Before the general election Labour published details of its employment-related plans in 'Labour's Plan to Make Work Pay: Delivering a New Deal for Working People'. It then explicitly referred to the New Deal in its manifesto and committed to introducing the package of about 75 measures once in government. The proposals range from protection against unfair dismissal from day one, restrictions on the use of exploitative zero hours contracts to mandating social value in contract design and bringing about the biggest wave of insourcing.
Public sector in-sourcing
The government has pledged that it "will learn the lessons from the collapse of Carillion and bring about the biggest wave of insourcing of public services in a generation".
It also commits to extending the Freedom of Information Act so that it applies to private companies that hold contracts to provide public services, exclusively in relation to information relevant to those contracts. The aim behind this is to ensure that any outsourced services are transparent and accountable.
The government intends to scrutinise public services that have been outsourced as part of a drive to improve quality, design and better services. It states that this will "meet changing needs, ensure greater stability and longer-term investment in the workforce, and deliver better value for money". Where it is relevant, the government will work with local government to use the sector's procurement experience and expertise.
Public interest test
The government has proposed that public bodies will have to carry out a quick and proportionate public interest test when contracts expire, or are broken through a failure to deliver, in order to consider whether the work could be done more effectively in-house. This test will evaluate "value for money, impact on service quality and economic and social value goals". The government has also pledged to reinstate and strengthen the last Labour government's two-tier code. The scope of this code and the public interest test will apply to wholly owned subsidiary companies.
Reintroduction of the two tier code
What was the two-tier code? In 2010, the government withdrew the Code of Practice on Workforce Matters in Public Service Contacts, otherwise known as the two-tier workforce code, and in March 2011 the Code of Practice on Workforce Matters in Local Authority Service followed suit. The Codes covered the approach to be taken in public sector service contracts and contracts involving local authority services which involved the transfer of staff from the public sector/local authority to the service provider, or where such staff were transferred to a new service provider as a result of a retender. One of the effects of the Code was that the terms and conditions of new employees hired to work alongside employees who had transferred over from the public sector/local authority had to be "no less favourable overall" than the terms and conditions of the ex-public-sector employees. The aim of the Codes was to avoid a "two-tier" workforce with transferred employees on better contractual terms than new recruits. The government plans to reintroduce a version of the two-tier code.
Social value
The government has promised to set out a National Procurement Plan which will ensure that social value is mandatory in contract design. In doing this, the government "will value organisations that create local jobs, skills and wealth and treat their workers well and equally, including on matters such as pay, conditions, trade union access, recognition and provision for collective bargaining arrangements, effective equality policies, adherence to high environmental standards and tax compliance".
An emphasis is placed on trade union recognition and access and the consideration that will be given to this as part of the process of awarding public contracts. Other factors that demonstrate the tenderer's commitment to good jobs will also be valued. The purpose of this is to help drive up employment standards across the economy and to strengthen supply chains.
The New Deal also refers to a Procurement Bill which will give the government the powers to implement their new principles of procurement through guidance. In doing this they will learn from the Social Partnership and Public Procurement (Wales) Act, which was pioneered by the Labour government. The Act provides a framework to promote the well-being of the people of Wales by enhancing sustainable development (including by improving public services) through social partnership working, promoting fair work and socially responsible procurement.
New Fair Work Standard
Finally, the government refers to its New Fair Work Standard which will ensure that the best employers get the recognition that they deserve. This Standard will be created and upheld by a new Social Value Council (the concept of this Council is inspired by the Wales Social Partnership Council) which will be made up of public, employers and trade union representatives. The Council will review how social value can be better strengthened and delivered in public contracts.
When will these proposals happen?
The short answer is that we don't yet know. The government has committed to delivering its New Deal for Working People in full, but we won't have a definite timeframe. There was no mention of (another!) Procurement Bill in the King's Speech, so it looks like that's a longer-term project. For the moment then, it's a matter of wait and see.
