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Fair work and better public services? The Social Partnership and Public Procurement Bill

Published 28/11/2022 | Reading Time minutes

The Social Partnership and Public Procurement (Wales) Bill aims to improve public services through “social partnership working, promoting fair work and socially responsible public procurement”. It was introduced into the Senedd in June 2022, and fulfils the Welsh Government’s Programme for Government commitment to develop legislative arrangements for social partnership.

Our article provides background information on the Bill, explains what it does, and sets out the key issues considered by Senedd Committees.

See our Bill Summary for more detail.

What does social partnership mean?

Social partnership is a long-standing element of social, political and economic systems across the world, and well-established in Wales. It’s been used to respond to situations such as the 2008 financial crisis and the COVID pandemic, as well as ongoing issues in devolved public services through the Workforce Partnership Council.

The International Labour Organization notes that social partnership:

Includes all types of negotiation, consultation or exchange of information between or among representatives of governments, employers and workers on issues of common interest relating to economic and social policy.

The Welsh Government has committed to making Wales a ‘fair work nation’. It established a Fair Work Commission, which made 48 recommendations to the Welsh Government on how to make progress towards this goal within the boundaries of devolution. The Commission defines fair work as where:

…workers are fairly rewarded, heard and represented, secure and able to progress in a healthy, inclusive environment where rights are respected.

The Welsh public sector spends around £7 billion per year on procuring goods and services. The Welsh Government defines socially responsible public procurement as “Taking action when purchasing goods, works and services, to improve economic, social, environmental and cultural well-being.”

What will the Bill do?

The Explanatory Memorandum says the Bill will:

Establish a statutory Social Partnership Council.
Place a statutory social partnership duty on certain public bodies requiring them to “seek consensus or compromise” with recognised trade unions when setting and delivering on well-being objectives.
Create a statutory social partnership duty on Welsh Ministers to consult through the Social Partnership Council when delivering on well-being objectives.
Amend the “A Prosperous Wales” goal in the Well-being of Future Generations Act 2015 (WFG Act) to replace “decent work” with “fair work”.
Require specified public bodies to consider socially responsible public procurement when carrying out public procurement; set procurement objectives in relation to well-being goals; and publish procurement strategies.
Require certain public bodies to carry out contract management duties so socially responsible outcomes are pursued through supply chains.
Place reporting duties on the Welsh Ministers and specified public bodies relating to the social partnership and socially responsible public procurement duties.

You can explore what each section of the Bill does using our interactive clause generator.

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Section 1

Section 1 establishes the Social Partnership Council and sets out its purpose.

Section 2

Section 2 sets out the membership structure of the Social Partnership Council.

Section 3

Section 3 defines “employer representatives” on the Social Partnership Council.

Section 4

Section 4 defines “worker representatives” on the Social Partnership Council.

Section 5

Section 5 sets out the process for nominating members to the Social Partnership Council.

Section 6

Section 6 outlines the duration of appointments to the Social Partnership Council.

Section 7

Section 7 covers the Social Partnership Council’s meetings, procedures and administrative support.

Section 8

Section 8 enables the Social Partnership Council to establish subgroups.

Section 9

Section 9 covers the establishment of a public procurement subgroup for the Social Partnership Council, and sets out requirements for its procedures.

Section 10

Section 10 sets out how the public procurement subgroup will provide information or advice to the Social Partnership Council.

Section 11

Section 11 allows the Social Partnership Council and its subgroups to meet remotely.

Section 12

Section 12 enables Welsh Ministers to meet expenses of worker representatives, employer representatives, and members of sub-groups.

Section 13

Section 13 provides the Social Partnership Council with supplementary powers to exercise its functions or the functions of its subgroups.

Section 14

Section 14 defines a number of terms in Part 1 of the Bill relating to the Social Partnership Council.

Section 15

Section 15 provides an overview of Part 2 of the Bill, and defines a number of terms relevant to that part of the Bill.

Section 16

Section 16 establishes a social partnership duty on specified public bodies when they are carrying out sustainable development.

Section 17

Section 17 establishes a social partnership duty on Welsh Ministers when making decisions of a strategic nature.

Section 18

Section 18 sets out requirements for specified public bodies in relation to preparing, agreeing and publishing reports on the social partnership duty in section 16.

Section 19

Section 19 sets out requirements for Welsh Ministers in relation to preparing, agreeing and publishing reports on the social partnership duty in section 17.

Section 20

Section 20 amends the Well-being of Future Generations (Wales) Act 2015 by substituting ‘fair work’ for ‘decent work’ within the “A prosperous Wales” well-being goal.

Section 21

Section 21 defines a “public contract” in Part 3 of the Bill.

Section 22

Section 22 defines a “contracting authority” in Part 3 of the Bill.

Section 23

Section 23 defines “public procurement” in relation to Part 3 of the Bill.

Section 24

Section 24 establishes a socially responsible public procurement duty for specified contracting authorities.

Section 25

Section 25 sets out actions that contracting authorities must take in relation to major construction contracts, and defines these contracts.

Section 26

Section 26 sets out actions that contracting authorities must take in relation to outsourcing services contracts, and defines these contracts.

Section 27

Section 27 requires Welsh Ministers to publish model social public works clauses for major construction contracts.

Section 28

Section 28 creates requirements for contracting authorities to ensure that social public works clauses are implemented when a contractor enters into a subcontract.

Section 29

Section 29 creates requirements for contracting authorities to notify Welsh Ministers if they are taking specific actions in relation to a major construction contract.

Section 30

Section 30 outlines how Welsh Ministers must respond to a notification received from a contracting authority under section 29(1).

Section 31

Section 31 requires Welsh Ministers to publish a statement if they take specific actions in relation to a major construction contract.

