There is growing speculation that the Government will scrap the Best Value Workforce Code. This places a statutory duty on local authorities to ensure that workforce issues are addressed in procurements and contracted services. It has been applied to the wider public sector since it was originally introduced into local government.
Is this a wise move? I think not!
Why was it introduced by the New Labour Government? The answer was to avoid procurement races to the bottom of the employment pit – the lowest pay; the least good conditions; and a de-motivated workforce. Government, trade unions and many contractors recognised that these are not the conditions for successful business or the delivery of quality services.
The Code places the statutory responsibility to comply on the contracting public body, which should place a relevant contractual obligation on the provider. Compliance is not and does not have to be the straitjacket that some argue it is. The Code allows employers to vary terms and conditions for new recruits to suit local circumstances provided that they are 'no less favourable overall. And whilst it requires some minimum pension entitlement for all employees delivering public services, it does not demand that new recruits be in a necessarily public sector pension scheme or even one similar.
These are important safeguards. Previously, especially during the era of Compulsory Competitive Competition (CCT) when contracts were let simply on price, bidders and providers all too often slashed employees' terms and conditions; and sometimes forced staff with TUPE protected rights out of their jobs to make way for lower skilled and cheaper replacements. This is not a sensible environment in which to manage public services; and certainly not to reform them. The consequences were that moral fell; skills were diminished; turnover increased leading to poorer value for money for the service user/citizen; and conflict displaced partnership working between staff and employers - and between contractors and their clients.
The Code also requires some engagement with staff and their trade unions during the procurement process – as one would expect during any major change programme in the private or public sectors. Good contractors always wish to engage with staff and their trade unions at the earliest opportunity in the'procurement process and certainly not only once the contract has been let.
Recent conversations suggest that many major contractors in the private and third sectors are not beating at the Government’s door demanding that the Code be scrapped. No evidence has been produced to suggest that it is an impediment to effective procurement and/or service delivery even where the objectives are to reduce costs significantly, enhance productivity and/or to engineer major service redesign. Contractors from the public, private and third sectors should win work on the basis of their proposed solution; their ability to improve outcomes and productivity; their commitment to their employees, including both those who join through TUPE and those subsequently recruited; and not on the basis of who can 'screw'the staff the most. This is not a call for the status quo or for avoidance of change. Far from it!
Given the demands and expectations of the public in respect of the services that they use and the impending public expenditure cuts there is undoubtedly a need to redesign many public services and to reduce costs whilst improving outcomes. The Code does not have to be a barrier to such change. Experience and evidence across the public and private sectors demonstrates that the most effective service redesign requires the full an engagement of an involved and motivated staff. The Code should enable proper early dialogue. What could be worse than excluding staff and their unions at times of critical change - and one as traumatic as potential transfer to another employer in a different sector?
The Code would seem to be working well and the fact that the alternative disputes resolution process for the Code has been only invoked a few times in either central or local government contracting projects is testimony to the pragmatic approach that procuring clients, unions and contractors have adopted towards the Code. It builds on the EU originated TUPE regulations and adds extra protection and the foundation for serious and much needed reform of public services.
If the Government is minded to look at the Code it would be better to review it with the key stakeholders from the business and third sectors, the trade unions and the public agencies that actually undertake procurement. If there are issues these could be discussed and potentially negotiated but if the Code is arbitrarily abolished there is a real risk that some public bodies will simply ignore any consideration of the workforce when contracting and that some providers from the private and third sectors will seek to boost profits and/or lower costs unfairly and unreasonably at the expense of the workforce. It will send a signal to the public service markets that they are open for 'bargain basement shopping'. This would be a retrograde step.
There should be common cause between progressive and responsible contractors, trade unions and public sector clients in calling on the Government not to hastily rush into abolition.
John Tizard is the director of the Centre for Public Service Partnerships
