Y Pwyllgor Cydraddoldeb a Chyfiawnder Cymdeithasol

Equality and Social Justice Committee

11/07/2022

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Altaf Hussain AS
Jane Dodds AS
Jenny Rathbone AS Cadeirydd y Pwyllgor
Committee Chair
Joel James AS Yn dirprwyo ar ran Altaf Hussain yn ystod eitemau 3, 4, 5 a 6
Substitute for Altaf Hussain during items 3, 4, 5 and 6
Ken Skates AS
Mike Hedges AS Yn dirprwyo ar ran Ken Skates yn ystod eitem 5
Substitute for Ken Skates during item 5
Peredur Owen Griffiths AS Yn dirprwyo ar ran Sioned Williams yn ystod eitemau 3, 4, 5 a 6
Substitute for Sioned Williams during items 3, 4, 5 and 6
Sioned Williams AS

Y rhai eraill a oedd yn bresennol

Others in Attendance

Alice Horn Swyddfa Comisiynydd Cenedlaethau’r Dyfodol Cymru
Office of the Future Generations Commissioner for Wales
Ed Evans Cymdeithas Contractwyr Peirianneg Sifil Cymru
Civil Engineering Contractors Association Wales
Jon Rae Cymdeithas Llywodraeth Leol Cymru
Welsh Local Government Association
Karen Higgins Cymdeithas Llywodraeth Leol Cymru
Welsh Local Government Association
Kirsty Cumming Community Leisure UK
Community Leisure UK
Liz Lucas Cyngor Bwrdeistref Sirol Caerffili
Caerphilly County Borough Council
Marie Brousseau-Navarro Swyddfa Comisiynydd Cenedlaethau'r Dyfodol Cymru
Office of the Future Generations Commissioner for Wales
Yr Athro Alan Felstead Prifysgol Caerdydd
Cardiff University
Yr Athro Edmund Heery Athro Emeritws, Prifysgol Caerdydd
Professor Emeritus, Cardiff University
Yr Athro Lydia Hayes Prifysgol Caint
University of Kent

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Angharad Roche Dirprwy Glerc
Deputy Clerk
Catherine Hunt Ysgrifenyddiaeth
Secretariat
Rachael Davies Ail Glerc
Second Clerk
Rhys Morgan Clerc
Clerk
Sam Mason Cynghorydd Cyfreithiol
Legal Adviser
Samiwel Davies Cynghorydd Cyfreithiol
Legal Adviser
Stephen Davies Cynghorydd Cyfreithiol
Legal Adviser

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.

The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.

Cyfarfu’r pwyllgor yn y Senedd a thrwy gynhadledd fideo.

Dechreuodd y cyfarfod am 10:30.

The committee met in the Senedd and by video-conference.

The meeting began at 10:30. 

1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau.
1. Introductions, apologies, substitutions and declarations of interest

Good morning. Welcome to the Equality and Social Justice Committee, where we are having further discussions about the Social Partnership and Public Procurement (Wales) Bill. I've had apologies from Sarah Murphy, and we have substitutions for all the items in relation to the public procurement Bill, so Peredur Owen Griffiths is substituting for Sioned Williams, and Joel James for Altaf Hussain. On item 5, the after-lunch session, Mike Hedges is substituting for Ken Skates. Are there any declarations of interest that anybody wishes to make? Thank you for that. 

2. Papurau i'w nodi
2. Papers to note

I wonder if I could ask you to note correspondence, as outlined under section 2. Does anybody wish to add anything on that? Jane Dodds.

Thank you, Chair. I will write further on this, but I would just like to raise issues in relation to the timescale of recommendations 1, 6 and 21 in the response from the Minister for Social Justice with regard to the winter fuel support scheme. But I will write to you, if I may, and the committee, with my issues. Thank you.

Okay. We'll obviously be coming back to the Government's response to our fuel poverty inquiry, and, clearly, it will be discussed in Plenary in the autumn. So, thank you for those comments. 

3. Y Bil Partneriaeth Gymdeithasol a Chaffael Cyhoeddus (Cymru): sesiwn dystiolaeth 7—arbenigwyr caffael
3. Social Partnership and Public Procurement (Wales) Bill: evidence session 7—procurement experts

I wondered if we could now turn to our first scrutiny session with Ed Evans, representing the construction industry. CECA Wales, is it?

CECA Wales—it's the Civil Engineering Contractors Association. 

Thank you very much. I couldn't remember exactly. Thank you. And we've also got Liz Lucas, joining us online, from Caerphilly council. So, welcome to both of you. Thank you, Ed, for your paper, and I wondered if you could just—. Obviously, you're generally supportive of the Bill. If I could just start off with you saying why you're anxious about being represented as one of the nine employer bodies on the social partnership council, when I'm fairly certain you'll get onto the procurement sub-group, for obvious reasons. 

I think, first of all, it's worth just pointing out that we've been involved in and out in the development of the Bill for—it feels like a long time, actually—certainly two years, anyway, so we're fairly familiar with how things have developed. As far as the council itself is concerned, I guess, as with most businesses, we're just keen to make sure that our bit, if you like, of industry is represented, but we also accept that it needs to be a very tight and rapid functioning, I guess, council. We accept that it's putting a marker down there, really, but, yes, I would hope that we would be involved in the procurement element of it, because that bit is particularly important to us as a sector. I think what we were looking for as well, though, was some kind of flexibility, I guess, that, when issues change, circumstances change, there is an ability to get some kind of formal representation through that council, if there's a specific issue affecting our sector. 

Okay. Well, your comments are noted, and obviously that's down to the First Minister in the end, but, generally speaking, though, are you happy with the way in which the Bill has been drafted? Do you think, as drafted, it will meet the Government's objectives in terms of public procurement? 

Yes. I think the process that we've been through over the last couple of years has given reassurance, really, that it's, if you like, heading in the right direction; it will do those things. I think our big concern with this was the contract management element of this, and we were really keen to get that adequately covered, shall we say, within the legislation, mainly because, to a certain extent, it seals the deal, if you like. Certainly on the public procurement side, I think it's an area that we found great deficiencies in over the years, where there are good intentions at procurement stages when that public-private sector interface first interacts. Lots of promises made, and lots of requirements in there, and it's the good time, if you like, of the process, the delivery of infrastructure projects. What we tend to see is that that isn't necessarily carried through, then, throughout the contract and at the very end, and we just feel that a lot of social value outcomes have not been delivered because of that. So, this is a way of closing that loophole and ensuring that there is some accountability and responsibility right through the process, not just at that procurement interface.

