Guidance to Local Authorities
Council Contracts s52 Guidance Guidance
to Local Authorities on Contracting
Briefing No. 191 September 2008
This briefing covers the Scottish Government's statutory guidance
to local authorities on contracting issued under s52 of the Local
Government in Scotland Act 2003.
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
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
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.
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.
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!
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.
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
@ The P&I Team
14 West Campbell St
Tel: 0870 7777 006
Fax: 0141 221 8953
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