WIREDGOV

An independent evaluation of the Scottish Government's Fair Work First conditionality policy, seeking to understand whether the policy has been delivered as intended.

Introduction

Fair Work policy context

Fair Work Framework, vision and action plan

In 2016, the Fair Work Convention – the independent body that advises Scottish Ministers on Fair Work – published the Fair Work Framework. The Framework defined Fair Work as work that offers effective voice, opportunity, security, fulfilment and respect; that balances the rights and responsibilities of employers and workers; and that can generate benefits for individuals, organisations and society.

At the time of commissioning this evaluation, the Fair Work Convention’s vision for Fair Work was for Scotland to be a leading Fair Work Nation by 2025 “where fair work drives success, wellbeing and prosperity for individuals, businesses, organisations and society”.

The Scottish Government shared in the Fair Work Convention’s vision, with its fair and inclusive workplaces policy defining fair work as “secure employment with fair pay and conditions, where workers are heard and represented, treated with respect and have opportunities to progress”.

The Scottish Government’s Fair Work Action Plan subsequently brought together Fair Work, Gender Pay Gap, and Disabled People's Employment action plans, along with its Anti-Racist Employment Strategy – A Fairer Scotland for All. Together, the Action Plan and Strategy seek to address structural barriers and systems that create unequal conditions and opportunities for one group of people over another, and eradicate systemic racism, disablism, sexism, and ageism which are still a real experience for many people.

Scotland’s performance as a fair work nation

In its November 2025 report, Measuring Scotland’s performance as a Leading Fair Work Nation, (which measures Scotland’s performance against comparator countries), the Fair Work Convention observed that whilst unlikely that Scotland would meet its aspiration to be leading on every indicator by 2025, Scotland had made measurable progress on improving fair work, particularly when considered over the ten-year life of its fair work agenda. It showed that, since 2016, Scotland had improved in 11 of 14 indicators, with particularly positive performance in key areas such as reducing gender economic inactivity gaps, reducing workplace injuries and tackling low pay.

Identified ongoing challenges include unemployment for young people (where Scotland’s performance is dropping), the disability employment gap where more progress is needed to meet the Scottish Government’s target, and on collective bargaining where Scotland lags significantly behind the leading nations.

Wider economic context

Over the past six years, and in common with the rest of the UK and other developed economies, Scotland has experienced major inflationary pressures. These were driven first by the COVID-19 pandemic and then by the energy shock resulting from the war in Ukraine.

The Scottish Government’s economy briefs, bulletins and insights illustrate that businesses reported significant input cost pressures, particularly from energy and labour costs, while inflation rose sharply in 2022-2023 driven by energy and supply‑chain disruptions linked to global events. As observed in the Scottish economic bulletin: February 2026, labour costs have continued to be a key cost pressure for Scottish businesses, contributing to reduced staffing levels and margin pressures.

Business labour cost pressures have also been influenced by factors including rises in both the National Minimum Wage (NMW) and the real Living Wage, latterly which have risen by 45.8% and 41.6% respectively between 2020 and 2026, coupled with the increase in employer National Insurance Contributions (NICs) in April 2025.

These factors demonstrate the challenging economic environment into which the Fair Work First policy has been introduced, which may be a contributing factor to particular challenges identified by employers in the course of this evaluation.

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