Guidance to Local Authorities on Contracting

Council Contracts s52 Guidance Guidance to Local Authorities on Contracting

This guidance was finalised in 2006 but recent developments in local council outsourcing, including the use of arms length companies and care contracts, has highlighted the importance of these provisions.

Scope

This statutory guidance applies only to Scottish local authorities (including joint fire and police boards) and to any exercise which involves the consideration of a change of service provider or where the transfer of local authority staff is at issue.

This includes any proposal that has the 'potential' to include a staff transfer from a local authority. In addition the phrase 'change of service provider' can also incorporate services that are already outsourced but have been awarded to a new supplier. A typical example of this might be services provided by the voluntary sector under a contract with the local authority.

It can also cover contracts awarded by public bodies who are not local authorities if the contract still involves the transfer of local authority staff.

Involvement & Consultation

This guidance is similar to the provisions of the PPP Staffing Protocol that introduced important procedures for the involvement and consultation with recognised trade unions.

Trade unions should be involved "at the earliest stages of a review process". This means before the council has made a decision about which procurement path to follow. Branches should use this opportunity to ensure in-house options are adopted in accordance with UNISON guidance.

If outsourcing is adopted this involvement extends to any selection process and requires "full disclosure of information on all matters affecting the workforce". The guidance makes it clear that openness is the default approach and spurious use of 'commercial confidentiality' is not an excuse for not disclosing. Potential contractors should be advised of this at the outset and a list of relevant information is set out in the guidance.

Branches should be members of any panel or board established to consider procurement options and award the contract. Again detailed UNISON guidance is available on how to make best use of this provision.

Two Tier Workforce

The primary aim of this statutory guidance is to ensure "that the terms and conditions of service of new employees appointed by contractors to their workforces post-transfer, should be such as to eliminate the scope for the creation of so-called "two–tier" workforces".

This means new starters or existing contractor staff allocated to a contract, should be employed on terms and conditions "which are no less favourable overall to those of transferred employees". The intention is that contractors and unions should agree the package of terms and conditions.

This includes pensions and the service provider has to offer new recruits a 'broadly comparable' pension to the originally transferred staff. This is will normally be achieved by Admitted Body Status to the LGPS.

TUPE +

When staff transfer they will normally be covered by TUPE. Even if TUPE does not apply in strict legal terms the principles of TUPE will apply for contracts covered by this guidance.

This should be made clear to potential contractors and that employees should be able to maintain broadly comparable pensions at the outset of the contract.

Monitoring & Enforcement

This is statutory guidance and local authorities are under a duty to have regard to it when entering into a contract. This means the provisions should be included in any contract within scope of the guidance. Failure to do so could be regarded as a breach of the statutory Best Value duty under s2 of the Local Government in Scotland Act 2003 and therefore covered by the enforcement regime under that Act.

The guidance sets out a procedure for resolving disputes over staffing issues covered by the guidance with an Alternative Dispute Procedure (ADR) as the last resort.

The application of the guidance should be monitored as part of the normal contract management process.

Review

The guidance is subject to regular review by the Scottish Government in consultation with the STUC. We are current in such a review and UNISON has identified a number of concerns. The primary difficulty appears to be a lack of awareness of the guidance by local authorities that has led to a number of contracts not incorporating the provisions. This is not helped by the absence of information on Scottish Government procurement website!

Further Information

The full guidance can be viewed at the UNISON Scotland website together with P&I 177 on externalisation. This also includes the UNISON Scotland guide to the PPP Protocol.

http://www.unison-scotland.org.uk/briefings/pppprotocol.html

The UK Positively Public campaign pages has a number of useful resources http://www.unison.org.uk/positivelypublic/index.asp

The Bargaining Information System (BIS) has information on contractors.

http://www.unison.org.uk/bargaining/bis02.asp?did=5358

Contacts:

www.unison-scotland.org.uk