10:35

We'll come back to those reservations a bit later on in the conversation. Liz Lucas, could you tell us, as you represent Caerphilly council, who've obviously led on procurement of food in particular, whether you think this Bill is fit for purpose?

Yes, I think it is fit for purpose. I question do we require the Bill, because many of the details within the Bill we're all ready to actively undertake with the current legislation. I think one of the most important parts of this Bill now is to raise the profile of procurement, and the reporting mechanism within it will also ensure that local authorities recognise the importance of the procurement, the contract management element of it, and it will put procurement at the forefront. But this Bill is completely a change in culture, isn't it? It's starting to look at outcome-driven procurement, and certainly around social objectives, rather than the end price at the end of the day. So, it is fit for purpose. It's going to be very challenging for the public sector to be able to resource this adequately enough for it to deliver on the ground, and I think that's a fundamental element that we must be assured will happen.

Okay. Some people would argue that we've talked a lot about procurement in the last 10 years, but we haven't actually made as much progress as many people, including employers, want to see in delivering on the foundational economy, to ensure that local businesses are getting a fair crack of the whip when it comes to public resources. How do you think that the provisions in this Bill will help to drive better procurement of food by public bodies, particularly with universal free school meals for all primary schools in the very near future? Could you just tell us what your initial view is on that—(a), the challenges and (b), whether it's ambitious enough?

The Bill in itself will open up the doors for us to challenge the way in which we procure everything, not just food, okay. So, when we look at food procurement, what the Bill will do for us, obviously, is allow us to look at the wider outsets, not just the procurement of food, and one of the key elements of the Act—[Inaudible.]—and the need for that to look at that and make sure that that is fit for purpose and sits within the requirements of the Bill.

Then we need to look at the construction of all our schools and make sure the provisions for kitchens are able to cook locally produced food. The Bill will obviously open up the way in which we contract with some of our local providers and allow them more collaboration with local authorities and the public sector, so we can look at seasonal developed produce and how we can bring that into our procurement process. So, I don't think it will hinder it in any way; I think it will support it and take it forward. But the Bill, for me, doesn't look at operational procurement. It's at that outset of objectives—social value objectives—and if we take that in its totality, we will look at all elements of buying food, not just the produce.

Thank you very much. Moving on, Peredur Owen Griffiths, would you like to come in?

Yes, thank you.

Croeso cynnes i'r ddau ohonoch chi.

A very warm welcome to both of you.

Liz, you touched on this a few minutes ago, about the extent you think the objectives of procurement elements of the Bill could be achieved using existing legislation. You also talked a little bit about what adding legislation would do to this. Could you expand a little bit on that?

Sorry, could you just repeat the last part of the question?

Could you expand on the element of what introducing legislation will add to the processes that are there already?

10:40

I'm not sure it's going to add anything, if I'm perfectly honest. But I'm hopeful that it will actually join a number of legislation and good practices together. There's an awful lot of initiatives in procurement already, and I think Ministers have already touched on it. Over the last 10 years, we've done a lot on procurement. In fact, we've reviewed procurement to death. I think it's about the operational on the ground now. I think what the reporting mechanisms within the Bill will do will highlight whether we are succeeding or not, and if there's one thing that the procurement profession is screaming out for at the moment it's the opportunity to try out some of this in a safe space, and one of the things that is very key for me is that the social partnership council is not a big stick to beat us with if we get it wrong. It's got to be a place for us to develop and to get an understanding of how we can change the way in which we do procurement to satisfy these objectives that are outlined within the Bill. I'm a strong advocate of the foundational economy, and I believe there's a lot of good work that can certainly be done right across Wales in this area, but we never seem to really follow it through and make inroads to make it the day job. So, for me, this is all about delivery on the ground now, recognising the power of the public purse and making sure that we take it forward and get some good results for Wales and for the communities that we serve.

Ed, do you tend to agree, or tend to disagree? Obviously, you're in slightly different arenas.

I'm coming at it from a slightly different angle. I do understand where Liz is coming from in terms of what the legislation will add to the better performers that are out there in the public sector, and you can argue either way. For me, what it would do is it would start to tackle some of the poorer performers, of which there are many, and I think we need to be honest about this; not everybody is performing at the same level. So, for me, it's maybe not a stick to beat people with, but it starts to bring in some accountability for those procurers that are not doing the good stuff, the stuff that voluntarily they could do as best practice at the moment. So, for me, this is about raising the standards across the board, not just the good performers. So, yes, for me, it's very, very important that this legislation does go through.

But, to follow through from Liz's point around contract management—and I know we will come back to that in a minute—for me, that's seeing it right through to the end, and, at the moment, there's too much that ends at what I'd call a tendering stage, a commissioning stage, and it's all good stuff at that point. How often does that actually get through to the final outcomes? We don't see it consistently across the board, so, for me, the legislation starts to tackle that and brings in the responsibility and the accountability.

So, it's finding that balance of consistency and bringing the poorer element up to the middle, and obviously allowing the good performers to thrive.

It is, and it is about having that safe space as well to test some of those things, but I don't think it's just the public sector, because what it does then, it raises the bar across the private sector as well, because you know that you have to deliver. At the moment, if you're working with one of the poorer procurers, you kind of know that you maybe don't have to try so hard. So, we're not rewarding good performance in social value outcomes in the same way as we would with, I think, this legislation.

Okay, thank you. You talked a bit about flexibility in the social partnership board and that element, and section 22 states that the bodies that are included in Schedule 1 are covered by the requirements of the Bill in relation to responsible public procurement. Liz, do think that Schedule 1 covers the right bodies, or would you add anybody or take anybody off?

At the moment, it covers the right bodies. We've got to start somewhere, but you've got to ask yourself, as this develops and we gain more confidence in it and the ability to do it—. Because one of the issues that we have got, don't forget, is a resource issue and a capability and capacity issue within procurement. So, when Ed talks about the contract management element of it, we are struggling for resources to see that right through, especially on some of the big contracts. So, I think, over time, it should be that all bodies should be included, but we've got to start somewhere.

If you're in agreement, then I'll move on to the next set of questions.

10:45

I think we made the point that it needs to be a tight one. It would be great to be on there, but we accept that there's a good spread on there at the moment and we'll work through that.

