The Growth Review has announced that the Government will act to remove barriers to more open and efficient local public services including guidance on workforce matters. I wish to provide the House with a detailed update on our approach, including plans to discuss with employers, employee representatives and others whether any alternative arrangements might be useful in the future.
I am revoking, with immediate effect, the guidance on workforce matters which formed part of the last administration’s Best Value regime. This is the Handling of workforce matters in contracting and the Code of practice on workforce matters in local authority service contracts (‘the two tier code’) (Annexes C and D plus paragraphs 28 to 31 of ODPM Circular 03/2003) and corresponding guidance applicable to fire and rescue authorities and the Greater London Authority (ODPM circulars 07/2003 for the GLA and 09/2004 for the Fire and Rescue Service).
Councils, the voluntary sector and businesses - especially small firms - have called on the Government to remove unnecessary burdens and barriers that act to prevent fair and open competition. Removing this guidance will help create a level playing field, ensure more opportunities for innovation, help ensure better value for taxpayers’ money in the provision of public services, and remove red tape that hinders job creation.
The withdrawal of the two-tier code will not impact on existing TUPE regulations and provisions in the Employment Act 2008 or other employment legislation. There may be instances where contracts will be due for renewal or are currently out to tender and it will be a matter for local authorities to take legal advice on the particular contract specifications and circumstances. The abolition will not be applied retrospectively. Therefore existing contracts and the employment terms that flow from them will not be affected by withdrawal of the code.
I will be writing over the coming days to employers, employee representatives and others to invite their views on whether there might be anything, such as a statement of good employment principles in place of the Code, that would be helpful for the future.