare workers delivering the funded entitlement and commit to adopting and demonstrating Fair Work practices in their setting. In committing to Fair Work practices, settings must take into account:

• a fair and equal pay policy across their setting (including a commitment to supporting the real Living Wage);
• ELC managers/lead practitioners/employers (in the case of childminders who employ staff) have clear managerial responsibilities to nurture talent and help individuals fulfil their potential;
• promoting equality of opportunity and developing a workforce which reflects the population of Scotland in terms of characteristics such as age, gender, religion or belief, race, sexual orientation and disability;
• security of employment and hours of work, avoiding exploitative employment practices such as unfair zero hours contracts, or pregnancy and maternity discrimination;
• consideration of patterns of working (including, for example, part-time working and/or term-time working) and support for family friendly working and wider work life balance; and,
• support progressive workforce engagement, including trade union membership or alternative arrangements, to give staff an effective voice, for example, through regular staff meetings, where possible.

51. The National Standard includes criteria regarding the real Living Wage and Fair Work Practices (see Box 2). This criteria needs to be included in the process used by local authorities to contract with ELC providers.

A.1: The real Living Wage

52. A private and third sector providers’ proposed package of Fair Work Practices would be expected to include fair and equal pay, including a commitment to supporting the real Living Wage. The Scottish Government considers the payment of the real Living Wage to be a significant indicator of how a provider of ELC funded provision is committed to Fair Work practices.

53. To support this, the Scottish Government and COSLA agreed a multi-year funding package which includes funding to enable the payment of sustainable rates to funded providers delivering the funded entitlement – including funding to enable payment of at least the real Living Wage to all childcare workers delivering the funded entitlement.

54. The Scottish Government has developed information sheets on both the real Living Wage and Fair Work Practices.

55. Statutory Guidance has been published, which public bodies must have regard to when addressing Fair Work practices, including the real Living Wage, when selecting tenderers and awarding contracts.

A.2: Can Fair Work Practices be evaluated in a contract for ELC services?

56. Fair Work Practices are particularly relevant where the quality of the service being delivered is directly affected by the quality of the workforce engaged in the contract. It is possible, therefore, to take account of a private and third sector provider’s approach to Fair Work practices. In addition, the Scottish Government considers the payment of the real Living Wage to be a significant indicator of a provider’s commitment to Fair Work practices and that payment of the real Living Wage is one of the clearest ways to demonstrate that it takes a positive approach to its workforce.

A.3: How can the local authority make this commitment clear?

Pre-contract notification

57. Funded providers can be notified of this commitment along with other aspects of the National Standard in the Contract Notice. An example statement for a Contract Notice or Prior Information Notice, is shown below:

“Section of Contract Notice: (VI.3) Additional Information

“[the organisation] is committed to ensuring delivery of high quality early learning and childcare services and to achieving best value. Fair Work practices, including payment of the real Living Wage, are particularly relevant to the delivery of quality early learning and childcare services, as the service is directly affected by the quality of the workforce engaged in the service. Payment of the real Living Wage will be viewed by the local authority as a key indicator of ‘Criteria 8 – Fair Work Practices, including Payment of the real Living Wage’ being met.””

Terms and conditions

58. Within the terms and conditions the local authority will also highlight that in accepting the sustainable rate, a provider acknowledges that an element of this rate reflects an expectation that there is payment of at least the real Living Wage to all childcare workers delivering the funded hours.

Requesting evidence

59. The single most important driver of the quality of a child’s ELC experience is a high quality workforce. The promotion of fair work practices, including payment of at least the real Living Wage, is a key way of supporting a high quality workforce, and forms a key part of the National Standard. As with all aspects of the National Standard, evidence must be sought from the provider to demonstrate how the criteria is being met. If the provider does not provide sufficient evidence to the local authority that this criteria is met, the local authority may not contract with the provider.

60. Providers should be asked to provide evidence of Fair Work practices in their setting(s), in line with the National Standard criteria. Evidence may include (but not limited to):

• Policy documents;
• Induction documentation;
• Ongoing training and development information/examples;
• Director/owner statement on rates of pay;
• Terms and conditions of employment contracts.

OR

• A qualitative response from the private or third sector provider to a set question on Fair Work practices.

61. Fair Work practices, including payment of the real Living Wage, are relevant to the delivery of high quality ELC settings, as the service is directly affected by the quality of the workforce engaged in the service. For the avoidance of doubt, being unable to provide evidence of paying the real Living Wage will not necessarily cause a provider to be excluded from the process, however, payment of the real Living Wage will be viewed by the local authority as a key indicator as to whether Criteria 8 – Fair Work Practices, including Payment of the real Living Wage is being met.

62. A local authority may request that the provider evidences how the commitment will be met, including signing up to a commitment or action plan to deliver this commitment during the term of their contract as a funded provider.

A.4: How can a local authority review the evidence requested?

Size and status of providers

63. It is important to treat all applications equally and not to discriminate based on size or status. This includes taking into account the relative differences in a provider’s approach when evaluating responses.

64. It may not be proportionate for small (<50 employees) and micro businesses (<10 employees), or small third sector providers to have teams of staff in place who are responsible for processes, procedures and controls to enforce their stated policies on promoting Fair Work practices. Such settings may, however, be able to offer different approaches to give staff an effective voice given the nature of relationships that will exist due to their size.

65. Third sector providers may take a different approach to the Fair Work Practices they offer, taking account of the resource constraints under which they operate, and may not be able to commit resources to longer term investments in workforce practices.

Evaluators

66. Evaluators of the criteria (whether procurement, ELC or other members of local authority staff) should be briefed on what is expected of private and third sector providers when assessing this criteria.

67. For example, the local authority may have training on Fair Work practices as this is often used in other procurement exercises. An example checklist for an evaluator considering Fair Work practices is available for local authorities to consider when deciding on the process for contracting with funded providers.

68. The Scottish Government has also provided guidance that indicates good answers to Fair Work Practice questions and includes an example within a ‘Care Service Contract’ which is also relevant to ELC contracts.

69. When a local authority is considering applications from potential funded providers and the supporting evidence which accompanies it, they must take into account the complete package of Fair Work Practices a provider offers and the impact those practices can have on the way the ELC provision is delivered in a way that demonstrates that the National Standard criteria are being met.

70. Individual elements of a package of Fair Work practices must not be considered or evaluated separately.

71. Where evaluators are unsure or unassured regarding the evidence given, clarification may be sought from the potential funded provider, in line with relevant local authority requirements and applicable regulations and/or from relevant members of staff, such as procurement colleagues.