Okay. So, from both your spheres, where you're working, what will be the cumulative impact to those involved in the procurement process of needing to implement some changes to the procurement resulting from this Bill and obviously the UK procurement Bill that's going through? Liz, I'll come to you first, because you've talked about resourcing. Do you want to elaborate a little bit more on what are the challenges and what you would need to do to be able to overcome them?

In terms of Caerphilly, we're well resourced. We've got a centralised procurement team; I'm head of procurement within Caerphilly and have been for a number of years. We've got a well-structured team that works. When you look right across the public sector, those teams vary in size, capability, capacity and knowledge as well. And also, when we're looking at some of the procurement elements that we want to now take forward as part of this Bill, we need expertise in other areas, such as legal, risk and contract management, and those resources are not readily available. So, I think there's going to be a period of time, now, as this Bill comes in and the new procurement legislation, the procurement reform—. It's the upskilling of the existing teams, but also bringing in new talent that is able to help us take it forward. And there is a gap in that capacity coming through.

Yes. I think we all recognise that there are constraints across the public sector. I'd argue that there are some ways of trying to manage some of that. For me, we talk about collaboration all the time—collaboration across public bodies but also with the private sector. I think there are areas there where we could do things better. For me, the big barrier is cultural. I know that we're talking about a piece of legislation that is going to be very strict and very well laid out, no doubt, but there are some cultural issues here, I think, across the whole of the public sector and that manifests itself in the private sector, then, around quite a transactional approach, at times, to contract management and procurement. I think certainly in terms of social value outcomes, transactions are quite a cold, hard way of doing things, and that's fine with money, but when it comes to social value—and we're talking about jobs for local people, apprenticeships and so on—I think it needs a slightly different approach in terms of that collaboration between public and private sector and helping each other through the process a little bit, as opposed to, 'We've awarded a contract. It's you now'. 

I just wanted to pick up on what Ed said, because I think it's a really important part. One thing that we must do going forward is encourage a dialogue with our supply chains and collaborate wider with them. We won't achieve what we want to achieve from this Bill if we don't have a different dialogue. We have become too transactional and automated in some parts. There is a freedom to speak to the supply chain, however, over the yeas, we've seemed to move away from it. So, what I'd like to see is far more discussion with the supply chain, understanding how we can work together and how we can share the risk of delivering some of this. Because at the moment, it tends to push all the risk down to the contractors, whereas it may sit better with the local authority delivering it, especially when it comes to some of the employment issues. So, we will never tackle the sustainability, the local production and bringing in some of the employment opportunities unless we have that engagement and that collaboration and flexibility right through the duration of the contract, because we've become too rigid.

Just one follow-up and then I'm done. Thanks, Jenny. How do you measure social value, then? How do you quantify that into the guidance and how do we track that over time?

We have certain measures, anyway, through community benefits toolkits, which we've been using for a long time, and they're probably the best that we've had, to be fair. But I think if you want to move away from just putting in targets and clauses and saying, 'You will employ four apprentices, three school leavers, five people who are not in education, employment or training' all those different things, what it does is—. Well, it does what Liz just said, really; it pushes that responsibility, if you like, down the supply chain, and it may or may not happen. We need more of a collaborative approach, helping each other, to a certain extent, setting up systems for engagement with schools. That best sits in the public sector, but the private sector can deliver it. So, if some of those mechanisms are in place to help the private sector deliver, then those targets that we mentioned there are probably as good as anything to measure it. It's just that, at the moment, the collaboration isn't working, so you will always struggle to meet those targets. 

10:50

Before I move on to Jane Dodds, I wonder if I could just come back to Liz Lucas. Clearly, Caerphilly have got the expertise to do this, because that's why you've been leading on procurement for the majority of local authorities on the procurement of food for schools. Is it really necessary for all 22 local authorities to become experts in this field? If not, is it not possible to have some sort of collaborative arrangements between local authorities? But if you do that, how are you going to get the granular understanding of very local producers who may be excellent at providing a small amount of contracts? There is a tension, isn't there, between locality and proper expertise, so I just wondered if you could say a bit more about that.

There's absolutely no need for 22 local authorities to be experts in every category area of spend. Many years ago, we had the Welsh purchasing consortium where we had 22 local authorities working together, but there were experts who would look after food, Caerphilly looking after ICT as an example, and then you'd have people like RCT looking at the big construction contracts, and some of them have now been taken over by Cardiff. So, we've always had this ability. With the services boards, as well, we're starting to work very well there now on more collaborative arrangements in our regions. So, we're able to do that.

I don't think there is a tension that we want—. I suppose, when you look at food production in Pembrokeshire and those areas, and Carmarthenshire, where they've got more ability to produce food than maybe some other local authorities within Wales, there shouldn't be a tension, because we are able to talk to them, we're able to understand the different needs and the locality requirements. So, the experts should be able to drill down into that and be able to deliver for it. We need more collaboration, we need more acceptance that there are experts in some local authorities or some public sectors, and allow them to do it, otherwise, we will never, ever meet the obligations of this Bill and be able to deliver on the ground, because there just are not enough of us.

Diolch yn fawr iawn, Gadeirydd a bore da ichi i gyd. Diolch yn fawr iawn am ymuno â ni.

Thank you very much, Chair, and good morning to all of you. Thank you very much for joining us.

I just wanted to extend the discussion and focus in on the construction contract management duty. You've talked a little bit about this, and it might be that Mr Evans's expertise would be good to hear more from, but Liz, I don't know if that's your area either. We've heard you talk about the construction contract management issues and the supply chain. Could you just say to what extent you think the Bill will deliver the desired impacts in relation to the whole of the construction supply chain and what improvements could be made in relation to this? Ed Evans first. Diolch yn fawr iawn.

Diolch, Jane. One of the big barriers, I would say, to us being able to really deliver on social outcomes is some cultural resistance, behaviours, if you like, across the whole of our industry, not just the public sector. So, that is there, whether we've got the legislation or not. I think what the legislation does is, as I mentioned earlier, it seeks to raise the standard and up the ante, I suppose, for all across the industry. It puts a baseline and says, 'You have to do this, we've legislated for it.' There comes a whole process after that, then, in terms of addressing some of those cultural behaviours—the collaboration versus transactional behaviours, which Liz picked up as well. It’s almost a two-stage approach here. The legislation is in place, it tells us what we need to do, or the minimum standards that we have, it puts the responsibilities and accountabilities where they need to be, but we have a whole task, then—call it good practice, whatever you may, guidance, et cetera—we’ve got a piece of work to do after that, then, to implement some of these things. I don’t think you can legislate for that. Well, I don’t think you can, quite.

