The Public Service Workforce Consultation on draft guidance and directions which include a Code of Practice on Workforce Matters

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1 Number: WG19332 Wales TUC response to: Welsh Government Consultation Document on The Public Service Workforce Consultation on draft guidance and directions which include a Code of Practice on Workforce Matters Date of issue: 26 September 2013 Action required: Responses by 20 December 2013 Date of submission: 20 December 2013 Wales TUC Cymru 1 Cathedral Road Cardiff CF11 9SD Tel/Ffon: /Ebost: wtuc@tuc.org.uk 1

2 INTRODUCTION 1. The Wales TUC welcomes the publication of the Welsh Government s Consultation on draft guidance and directions which include a Code of Practice on Workforce Matters. 2. We are an organisation that represents over 420,000 workers in Wales through our affiliated trade unions. Those Trades Unions have come together to produce a joint response to this consultation exercise. The joint response demonstrates the importance that we place upon this consultation and recognises the impact it could have on the public sector workforce in the future. 3. We have an unambiguous aim for public services in Wales: to keep them in the hands of the public. The members of our affiliated unions work tirelessly to deliver world-class public services for the people of Wales and it is only by ensuring the workforce are properly protected and engaged that those services will withstand the processes of reorganisation that are going on across the public sector. 4. The First Minister gave a firm commitment to the WTUC Special Conference in November 2010 that: CONTEXT I want to see best practice being shared and delivered across Welsh public services and that includes best practice in employee relations. Engagement, negotiation and agreement not diktat. I want the Welsh way of Government employers and unions working together to seek solutions to be the only way in Welsh public services. And this means sticking to our principles no two tier workforce, no knee jerk outsourcing, commitments to fair terms if transfers take place, and a continued adherence to our workforce code of practice from all sides 5. This consultation document builds on the commitments set out by the First Minister in the final paragraph above and outlined in the 2003 Code of Practice on Workforce Matters which aims to ensure that where public services are outsourced to a third party (a) staff will transfer and that TUPE will apply, and if TUPE does not strictly apply, the principles of TUPE should be followed; and (b) new recruits to the service provider undertaking work on that contract would be employed on terms and conditions no less favourable than transferred staff. 6. As the Minister for Local Government and Government Business set out in her letter when issuing this consultation there have been two Codes in place in Wales for the past 10 years, a code issued in 2003 under specific statutory authority for some best value authorities (now improvement authorities in particular Local Authorities) and a later code issued (in 2005 and re-issued in 2008) under general statutory authority for the remainder of the public service. 2

3 7. We welcome the clarification from Lesley Griffiths AM that both codes (the 2 Tier Workforce Codes) continue to apply in Wales and should be respected. 8. There are 332,000 people employed in the public sector in Wales and we are fighting hard to keep it that way. However, we recognise that this fight takes place under severe budgetary pressure. In addition to the cuts imposed by the UK Con-Dem coalition since taking office in 2010, the UK Government has announced it plans further cuts in current expenditure between 2015 and These have been reflected in the Welsh Government draft budget published in October 2013 which is placing pressures upon public service spending that could push our services to breaking point. 9. The capacity of the Welsh Government to protect jobs and services in Wales is made more difficult not only by budget cuts imposed by Westminster since 2010 but also by the inadequacies of the block grant as a result of the Barnett Formula and by the lack of borrowing powers and tax-raising powers available to them. Limited moves to address this have recently been announced. The Wales TUC supports the replacement of Barnett with a formula that reflects the needs of the Welsh people and the devolution of borrowing and tax-raising powers to the Welsh Government. 10. As quoted above, the Wales TUC welcomes the First Minister s continued opposition to knee-jerk outsourcing and he has recently stated that Public services must remain public. Their value lies in their universal availability... We cannot leave that to the market. If we turned public services into commodities, provided them competitively and allocated them according to the ability to pay, we would destroy what we have sought to preserve. That is not my agenda The Wales TUC remains firmly opposed to all public service changes that are driven purely by budget cuts. We understand that there will need to be reform to provide services fit for the twenty first century and our affiliates are ready to help deliver these where it is clear that changes are necessary and not just being made in a response to financial difficulties, rather than service need. 12. While we have a long history of supporting the co-operative movement, however we have some nervousness about paragraph 1.13 in the Strategic Framework for the Public Service Workforce in Wales 2 which highlights that the Mutual and Co-operative sector has an increasingly key role to play at a time when the Welsh Government is exploring new and innovative ways of delivering services and improving economic performance. We do not want this exploration to undermine the commitment to public services being delivered by the public sector. Substantial work has been undertaken by a number of our affiliates demonstrating there is no evidence that delivery of public services by mutual or co-operative owned businesses offer any benefits to the taxpayer, community, service users or workforce as an alternative to public services

