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john park.llls @scottish. parliament. ukDate 30 November 2012Your RefOur Ref IC/jII03122012

Enquiries to Jan LyellDirect Line 01312756449Email jlyell@nhs.net

Dear Mr Park

Consultation on the Living Wage (Scotland) Bill

National

Services

Scotland

Thank you for giving NHS National Services Scotland (NSS) the opportunity to comment on the Living

Wage (Scotland) Bill.

Our responses to the consultation questions are as follows:

QUESTION 1: Do you support the general aims of the proposed Bill? Please indicate

"yes/noltmdecided" and explain the reasons for your response.

Undecided The principles of extending a living wage at a social level are immutable; however there

are real ciifficulties in the proposed use of public contracts as the vehicle for delivery. Principally, any

imposition of additional requirements as a requirement of a public procurement process or publiccontract lllay represent a restriction on suppliers' freedom to provide services guaranteed by Article

56 of the Treaty on the Functioning of the European Union.

QUESTION 2: Do you envisage any issues for public sector bodies when including the Living

Wage as a contract performclllce condition of a contract? Please explain the reasons for your

answer.

Yes. As < : 1 performance requirement a link to the minimum wage can be allowed, anything more than

this would be open to challenge, as above. An encouragement linked to performance would be

possible but not enforceable, or could it be used as means to differentiate in relation to the

assessment of bids.

QUESTION 3: What do you consider will be the advantages or disadvantages for employers

and employees if public sector performance clauses stipulate the payment of the Living

Wage?

There would be little advantages if public sector contracts differed from private secor contracts.

Employers would have duplicate wage systems for the same employees. and in cases where

employees were providing services across a number of contract areas, (very cornman in for example

facilities and maintenance contracts) they could face different wage rates for different tasks.

Chairman Bill MatthewsChief Execulive Ian Crichton

NfI\ I

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Employer costs would be higher for public sector contracts in comparison with equivalent private

sector areas. To rnaintain profit margins the total costs could also be higher. A large number of

contracts are open to UI

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It would /lot, however, alter the fact that individual employers are responsible for determining wagestructures (provided they comply with the National Minimum Wage Act 1998); it is for them to consider

the impact on their competitiveness and to decide if payment of the living wage is sustainable within

their organisations. It is therefore not possible to use the Bill to mandate payment of the living wagethroug h procurement activity.

If you would like clarification on any of the comments made, please contact Mr Colin Sinclair, Directorof NatioCleliProcurement on 01698 794460. .

Yours sincerely

IAN C ICHTON

Chief Executive

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