Section 32

Section 32 places a duty on Welsh Ministers to publish a code of practice about employment and pensions matters relating to outsourcing services contracts.

Section 33

Section 33 requires Welsh Ministers to publish model social public workforce clauses relating to outsourcing services contracts.

Section 34

Section 34 creates requirements for contracting authorities to ensure that social public workforce clauses are implemented when a contractor enters into a subcontract.

Section 35

Section 35 creates requirements for contracting authorities to notify Welsh Ministers if they are taking specific actions in relation to an outsourcing services contract.

Section 36

Section 36 outlines how Welsh Ministers must respond to a notification received from a contracting authority under section 35(1).

Section 37

Section 37 requires Welsh Ministers to publish a statement if they take specific actions in relation to an outsourcing services contract.

Section 38

Section 38 places a duty on contracting authorities to prepare procurement strategies setting out how they intend to carry out public procurement.

Section 39

Section 39 requires contracting authorities who have awarded prescribed contracts in a financial year to prepare and publish an annual report as soon as reasonably practicable after that year.

Section 40

Section 40 requires contracting authorities to create, maintain and publish a contracts register containing specific information.

Section 41

Section 41 gives Welsh Ministers powers to investigate how a contracting authority carries out procurement, and sets out how these investigations will be carried out.

Section 42

Section 42 requires Welsh Ministers to prepare an annual report on public procurement as soon as practically possible after the end of each financial year.

Section 43

Section 43 provides Welsh Ministers with powers to issue statutory guidance in relation to Part 3 of the Bill.

Section 44

Section 44 provides Welsh Ministers with powers to make regulations in relation to Part 3 of the Bill.

Section 45

Section 45 defines terms used in relation to part 3 of the Bill.

Section 46

Section 46 defines general terms used throughout the Bill.

Section 47

Section 47 makes a minor amendment to the Well-being of Future Generations (Wales) Act 2015 in relation to publishing revised well-being objectives.

Section 48

Section 48 gives Welsh Ministers the ability to determine when the Act comes into force, and allows them to bring different parts of the Act into force at different times.

Section 49

Section 49 sets out the short title of the Act, the Social Partnership and Public Procurement (Wales) Act 2023.

The majority of Members of the Senedd’s Equality and Social Justice (ESJ) Committee supported the general principles of the Bill. However, the Institute of Welsh Affairs called for greater focus on the outcomes that can be achieved via the Bill, such as pay, working conditions and public services. The Committee wants the Welsh Government to urgently work with social partners to agree tangible outcomes to work towards, and how to measure these.

How will the Bill help deliver impactful social partnership and fair work?

Different countries take different approaches to implementing social partnership. Some countries such as Denmark and the Netherlands have legislated to underpin social partnership arrangements, while others like Sweden and Austria have taken more informal approaches.

The Federation of Small Businesses Wales was concerned about whether a legislative approach to social partnership would allow the necessary flexibility to respond to evolving situations. However, Nisreen Mansour from the Wales Trades Union Congress felt that legislation would deliver a more consistent approach, saying that:

…we're just not sure how you would ever get to that point of having this whole kind of social partnership system, kind of led by a council, but also being supported by what's happening in our public bodies at a local level, without that legislation to bring about that very coherent and consistent approach.

Business organisations and trade unions both highlighted the positive impact of the Shadow Social Partnership Council during the acute phase of the pandemic. Paul Slevin from Chambers Wales said that this was due to “a strong focal point, a strong agenda and the right people around the table to deliver the right results”. However, he also noted there wasn’t so much focus after this.

To maximise potential benefits, the ESJ Committee recommended that the Welsh Government develop focussed terms of reference for the Social Partnership Council, and that it should publish any work undertaken to evaluate the Shadow Council.

As highlighted by Professor Alan Felstead, the fair work provisions in the Bill are different to those included in the draft Bill. The Deputy Minister for Social Partnership, Hannah Blythyn MS, said that the revised approach of using the WFG Act “better reflects our belief that promoting fair work can support the link between individual and collective well-being”.

However, when setting well-being objectives, public bodies have focussed more on economic growth and employment than the quality of work. The Deputy Future Generations Commissioner, Marie Brousseau-Navarro, highlighted analysis showing that just two bodies have included objectives related to fair work so far. The ESJ Committee called for the Welsh Government to produce guidance to support more public bodies to set fair work-related well-being objectives in the future.

What challenges need to be overcome to achieve procurement objectives?

Over recent years, reviews by Audit Wales and the Future Generations Commissioner have outlined ways that public procurement policy and implementation could be improved. Contract management was seen by the procurement specialist Liz Lucas as a key concern, as it “isn’t something that’s done well right across Wales”.

Public sector bodies expect to face challenges implementing the procurement aspects of the Bill. The Welsh Local Government Association commented that there is “a real issue with capacity” within local authorities, and the North Wales Fire and Rescue Service stated that procurement managers are “like hen’s teeth”, causing recruitment difficulties. The ESJ Committee wants to see the Welsh Government providing a stronger lead on “capacity, capability and collaboration” to meet these challenges.

Business organisations called for targets to be put in place to maximise the impact of the Bill’s procurement elements. The Institute of Directors Wales commented that procurement is “one of the greatest levers we have to make a huge change in people’s lives”, and increasing the percentage of procurement spent with Welsh businesses from the current figure of 52% is key. The ESJ Committee would like the Bill to be amended at Stage 2 to require Welsh Ministers to set procurement targets once data collection issues are addressed.

What’s next?

The general principles of the Bill will be debated in the Senedd on 29 November, which you can watch on Senedd TV. If Members agree the general principles of the Bill, it progresses to Stage 2 of the legislative process, the amending stage in committee.

Article by Gareth Thomas, Senedd Research, Welsh Parliament

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