4 13. The WTUC recommends March 2012 report from the Association for Public Service Excellence (APSE) entitled Shared services and collaborative working in a Welsh context: Applying theory to practice 3 which has looked extensively at different governance models for local government and found that there is little support for models of local government that hollow out local councils. The report further recognises that there is a role for local government in acting in a stewardship role for local places and economies, as an arbiter of social justice and in providing public value, but only if it retains a strong core of directly delivered services. This is a view firmly endorsed by the Wales TUC and to be commended to the Welsh Government while it undertakes its reforms in relation to local authority services, including school, further and higher education and social services. The report states that the impact of the approach to shared services on the workforce and on the local economy are key what may appear attractive in terms of the potential to deliver savings or achieve greater efficiencies may have unintended costs and consequences which will have an impact on the local authority as a whole. 14. In this context, the Wales TUC has concerns about the emerging new procurement frameworks proposed by the EU Public Procurement Directive 4 and the following new UK (England, Wales and Northern Ireland) Regulations expected in Spring 2014 which further de-regulates public procurement and allows for the reservation of public contracts for a 3 year incubation period for mutuals. 15. It is within this context that we submit our response to this consultation. While we disagree with the conclusion reached in the foreward to this document that jumps from increasingly we will all be asked to consider which services we want to retain, and which we would be willing to see reduced into despite these difficult choices, we are clear that where a decision is made to outsource a public service, we welcome the Minister s subsequent assertion that the workforce delivering these services must be protected. 16. There is no dichotomy in this position. We recognise the extremely difficult financial circumstances that public service employers find themselves in. But, we fundamentally oppose any outsourcing of these services, particularly as a quick fix to the current predicament. We are fighting to ensure that the more short-sighted employers who choose outsourcing are not able to do this at the expense of their workforce. 17. The Wales TUC seeks to ensure that values of fairness and equality exist throughout the Welsh public service and that everyone in Wales receives equal pay for equal work N.pdf 4

5 CONSULTATION QUESTIONS Question 1: In addition to those set out above, should the Code be issued to any other public service organisations? 18. It is the clear view of the Wales TUC that, in addition to those public service organisations set out in the consultation paper, the re-issued code should be issued to both FEIs and HEIs. This is a case that we have previously made in our response to the WG Green Paper on the Public Sector Workforce and our views have not changed. 19. We recognise that paragraph 47 acknowledges that discussions are ongoing with the ONS and that the Welsh Government s intention is, subject to those discussions, that the Code will apply to both Further and Higher Education Institutions. This paragraph, however, goes on to say that If the outcome of the discussions is not favourable the Code would not apply to Further Education Institutions or Higher Education Institutions. We believe that if the Welsh Government does not include FE and HE institutions in the application of the Code then it should explore encouraging these bodies to comply, through financial incentives if necessary. 20. We would appreciate further work on whether it would be possible to include any of the following: Regional (Education) Consortia (any limited company established by county councils to undertake work on their behalf); Estyn, the Commissioners (Children, Older People, Welsh Language) and the new Education Workforce Council. Question 2: Is it clear which organisations are covered by the Code and when the terms of the Code would apply? 21. The Wales TUC is clear which organisations are covered by the Code and when the terms of the Code would apply. We agree with the proposal that the core content of the Code will be unchanged from the 2005 Code (reissued in 2008). 22. Paragraphs set out that the UK Government has recently consulted on possible changes to the terms of the Fair Deal for Staff Pensions policy. The Welsh Government states its intention to consider the UK Government s final position and consider whether any changes should be made to the Code. 23. A number of our affiliates have submitted responses to the UK Government on their recent Fair Deal for Staff Pensions policy consultation. Serious concerns are expressed that the UK Coalition Government is demonstrating contempt for public sector workers in their proposals by failing to offer compulsorily transferred staff genuine pension protection. Our affiliates firmly argue that the Coalition Government have reneged on their previous reassurances and the new proposals mean that contractors will now have a choice as to whether they allow a member to retain their public service pension scheme or offer a Broadly Comparable Pension Scheme (BCPS), with costs being the determining factor. 5