10:55

Diolch yn fawr iawn. Thank you. You touched there on cultural aspects, and I don’t know if you wanted to say any more about that very briefly. I’d just be interested to hear, because you are the expert on this, really.

Sure. I think in terms of culture, we still have a culture, a deep culture, I think, of lowest price. Whether we like it or not, price is quite an easy differentiator, and we do too much of that. When it comes to social value outcomes in particular, it doesn’t fit in that box quite as neatly. How can we get the cheapest apprentices? How can we get the cheapest way of engaging with schools and supporting their curriculum? It doesn’t work in quite the same way. These things do cost, so they have to have a cost associated with them. In terms of accountability, if you can bring a job in as cheaply as possible, you get more things done for your budget, and that tends to be the driver. But I don’t think that supports social value outcomes, I don’t think it supports carbon management—there are a number of areas. So, for me, we need to move away from that, and that’s the big cultural difference and shift I think we need to see. I won’t say anything else.

Thank you. That was really interesting. Liz, I don’t know if you just want to comment briefly on that as well in terms of your experience in Caerphilly.

I totally agree. The experiences in Caerphilly, across the board, really—. I’ve never been measured in procurement on cost savings. We’ve always been measured on our outcomes in terms of social value and the foundational economy work that we do, and the amount of spend with SMEs, not only within Caerphilly, but across Wales, because we actually map where our suppliers sit. So, I think that’s a cultural change; we’ve got to move away from this price element.

I think the Bill can only bring good things into the construction industry in terms of fair work, but an experience I’ve had in Caerphilly over the years that worries me and concerns me greatly is that of payment to the subcontractors. I know we are going into project bank accounts, but will this still tackle the problem? So, you’ve got main contractors that act, basically, as a managed service, so they win the business, but they’ve subcontracted it all out, and I’ve had subcontractors sat in my office absolutely with destroyed businesses because the main contractor’s gone out of business and they’ve done the work and haven’t been able to get paid. That is a fundamental issue in construction that we need to tackle. I still don’t understand with the Bill how we tackle that and make sure that the subcontractors who do the work get paid for the work they do. They very much deliver the social value on the ground, not the main contractor, in many cases. I think we’ve got to be fair to them; we can’t keep pushing the risk and all the issues down the supply chain to the local SMEs. I think we’ve got to change that somehow. So, there’s a culture on both sides of the fence.

Diolch yn fawr iawn. That’s very interesting. I just have one final question to you both, and if you could keep it brief, that would be great. Do you think there are any further duties that can be added to the construction contract management aspect of this at this stage? Just anything you feel can be added.

Ed yn gyntaf, os gwelwch yn dda.

Ed first, please. Thank you.

Probably, to a degree, but to a certain extent I’d just like to get what we’ve got moving, to be honest with you. I think, yes, we could go with a long, long list of things, but I think we could probably pick up a number of those separately through other things.

Nothing at the moment. I think this is the place to start; it'll be about where we go next and how we develop it and how we keep reviewing the impact of this Bill. Because like the Well-being of Future Generations (Wales) Act 2015, we’ve got to have delivery on the ground, it can’t just be words on paper.

Okay. Just specifically on the point that has been made by other witnesses, which is how we avoid simply pushing risk further down the supply chain to the weakest, smallest partner, do you think the Bill is sufficiently clear that there's got to be risk sharing in this? 

11:00

No, it isn't, and I think I alluded to it in the paper. There's a certain—. The legislation can do so much, but if you start to dictate exactly what risks get passed down and which ones don't—that's not a legislative issue for me; that's more an issue of behaviours, culture, good practice, and we have plenty of that, to be honest with you, across the construction industry. What the Bill will do, I think, is push clients to consider that more. It is far too easy to push that risk down the line, because then you push accountability down the line. Let's be fair—anybody who's trying to deliver a project or a piece of work where they're being measured on budget and time et cetera, they want to get rid of as much of that risk as they possibly can to somebody else, but it's not a mature way of doing it. I don't think the legislation needs—. It'll become too cumbersome, I think; we just need to up the ante and get the better performers—you know, bringing up the poorer performers on that. We know how to do this; we just need to change that culture. 

Very, very briefly, with Liz, you talked about mapping out your supply chains across Wales and beyond. How advanced is that in other councils across Wales? Is it something that is easily replicated, and does it then help to—? If you understand your supply chain, can you understand where there are supplies within that supply chain? 

I think it varies across Wales, and the depth to which it was done as well. I've been looking of late to say, 'What local produce is actually grown within Wales?', and nobody could give me a register of who was producing what within Wales and where I could buy it from. So, there is a lot of work to be done on that around what products and services are available from within Wales, because we don't really know. But it is variable across the board. Some people do it in category areas, where they have a category management approach to procurement; other people will do it in a very different way.  

Thanks, Chair. First of all, do you support the inclusion of the duty relating to outsourcing public services in the Bill? 

I'm not sure whether my question could be heard, Chair. Shall I say it again?

I think so. I think they're just waiting to see who's going first. Ed, do you want to start? 

I'll be honest with you—. I haven't given it a great deal of thought, to be honest with you, so I'm probably not in a great position to comment on it. I don't know if Liz is. 

Okay. So, we don't outsource very much in Caerphilly at all, to be—. Well, nothing. We've got no outsource contracts provisions at all, but reading the details within the Bill—and I'm no expert on it—I would say that it starts to secure workers' rights and the way in which they would be treated. So, you've got to support it, if I understand it correctly. 

Okay. Thanks, Liz. The Deputy Minister said that the existing two-tier code doesn't protect workers' terms and conditions over the longer term. Would you agree with that, and you think the Bill will go some way to address these concerns? 

I'm not an expert in that area at all, unfortunately. However, I have read the Bill and I do believe that it will give more benefits than what we've currently got, but you would need to speak to somebody who is more of an expert in that field. 

Okay. Thank you. I'm going to move on, if I may, Chair, to questions concerning accountability. Do you think the compliance mechanisms in place for the two contract management duties are sufficiently robust? Do you think there should be any changes at all to them?  

