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Will the minister take an intervention?

If amendment 72, in the name of Miles Briggs, passes, I will not move amendment 75.

On the minister’s point that the specific conditions around clawback should be set out in the contracts between the SFC and the provider, I would like to ask the Government why that has not been happening. My understanding is that the SFC has never clawed money back and there probably have been occasions when there have been breaches of fair work practices. I am not aware of the SFC using the powers that it already has.

I have some sympathy with what the member is trying to achieve, but I have a slight issue with the wording in amendment 27, so I wonder whether he could explain it. Believe it or not, buried deep down within me is a bit of a liberal, and that liberal is a bit uncomfortable at the mention of “behaviours in the workplace”. Although we indeed expect all staff in a workplace to behave to a certain standard, I am a bit uncomfortable putting it into legislation that that is part of what we require of apprentices. It just feels a bit too specific to me, and I wonder whether Willie Rennie could elaborate a little more on what is meant by that, because I feel that we are getting into very intrusive territory when we specify the behaviours of individuals.

That will depend in part on the minister’s response. If I were to move amendment 51 and it were to be agreed to, I would be open to changing the percentage at stage 3. Equally, if the minister is agreeable to the principle of what I am getting at with the amendment, which is that the responsibility for setting the cap should sit with ministers and that there should be a role for Parliament—because the cap would be set via regulations—I would be happy not to move the amendment and to come back and hopefully achieve something by consensus at stage 3. I am looking for agreement from the Government on the core principle of the amendment.

I turn to higher education. Amendment 54 would set, as a condition of funding, a requirement that the governing body of a higher education institution consists of a majority of members who are elected or chosen by the staff and students. On the reasons for this proposal, it is easiest to quote the University and College Union Scotland, which worked with me to bring it forward. It said:

“In our view, the requirement for a lay majority leads to an over-representation of business or retired business voices on courts, which hasn’t been to the benefit of universities. Failings in Dundee are down in large part to senior management not being sufficiently challenged by court. In our view, notwithstanding the individuals, the best people to offer robust challenge when it is needed are those most invested in the success of the university, which is primarily its staff and students.”

The amendment covers similar ground in principle to the debate that we had recently in relation to the boards of the Scottish Qualifications Authority and Qualifications Scotland, for which amendments in this space were agreed to. University courts often do not have the right balance of expertise and institutional knowledge that is required to provide robust governance. External expertise is useful, but having those who are most intimately familiar with the institution and most able to offer detailed and robust scrutiny is important. Therefore, I propose that we ensure that a majority of court members are chosen by the staff and students of the institution.

Amendment 55 would set as a condition of funding that further and higher education institutions

“operate in a way which is transparent and accountable.”

It would put that general requirement on universities and colleges to encourage them to be more open, in particular about decisions that are taken at a senior management level. Amendment 55 is very similar to amendments to the Education (Scotland) Bill that we agreed to, so I hope that it will also be agreeable to members.

Amendment 61 is a base amendment on which amendments 61A to 61E all rely. It would provide for a new section to be added to the 2005 act that would require ministers to

“impose terms and conditions for the purposes of encouraging fair work practices by those who are in receipt of funding from”

the SFC.

Will the member take an intervention?

There is certainly a careful balance to be struck. Employment law is reserved—I will come to that issue specifically later on—but this is a question of how public money is to be spent and the conditions that we attach to it.

The Scottish Government does not have the power to set the real living wage in Scotland, but it has very successfully set a condition that any business in receipt of a Government grant or contract must pay at least the real living wage. That is an example of how, although we are not able to set wage levels across the board, we are able to attach conditions that fall within the scope of devolved powers when it comes to how public money that is provided by the Scottish Government—in this case, through the SFC—is spent. That example is a case study from the past four years of what we have done in relation to the real living wage.

Through some of my amendments in this group, I am specifically trying to improve industrial relations. I think that we would all agree that colleges’ ability to play the critical role that they could play in our economy is being held back by a decade of industrial action and the chronic problem of poor industrial relations. In a lot of cases, the working conditions in universities are even worse. For example, graduate teaching assistants often tell us about the struggle of being on zero-hours contracts, or of having huge workload pressures that require so much unpaid overtime that, in some institutions, they are in effect working for less than the hourly minimum wage.

