Cabinet Office kills off the two-tier code – simpler contracting?

The Cabinet Office (UK Government) has terminated the existing "code of practice on workforce matters", also known as the "two-tier code".  It says that new staff working alongside former public sector people  in outsourced services must get similar (public sector type) benefits.  In its place, there is a new 'Principles of good employment practice'. This won't be legally binding, and should not be applied to suppliers as an evaluation criterion in a procurement process; it is purely a set of principles that the Government would like suppliers to follow.

The unions are not happy.  Dave Prentis of Unison says;

Scrapping this code, at the same time as selling more and more of our public services off to the lowest bidder, will see a damaging race to the bottom.

The CBI is.

This is good news for taxpayers. The two-tier code has long been a major stumbling block for independent providers wanting to deliver public services. Its abolition will encourage new providers to enter the market, including smaller companies and social enterprises. That in turn will spur innovation and drive service improvements.

There is no doubt that the code has acted as a constraint on outsourcing type contracts, and created additional work in the procurement and implementation stages of projects.  Arguably it is also one of the reasons why a small number of providers has dominated parts of the public sector outsourced services market; new entrants have been scared off by the implications of this requirement.

Time will of course tell whether it does now spark vibrant markets and more success for SMEs and third sector bidders.

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