I don't think there should be any changes at the moment. Because contract management isn't something that's done well right across Wales, anyway, we've got to have a starting point. So, for me, it will be about understanding what this means. And again, that's my—. My biggest concern with all of this is how do we measure it and make sure that the Bill is successful, because we need this Bill to be successful to improve things on the ground and operationally. It's a strategic Bill that will have big changes in culture and the way in which we work, and we've got to somehow have a reflection period to make sure it is delivering what it set out to deliver in the beginning. And it may be for that council, the social partnership council, to set its objectives early on of what it would like to see delivered within the first year, the second year, so that we've got something to build on, and, if we need to go back and change it, then we can do. It's about this flexibility, having a safe space to learn, and then come back and make sure that the legislation is always fit for purpose for us. 

11:05

Sorry, Ken. It's a similar view from me, really, though. We are where we are; we need to make a start on this. I think it will start to tackle, I hope, that disconnect between that procurement stage, where, if you like, the rules are set out and agreed between public and private sector deliverers, but it will start to, I hope, focus minds then on those that are delivering that contract and, actually, measuring against the original promises that were made right at the very beginning. What that does at the moment, because it's, in my view, not taken seriously enough, the social value outcomes—and the same will apply to carbon management outcomes as well—. Because it's not taken seriously across the whole of the public sector—. There will be good performers, but it's not taken seriously across the board. So, how that manifests itself in the private sector is you work out—. Well, you understand your client, you work out who it is, and is that a person that is really going to drive this home and really hold us accountable for social value outcomes, or is it somebody who doesn't really care? And if it's a person who doesn't really care, then you'll price accordingly. And the sad thing is, then, you're potentially going to be in a more advantageous position to win that contract to deliver less than somebody who's actually, in the private sector, looking to really trailblaze and deliver good outcomes. That shouldn't happen, but it does at the moment. And I think that that will start—. The Bill, for me, should be starting to get rid of that inconsistency.  

Hang on a moment, Ken. I think Liz Lucas wanted to add something. 

Thank you, Chair. I just wanted to add that we do care, and we don't put social clauses in or social value into our contracts not to deliver it. I'd hate for people to think that. But it does come down to individuals, and you've got people who are really passionate about procurement and what procurement can deliver, and you've got others that are operational procurement and maybe do not have the same passion. So, you can't legislate for how passionate people are about their job and the roles they do. And I support what Ed says: we've got to start somewhere, and it will bring in a more consistent approach. However, we do care, and an awful lot of us in the public sector procurement family do care about those outcomes. 

Thanks, Liz. Can you set out the circumstances under which you believe Welsh Ministers should use the powers in section 41 of the Bill—those powers to investigate how the contracting authority carries out procurement? 

Can you just say the beginning again, please? 

Yes, sorry. Can you identify, and perhaps set out the circumstances under which you believe Welsh Ministers could utilise the powers in section 41 of the Bill, those powers being powers to investigate how the contracting authority carries out procurement? 

Yes, this element worries me a little bit, and I've talked about this big stick, because there will be occasions where we will have suppliers who will challenge what we've done, or something will go wrong and there will be some form of legal challenge to what we've done. And I think we've got to be careful with these powers that they don't deter us and make people frightened of actually going about trying to deliver some of this, so I think it's with caution. I don't think it should be a regular occurrence. I think one thing they could look at is the power to use it to get best practice as well, mind; it shouldn't always be about the negative side of it. We should also learn about the good stuff, so we can share that best practice around. So, it's with caution. I haven't given it a great deal of thought, if I'm honest with you, in terms of when we can use that legislation. But I would say, please, be careful, otherwise you're going to have a lot of frightened public sector procurement officers not wanting to do anything because we're going to be investigated, and we can't have people hung out to dry on some of this. It's about that safe space, especially early doors, anyway. 

Sorry, again. I was just going to add, really, that I do support that. It does need to be—. Let's just start, and let's not stifle, if you like, people who are trying to do things. But, equally, I think there does need to be an area where people need to be clear that there will be some scrutiny of the outcomes, and proper scrutiny, so that the accountability is tested every single time, because otherwise we won't change anything at all. We will just have exactly the same smoke and mirrors, at times, happening. And I do take Liz's point. It's back to the good performers and the bad performers. We need to get everybody up to—well, closer to—the good performers. It needs to be more consistent.

11:10

Okay. Thanks. Just one final question from me, Chair, and it regards transparency. The Deputy Minister said that transparency was the key to this, or a key component to this legislation. Do you think that increased transparency will lead to better procurement outcomes?

Again, it is very difficult to say on this one, because, in terms of Caerphilly, we publish all our forward work plan for the five years. We publish all our contracts that we award. And I was discussing this internally recently, that I'm not really familiar with anything other than transparent procurement. I think it's a difficult one. We're just going to have to see how it goes, to be honest with you. It may bring challenges in the beginning, which we can learn from. The one thing it will do is stop any direct awards that shouldn't be happening, because people will be questioned, then, 'Why are you doing it in that way?' So, it may open up the market slightly, but, from a Caerphilly perspective, we're very transparent in all that we do, and we publish all our data.

If I can just add to that, I would just say that 'yes' is the answer, I think. It's back to, again, raising the transparency so that you can see where the good performers are and the not so good performers. It will start to point the finger, then, and hopefully everybody will then want to raise the standard to the better performers'.

Thank you, Chair. I was just wondering if I could start on something that Liz said earlier, about the issues with resources, capacity and capability, and I know Peredur also touched upon it, then. Is there a concern, then, that this legislation will just add further issues to what you're already experiencing, and, if so, what sort of additional help and support do you think would be required to help address that? Is it a case of just extra money or extra guidance, not just with yourselves but throughout the procurement chain, then, if that makes sense?

Yes. There's certainly a need for additional resource into the function right across Wales. We need to lift the seniority around procurement. You know, how many local authorities have got a director of procurement? I don't think there are very many, if any. How many people have got a secure procurement team that undertakes all their third party expenditure? Not very many. So, we need to address that. I think the biggest area of growth in resource capability and capacity is around the contract management element of it, because it is poor right across Wales, from my understanding. There will need to be some guidance and support on that as well, and certainly time to be able to establish it to a level that is acceptable to the industry, and that's right across Wales. I don't think I'm just talking for Caerphilly. We would need to develop our contract management methodology. We've started, but we would need to develop it further and deploy it within the organisation and resource that adequately.