Colleges and universities receive billions of pounds of public money, and that gives us a responsibility to act. We can use the funding that we provide to drive up conditions in both those sectors.

I will go on to the specifics of the rest of my amendments. Amendment 61A would introduce a 10:1 pay ratio as a condition of funding, so that anyone who is employed by a fundable body must be paid at a rate that is no less than one tenth of the salary of the highest-paid employee, on a full-time-equivalent basis.

That argument always interests me. In ballpark terms, if we think about the salary of the lowest-paid employees and multiply that by 10, I find it hard to envisage that we would be unable to attract people of a sufficient calibre if we offered them salaries in the region of a quarter of a million pounds—somewhere between £200,000 and £250,000—which is roughly 10 times the salary of the lowest-paid employees, on an FTE basis.

What I am getting at is shown in the example of one principal who was before the committee recently and whose salary is in excess of £420,000. Indeed, his remuneration package is so big that he could not tell the committee accurately how much he is paid. I do not accept that we would not be able to attract people of sufficient quality if the institutions offered salaries in the region of £250,000.

Linking principals’ salaries to those of paid employees does not make it impossible to increase a principal’s salary further, but it means that those who are at the very bottom would also need to see their salaries increase. Amendment 61A does not therefore seek to cap salaries as an absolute; it would cap them relative to the salaries of the lowest-paid staff and provide an incentive to push their wages up.

I will come on to the specific detail of that in a moment, but I have drawn that distinction in respect of my proposal about senior management pay in colleges being folded into the public sector chief executive pay framework. I am not proposing that for universities for precisely the reason that Mr Rennie has outlined. We already set conditions on the funding that we provide to those institutions, so it is a question of how far we can go before compromising ONS classification.

I have drawn the line at the 10:1 pay ratio, which I think is appropriate in the case of universities. It would not be appropriate to draw them into the chief executive pay framework because that is for public sector chief executives. Universities are largely publicly funded, but they are not public bodies in the same way that colleges are, which is why I proposed that college principals should be brought into the chief executive pay framework. That is where I draw that particular line, although I recognise that it is up for debate.

I recognise the time that I am taking, convener. I will try to rattle through the rest of the amendments.

Amendment 61B would set a condition of eliminating the use of zero-hours contracts. The Government's fair work criteria refers to ending the inappropriate use of zero-hours contracts, but I cannot see any evidence of action being taken to achieve that, despite it being a Government policy objective. I am also not sure what appropriate zero-hours contracts would look like, as opposed to inappropriate zero-hours contracts, and I have not heard the Government elaborate on that. Again, if the minister can articulate what the Government is doing to reduce the use of inappropriate zero-hours contracts, I would be open to hearing that. However, I have pressed the Government and the SFC on that in the past and no one has ever provided me with any evidence of action having been taken.

Amendment 61C would provide for the payment of at least the real living wage for all employees of funded institutions. There is a pretty simple argument behind that: everybody deserves a wage that they can live off and one that is enough to pay their bills. Public bodies such as colleges and institutions that are in receipt of a huge amount of public funding, such as universities, should lead by example when it comes to a liveable wage for their staff.

The national minimum wage is not a liveable wage. As it stands, the real living wage is a little bit higher than the national minimum wage, but it is not defined in law. It is a concept that we are all familiar with, but it is not fully defined in law. I am therefore trying to come up with some legal language that gets to the point of saying that it should be sufficient for people to live above the poverty line. That is the real living wage, but if I was to put “real living wage” into the amendment, it would not mean anything. We are familiar with the concept, but it has no statutory underpinning.

I am sympathetic to the argument that Willie Rennie is making on having an independent body. Does he think that it would be necessary to have that body as well as the apprenticeship committee that the bill would set up? I am worried about having both those bodies in existence at the same time. I wonder whether there is another way to do it that would make the committee that the bill would establish more independent from the SFC and the Government, rather than setting up a body that, in many ways, would potentially duplicate the work of the body that is already set out in the bill.