Two tier code scrapped for local government

The two tier code for local government services that are outsourced to the private or third sectors has been scrapped, following a decision last autumn to scrap this protection for staff employed in central government contracts.

The code required private contractors who employed new staff to deliver public services on terms that were “overall no less favourable” (with the exception of pensions) to those who had transferred from the public sector under Tupe regulations.

The removal of this requirement could result in contracts being awarded to those suppliers who offer the worst staff terms and conditions, as was often the practice with compulsory competitive tendering (CCT), when contracts were let simply on price.  This may be at the expense of employee’s terms and conditions and even result in staff with Tupe-protected rights being forced out of their jobs to make way for lower skilled and cheaper replacements. This would see morale fall; skills diminished and often poorer value for money for the service user.

When the Cabinet Office abandoned the two tier code for central government it introduced a set of six principles of good employment practice but it is hoped that individual local authorities will promote good practice through a voluntary commitment to apply the original local government code, or by adopting its own principles of good employment practice in their procurement processes and contracts.

The code was first introduced in 2003, and in addition to addressing employment terms for staff recruited to work on contracted services the code also required local authorities and contractors to engage 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.

When services were procured from the business and third sectors, the bidders were required to demonstrate their ability to meet the client’s objectives without returning to some of the horrors of the period of CCT.