Yes. I understand there are going to be resourcing issues in huge departments across the public sector, but I think we do need to start from a point where we look at maybe doing some of the stuff differently as well, so it's back to the collaboration. You probably need some more resources, but you probably need to do things differently as well, and start to mirror some of the better performers. So, that's part of it.

I think, in terms of the contract management element, what you tend to see, certainly in the construction side, is you will start the process with procurement people, but then the delivery and that contract management will then maybe be through civil engineers or somebody who's actually delivering on food production or whatever. So, you do have a slight disconnect here, and I would worry—. I accept what Liz says, that people are passionate about this, but that passion doesn't always see its way through to the contract management side with a whole different set of people here delivering on that side of it. So, I think there is some joining up to do here as well. So, yes to some resources, but let's really look at the way we deliver some of these things as well, and squeeze as much efficiency out of that as we can.

11:15

Yes. Just the one point that I haven't made today as well is how we utilise digital and our systems, and this once-for-Wales approach, because again, we can use that, but we've got so many different systems working in different public sectors. And the recording of data, so we understand what the expenditure is doing and the measurement, and the outcomes reporting needs to be on a once-for-Wales basis, so we've got all got transparency of that as well.

Perfect. Thank you for that, and I've got to apologise: I should have started by thanking you for coming to today's evidence session. So, with that in mind, I know one of the issues that was raised, especially in the explanatory memorandum, was how even with legislation, it takes time for procurement to get up and running properly and everything. If this Bill comes in, how quickly do you think organisations and councils and other public bodies will be able to implement the new legislation?

I'd probably benefit from going to Liz on this, to be honest with you, because you're closer to it, I think, in terms of the organisations. But I wouldn't mind saying something afterwards, if that's okay.

From my point of view, we all know that the Bill is coming. We've got plenty of time to get ourselves organised. I think this is a cultural shift, and my worry from some of the discussions in the previous committees I've listened to: this is all being focused at the procurement professional and very much operational procurement. This is a strategic direction that needs to come from our leaders, our politicians, the authorities and our chief executives. This is a different way of working, a different way of our third-party expenditure impacting the outcomes for the people of Wales. So, we need to raise that bar.

For me, we're already working on what the Bill is telling us. We start from a very good base in Caerphilly, and I'm more than happy to share some of that work, and we've done a lot of work on the foundational economy, which all links in to this Bill, obviously. So, for me, it is about joining up the legislation now, and I think like Ed has said, there will be those who are ready to hit the ground running and will be able to implement parts of it quite quickly, and there will be those that are maybe not able to do so. Maybe a piece of work between now and the Bill coming into effect should be how we get those that won't be able to hit the ground running into a better position, so we could direct some support, maybe, from Welsh Government and other bodies to help them get ready. But there shouldn't be a delay.

Liz has summed it up, really. There shouldn’t be a delay. There is so much good practice out there already and there are systems out there already as well; they just need to be applied across the board. So, there’s a guidance process to go through. Maybe the procurement centre of excellence needs to play a part in this, but I don’t think there should be a delay in this; it’s back to that cultural resistance.

Thank you for those responses. I just wanted to come back to something Liz mentioned about the strategic direction. I know that when we’ve spoken in other evidence sessions and then separately, as a regional Member, when I've spoken to other organisations, they have said the Welsh Government is very good at creating the legislation there that looks good on paper, but then, when it comes to the implementation of it, there are always concerns there. How confident are you, then, that once this legislation is implemented, that the continued help and support—and even guidance, to some extent—on what this legislation means will be there from the Welsh Government?

It’s absolutely vital, and Ed has just touched on it, in that there’s procurement ongoing at the moment for a centre of excellence for procurement within Wales. It's absolutely critical that that is delivered in Wales, for Wales, by Welsh people, I believe, so we’ve got to put the principles of this Bill into practice. That centre of excellence will be absolutely critical in working with the council and the sub-group on procurement that will be set up under this Bill, to join everything together and be able to deliver on the ground. It's absolutely critical.

I think there’s a policy implementation gap across Wales, across the board, and we do need to close that. And, for me, this legislation is—. Ideally, it would be done on a voluntary basis, but we've been working on some of these things for 15 to 20 years, on the whole community benefit, social value outcomes, and it hasn't happened consistently across Wales. For me, the legislation is a start again; it just puts that marker down, 'This is where we need to get to.'

11:20

Perfect. Thank you, Chair. So, with all of that in mind, to what extent are the proposed reporting requirements that the Bill places on public bodies through the legislation proportionate? And do they complement the reporting requirements already in place with the Well-being of Future Generations (Wales) Act 2015?

For me, it's easy for me to say this because I'm not working on the public sector side, but I think they are; they need to be, because without them and—it's back to the transparency again—without that, people can't be held to account for either the good stuff that they do or the not-so-good stuff. So, for me, yes, it's essential and proportionate.

Yes, I totally agree. I think that the reporting will highlight internally within organisations—. We report in Caerphilly every year, so there'll be no change, maybe the timings will be slightly different. But, for me, that reporting, going through the internal governance process of a local authority and then back into Welsh Government, is absolutely key because it raises the profile, it gives procurement the credence that it needs and the awareness, and it brings about the challenge before we're needing to get into any other serious challenges from other bodies, like you've talked about the powers earlier on. So, I think it's a good way forward.

Thank you. So, scrutiny of outcomes is key to delivery of the objectives that we are setting ourselves. Thank you for that. We'll send you transcripts of your contributions and obviously, I'd urge you to make sure that we have accurately recorded what you have said. Thank you, both, very much for your attendance. It's been a really interesting session; the contrasting views have been really interesting. And thank you very much indeed, both of you, for your time. 

The committee will now take a short break and we will resume promptly at 11:35 for our next scrutiny session with the voluntary sector. 

Gohiriwyd y cyfarfod rhwng 11:22 ac 11:35.

The meeting adjourned between 11:22 and 11:35.

11:35
4. Y Bil Partneriaeth Gymdeithasol a Chaffael Cyhoeddus (Cymru): sesiwn dystiolaeth 8—y sector gwirfoddol
4. Social Partnership and Public Procurement (Wales) Bill: evidence session 8—voluntary sector

Welcome back to the Equality and Social Justice Committee, and we're now going to take our eighth evidence session on the social justice and public procurement Bill. This session is with the voluntary sector, so I'd very much like to welcome Ruth Marks from WCVA and Kirsty Cumming from Community Leisure UK, who are joining us online. To start us off, Joel James is going to lead on the discussion.