6 24. Of relevance to this is the new Local Government Pension Scheme (LGPS) which comes into force from April This gives a mandatory obligation to those employers / companies transferring public sector employees to secure admitted body status into the scheme. On that basis those tendering for contracts should be demonstrating that they are content to do this and this could be confirmed in the Procurement Advice note or the pre-contract Questionnaire. There is cross-over with paragraph 63 of the consultation document which makes it clear that the Welsh Ministers propose to public a Procurement Advice Note, something that the WTUC welcomes in paragraph 31 below. 25. The Wales TUC notes that the detail of how the New Fair Deal will apply to the LGPS will be subject to consultation from the DCLG once HM Treasury has decided on whether HE and FE are to be covered by New Fair Deal. 26. We are interested in views from the WG as to what powers Wales may have to issue different guidelines to England for the Fair Deal and TUPE (with new TUPE Regulations expected in Spring 2014 from the UK Government) and what recourse the Welsh Government will take if there are emergent contradictions with the proposed Welsh two tier workplace code embodied in the Code of practice on Workforce matters, the new TUPE Regulations and the Fair Deal Guidance. Question 3: Are the enforcement arrangements clear and appropriate? Question 4: Is the alternative dispute resolution process clear and appropriate? 27. The Draft Code states that the public service organisation will enforce the obligations on the service provider created under this Code and sets out in paragraphs 59 to 62 how enforcement operates. 28. The Wales TUC, in its submission to the WG Green Paper on Public Sector Workforce in 2012, stated that: One other area for consideration (although not necessarily in the context of legislation) would be the appeals procedure. While there is one in the current code, the mechanisms to deal with it within the Welsh Government are less than satisfactory. This remains our view. We believe that the enforcement arrangements set out in the Code are clear and appropriate, as is the alternative dispute resolution process. 29. What remains unclear is the widespread application of the Code and whether there is a role for the Workforce Partnership Council in policing it. This is a matter we would like to see explored further. 6

7 30. As identified in paragraph 23, our previously stated concern is about the process where we are seeking to ensure that there is an appropriate appeals mechanism put in place following the re-issuing of the Code. 31. We welcome that the Welsh Ministers proposal to publish a Procurement Advice Note alongside the revised Code. Question 5: Are the monitoring arrangements reasonable and appropriate? 32. The Draft Code requires the service provider to provide the public service organisation with information required to monitor compliance this requirement is the same as the requirements in both the 2003 Code and the 2008 Code. 33. Paragraph 65 outlines that in preparing the Draft Code it has become apparent that there is currently a shortage of evidence of both the implementation and impact of the current Codes. To address this, the Welsh Ministers are proposing placing certain additional reporting requirements on public service organisations which are intended to provide a broader evidence base for the Code to assist in future revisions or considerations related to the Code. 34. The Wales TUC welcomes the additional reporting requirements for public service organisations and feel that a broader evidence base for the Code to assist in future revisions or considerations relating to the Code would be useful. 35. The Wales TUC believes that the monitoring arrangements are reasonable and appropriate. Impact Assessments (paragraphs 71 to 74) Question 6: Do you have any comments on the content of the impact assessments at Annex D? 36. The Wales TUC comments here are limited to the Regulatory Impact Assessment which has the most significant content for us. 37. Option 3, set out in paragraphs of the RIA, is the Wales TUC preferred option to amalgamate the 2003 Code and the 2005 Code and issue across the Welsh public service under a range of items of statute, providing both general and specific statutory authority. 38. We note the Welsh Government s acknowledgement that the costs and benefits of seeking to protect the terms and conditions of hypothetical future members of the workforce are very difficult to assess and are pleased that attention has been drawn to the work undertaken by Unison in 2002 Best Value and the Two-Tier Workforce in Local Government, Unison, 2002 amongst other sources. 39. Paragraph 52 of the RIA states that service providers could be adversely affected because they will be prevented from offering new employees less favourable conditions than existing / transferring staff. This goes to the heart of 7

