14 March 2003
Councils are to press local government minister Nick Raynsford for extra cash to meet the costs of ending the two-tier workforce in outsourced contracts.
The Local Government Association executive was seeking an urgent meeting with the minister because of concerns that complying with his new code of practice will increase tender costs.
The association is alarmed that the government has not offered extra money to cover this, and is working on quantifying the costs.
Under the code, contracts must specify that new recruits to outsourced workforces will enjoy terms and conditions that are overall 'no less favourable' than those of their colleagues who transferred from local authority employment.
In a report to the executive, LGA head of futures Matthew Warburton said this wording had been 'a significant victory for the unions'.
The LGA and the private sector had argued instead for 'fair and reasonable' conditions. Warburton said that the new code risked 'ossifying terms and conditions and blocking new ways of working'.
The report states: 'No wise local authority would bind itself to deliver no less favourable terms in every negotiation on modernisation of service delivery with its own workforce, so it is not clear why it would seek to impose such a condition in every service contract.'
Warburton told Public Finance: 'Nick Raynsford has acknowledged on a couple of occasions that the code will drive up tender prices. It is a major issue to pursue.'
But he said the increased costs were not likely to see a return to lowest price procurement, since it was widely accepted that this rarely provided Best Value.
A Unison spokeswoman called the association's stance 'very, very disappointing'. She added: 'There have been 18 months' of detailed talks and Tony Blair himself gave us a commitment to end the two-tier workforce. At this stage they should accept that this is the deal. We are talking about very low-paid workers.'
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