Thank you, Chair, and thanks, everyone, for coming to this morning's evidence session. I suppose I just wanted to start with some general questions, really. I've asked this of almost all the other people who have come to deliver evidence: basically, is there a need, do you think, for this Bill that's not already been addressed in existing legislation? Ruth, do you want to go first on that?

Thank you very much indeed. Good morning to everybody and thank you to the Chair, Jenny Rathbone, for the welcome and invitation to be here today. Just to double check that colleagues are aware, before I come to Joel's question, that WCVA is the national membership body for the voluntary sector in Wales. We work in close partnership with the county voluntary councils that are active in every local authority across the country, and have been pleased to work with officials on the development of the Bill so far. We have been able to be an observer member of the shadow social partnership council for the past 18 to 20 months or so, largely in response to the partnership activity in relation to dealing with the COVID-19 pandemic.

Turning straight then to Joel's question, do we see a need for this legislation? In short, yes. We are positive about this proposed legislation. We completely support the goal of working in partnership to solve problems and find solutions to the economic, social and other challenges that face Wales. We also support a formal link between the sustainable development clause of the future generations Act and this Bill. I have a variety of other comments to make that will, hopefully, come out in response to other questions later on. Thank you very much.

Thank you, and thank you for the invitation to be here this morning and to give evidence on behalf of Community Leisure UK. Again, just following Ruth, to briefly introduce ourselves, we're a membership association for leisure and culture trusts across the UK, so we operate across Wales, England and Scotland, and we have 11 members operating across Wales.

I guess, going back to the question around the need for the Bill, again, our answer would be, in short, yes, we do see that there is a need for this Bill and very much support the principles and the vision that sit behind this in terms of driving towards more social value and a more socially responsible procurement, which is certainly very much the direction of travel and a real focus for our members. Thank you.

Thank you for that, Kirsty. Sorry about that, I don't know where I got 'Jennifer' from, so apologies for that. With that in mind, then, do you think that the objectives are quite clear as to what this Bill wants to achieve? I'm conscious, Ruth, you mentioned that you've worked closely on this, basically from its inception, but for the lay person, then, is this an easy-to-understand Bill? So, for someone like an SME that's looking for procurement contracts, is this going to do what it says on the tin, I suppose?

Very good question, and I think a question that we probably all ask of any legislation in development or any policy in development. I'll just make one reference back to some of the learning and reflections that voluntary sector members, charities, social enterprises, community interest companies, voluntary organisations, mutual aid groups and so on have made to us over the last couple of years. Really, the best solutions and the best focus on activity for change and development and improvement happen locally. National developments should always be there to support rather than to smother. If I put myself in the shoes of the chief exec or a director of a small or medium-sized enterprise—as we all know, the backbone of the Welsh economy—but if I also put myself in the shoes of a director or a chief exec of a voluntary organisation or charity that provides services to the public in Wales, of which there are many—I’ll come on to some stats, hopefully, later on—the principles about working fairly, the principles about paying the real living wage, the principles around procuring fairly, I think, should be clear, and the Bill and hopefully then the legislation in practice will do exactly as it says on the tin, especially as there is the possibility to integrate this work really firmly with other groundbreaking legislation that we have on the statute book in Wales. I’ll quote just a couple in finishing.

One is the fact that Wales is the only country in the UK that has a third sector scheme. We are the envy of all our other partner agencies across the UK. The requirement and the opportunity for the voluntary sector to liaise with Welsh Government, with Ministers and with officials across every ministerial portfolio is unique across the UK. In our opinion, the ambition behind the social partnership Bill helps reinforce that partnership with the voluntary sector. And then the well-being of future generations Act, the principles of sustainability, and the links to a globally responsible Wales, I think—and in conversation with our members, who responded to our consultation requests on this work—all lead to huge opportunities that help reinforce other legislation and policy developments in Wales. I realise that was a bit long, possibly, but hopefully it was a fulsome answer to Joel’s second question. Thank you.

11:40

No, that was perfect. Don’t worry about the length of any response, really. Thanks ever so much. Kirsty, is there anything you might want to add?

Ruth has very clearly articulated some of the points. I certainly support everything Ruth has just said. I guess in terms of the understanding of the intention and the principles, I think it’s very clear and quite accessible, certainly from the perspective of our members, in terms of what the Bill is trying to achieve. I think that what we need to consider is the implementation and the practicality on the ground, how this will actually translate from policy into practice. We’ve seen quite a lot of really positive steps in terms of legislation, but again, it’s actually translating those into the current context and current landscape for our members to be able to enact them, and to work with local authority partners and key partners at a local level, ensuring that the translation from national to local actually transpires in a consistent and coherent way across Wales. I think that will be really important as well; obviously, having a national approach is positive, but our members really very much work at that local level. All their contracts are at a local level, so it’s how this Bill will actually translate down across local authorities, across health partners, and everyone that our members have been working with at local level, and making sure that those principles are as strong as they are at a national level.

I think there’s always a risk when things like this are processed and thought through that things might become almost a tick box when it’s translated into practice, and I think that’s the risk that we really want to avoid—actually having meaningful change through this Bill, and making sure that when we are talking about social values, socially responsible procurement, understanding what does that mean. I think some of these terms can be open to interpretation as well, and different interpretations according to different priorities, which is absolutely right and proper, but it's ensuring some degree of consistency and clarity right across the country that I think will be important if we want to achieve the outcomes that the Bill really is trying to set out to achieve.

11:45

Perfect. Thanks for that. I suppose that brings me on to my last question. You mentioned how this Bill translates down the chain, as they say, so with that in mind, how would you rate the success or failure of this Bill, then? What sort of outcomes would you want to see, and—if I just look at my notes again, then—what would be the overall objectives, do you think, in terms of enhancing well-being? I'm conscious there are a lot of questions there, so sorry about that, but basically, how would you rate the success of this legislation? I know, for example, when we questioned the Deputy Minister, the Deputy Minister said the key would be to increase transparency, and that was touched upon in the previous evidence session, about how transparency leads to better outcomes, but I was just wondering what your views were there, in terms of how you would rate the success of this. 

Shall I run at that first, briefly?