8 the reasons for the Code and we dispute the premise entirely. Service providers will not be adversely affected because they will be prevented from offering new employees less favourable conditions than existing / transferring staff. However, employees will be protected from unscrupulous employers who seek to undermine their services by offering less favourable conditions than existing / transferring staff are employed on. 40. We note paragraph 54 of the RIA which quotes that there is currently only 1 incident in relation to the monitoring of compliance where the terms and conditions have been queried by a trade union, although the query went no further, as evidence that recurrent administrative costs should be minimal. 41. We believe that the reason for their only having been one reported incident is that the Code has been largely ignored by employers and, until recently, under utilised by the TUs as there have been some questions raised about its statutory status. To ensure this situation does not continue, the new Code should be well promoted; monitoring of the Code needs to be appropriately resourced at all levels (in both employers and the Welsh Government); and there needs to be confidence that when the Code is breeched, that appropriate action will be taken. 42. We are disappointed that paragraph 63 of the RIA outlines that the Welsh Government recognises that an argument could be made that in requiring the implementation of the Code, there is a resultant reduction in the flexibility of public service organisations to respond to financial pressures. Outsourcing of public services may be one option considered in reducing overheads. Requiring implementation of the Code could limit options to reduce costs and lead to a smaller field of interested service providers. 43. The Wales TUC firmly opposes outsourcing of public services and believes that if there are benefits to be made through cost reductions that those benefits should be retained by the public sector for the public. 44. We welcome the acknowledgement in paragraph 69 of the RIA that one of the benefits of Option 3 is it protects future employees by preventing service providers from offering less favourable terms and conditions than the existing workforce. As well as protecting the individual employee, there are further potential benefits from preventing a two-tier structure developing in a workplace. It has been suggested that two-tier workforces are bad for employee morale, reduce productivity and increase staff turnover. Question 7: Is there any other information that you are aware of that could be used to consider the equality impacts of the Code? 45. We are unaware of any other information that can be used to consider the equality impacts of the Code at the current time although information from the Trade Union Equality Representatives that are currently being put in place may be of use to make future assessments. 8

9 Question 8: Are there any additional matters that you would like to bring to our attention? 46. There are no additional matters in relation to the impact assessments that we would like to bring to the Welsh Government s attention. Question 9: We have asked a number of specific questions. If you have any related issues which we have not specifically addressed, please use this space to report them. 47. The argument has been made to us that the Code closes off an avenue of potential savings and the result of this, given current budget pressures could be more redundancies. We believe that there are many options available to public service providers to make savings while avoiding compulsory redundancies, however more fundamentally, we believe that any savings being made by the public service should be kept by the public. Outsourcing of public services, does not provide a long-term cost-efficient solution for the public, particularly when other models of public service delivery have not been fully explored. 48. Questions have also been raised about whether the existing Code, and any reissued Code, apply to public sector collaborations, for example shared service functions between several Local Authorities. It is the view of the Wales TUC affiliated Trade Unions that the Code would not apply in these circumstances as the services would remain public. In our view, the Code was not designed to prevent public sector collaborations and should not do so. In these circumstances a shared services agreement may be appropriate between the employer and the relevant trade unions but these fall outside the scope of this legislation. 49. We would object and firmly argue the Code does apply where any public services create shared services through a limited company, such as the south east Wales education consortia. This is outsourcing and we would expect any staff transfers to be covered by the Code in this context. 50. One final area we would appreciate some consideration of relates to teaching agencies in Wales. Although it is acknowledged that the majority of the education workforce represented by our affiliated trade unions are directly employed by schools and colleges in Wales, the growth and practices of the teaching agencies in Wales which could be argued to be a form of outsourcing are of concern to the Wales TUC. Recent Estyn and Wales Audit Office reports into covering teachers absence have highlighted areas that warrant further investigation with regard to their relevance in relation to the Code. 9