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Businesswoman leading business presentation

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.

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