Introducing Fair Work through ‘Soft’ Regulation in Outsourced Public Service Networks: Explaining Unintended Outcomes in the Implementation of the Scottish Living Wage Policy

Abstract Using a regulatory analysis from Martinez Lucio and Mackenzie (2014 and 2016), this study contributes to debates concerning the capacity of ‘soft’ regulation to advance employment conditions and outcomes. This study explores the implementation of a real living wage policy for employees in outsourced Scottish social care. Despite employer compliance in implementing the living wage, it had a mixed impact on the income of workers and did not improve staff recruitment and retention. The theoretical framework challenges recent optimistic views concerning the impact of such regulation by revealing unintended and problematic consequences, such as problems with differentials and providers walking away from contracts. It further reveals how actor roles, interests, power resources and inter-relationships, as well as surrounding structural contextual influences (austerity, marketisation and engrained values and processes in political settlements), interacted to shape these outcomes. Insights from this study include that ‘soft’ regulation was unable to create conditions for actors such as trade unions, employers and non-governmental organisations to colonise or seize the regulatory space to secure the full benefits of the Scottish Living Wage. The political settlement with the Scottish Government allowed local authorities to retain coercive control over other actors in the regulatory space. Employers and trade unions were further hindered by lack of unity and continued isolation from decisions, respectively. Surrounding economic and ideological restrictions imposed by the central UK government’s austerity agenda, and the retention of powers over employment regulation added to the failure of these ‘soft’ measures to increase pay and improve recruitment and retention in social care.