Thanks very much indeed, Joel. Thanks, Kirsty. I think that some of the outcomes that we would be interested in tracking and contributing towards would be greater engagement of employees who are members of trade unions and employees who are not members of trade unions, having a connection to those principles of social partnership. The real living wage is important to name-check again here, because we feel that there's a potential disconnect—possibly unintended, but a disconnect at the moment—as regards a clear link to the real living wage in the Bill.

Then there's the recognition of the voluntary sector as an employer. The WCVA data hub, worked on in partnership with Data Cymru and the Welsh Local Government Association, and with a close connection to the Charity Commission for England and Wales, details that the voluntary sector in Wales accounts for approximately 10 per cent of employment in Wales. That's almost 125,000 employees, and almost half of those are employed in health and social care, so we feel that there would be good ways to work with partners in the care and health sectors to track benefits.

My final comment would be in relation to wider community benefits and seeing whether that whole—. As you were saying, Joel, building on Kirsty's point as regards driving down to a local level: is this having a difference for people in their communities? Has local procurement and the circular economy developed as a result of this Bill? Are we making decisions that are closer to people in their communities that have a positive benefit for them? And linking to the other legislation, as I mentioned earlier. Thank you.

Kirsty, did you want to add anything? You don't have to repeat what Ruth has said if you agree with that, but if there's anything you want to add. Otherwise, I will move on to the next Member who wants to ask questions.

Diolch yn fawr iawn ichi am ddod y bore yma. Mae'n braf eich gweld chi.

Thank you very much for joining us this morning. It's lovely to see you both.

Just starting to look at the impact of the Bill on the voluntary sector, what impact do you think the Bill will have on the voluntary sector—and you've mentioned it earlier—as both an employer and a provider of public services? Do you think you will have sufficient opportunities to influence the delivery of the Bill? And you've said that that relationship is the envy of the UK countries, so maybe you could elaborate a little bit on that, and how you have helped to steer this Bill to this position. Maybe Ruth first.

Diolch, Peredur. Thanks very much indeed. It's good to see you as well. There's the fact that, currently, there is an opportunity for, I think, one voluntary sector place on the social partnership council, whereas in the original documentation, there was no specific place, potentially, going to be allocated to the voluntary sector. Obviously, one is better than none, but certainly, among members of WCVA, and in very brief discussion with Kirsty earlier on this morning, I think there's concern that the representation and the sense of being valued is great—thank you very much indeed; the sector would always want to be valued—but the point about equality is one that I would reference. Certainly, I think in understanding some of the evidence that you've taken previously from the Bevan Foundation, I would be interested in further discussion with the Bevan Foundation and officials and you regarding the benefit of independent policy perspective in relation to the social partnership council. Also I think we share a concern with the Bevan Foundation and possibly trade union colleagues as well as regards the social housing sector. And with the social enterprise sector, and specifically Cwmpas—formerly Wales Co-operative Centre—there is a huge wealth of experience and reach that those organisations and their members would have to actually deepen the take-up, the understanding and the engagement with this legislation.

As a provider of services—I know Kirsty will have some points on this as well—the principles of procurement and commissioning have been for a long time and will no doubt continue for a while to be challenging for the voluntary sector as a provider of services. In mentioning the third sector scheme, an important pillar of the third sector scheme is the funding code of practice. It is absolutely vital that this legislation is completely aligned with the funding code of practice, and also the recently refreshed national principles of public engagement, which Welsh Government have recently endorsed. And of course, engagement with any new legislation does come with resource implications. I'll stop there to let Kirsty come in, Peredur. Thanks.

11:50

Thanks. I guess I would very much echo the point around representation and the voice of the voluntary sector. But I think for us, it goes beyond that. The voluntary sector is hugely important, and obviously our members are very much in that space, but it's also around actually hearing voices from different sectors. Culture and leisure is obviously the sector that our members are operating in, so it's ensuring that the voices of those organisations that are providers of public services and employers are heard in some of the challenges, particularly as we're coming out through the recovery phase of the pandemic.

The landscape is incredibly challenging, so it's making sure that there's recognition of the voluntary sector more broadly, but also within that, the different sectors that are within that, and understanding the differences and the challenges. I think also, picking up on the point around public services, there's the fact that our members, similar to Ruth's point again around charitable organisations, are either charities or social enterprises and everything that they do is in essence for public benefit, so there's inherent social value in every single thing that our members are doing and there really needs to be a recognition that it's not something that's an additionality on top of their work or an add-on.

There really needs to be more recognition of the inherent social value that sits within the charitable sector as the core purpose and driver of everything that these organisations are doing. Because, just touching on the point about impact on employers, again, it's very specific to our members, but the landscape, as I mentioned, is incredibly challenging as we're moving out of the pandemic. It's a very fragile position, with challenges around recruitment, retention of staff really coming to quite a critical point for the delivery of some services.

I guess coupled with that, we've got other challenges such as the energy crisis escalating operating costs. So, there is absolutely a commitment across our members to the principles of fair work, but with recognition of the challenges that sit behind that in terms of the ability to recruit and retain staff, against, obviously, a very financially challenging backdrop as well. So, for me, there's a bit here around recognition of the sector, of the different voices, the social value that's absolutely built into everything that our members are doing, and also just recognising that the current landscape, the post-pandemic landscape, and what that might mean in terms of the resource and headspace for organisations to actually implement and take account of the changes that are being proposed in this Bill. So, I absolutely support it, but maybe just a slight cautious note around headspace capacity to actually implement this in the fullest way across both our members and other public bodies as well.

11:55

Thank you. And following on a little bit from that, maybe to you, Kirsty, first, and then back to Ruth. Talking about the impacts, the financial and the resource impacts, of this Bill on the voluntary sector, do you think that's accurately reflected in the regulatory impact assessment that's been conducted, which goes alongside? Kirsty.

I think we were—. We do think that there are finance and resource impacts. There will be an impact. I guess this links back very much to the point around the current context, the current landscape, for members in terms of resource implications. I think what we really want to ensure doesn't happen—and this probably picks up on an earlier point around the translation from policy into practice—is not creating unnecessarily onerous processes that organisations will have to go through. It's looking at the principles and how they can be applied in a way that delivers maximum benefit, without it becoming an onerous and complicated process to understand or to actually engage in as a procurement process. So, broadly, we are supportive of the implications and the impacts, but, again, just with that slight cautionary note around particularly the current landscape.

Ruth, is there anything you wanted to add to that, or can I move on to the next question? Yes, no problem.

Just two very quick, brief points, Peredur. One is that we'd like to see that the Bill ensures that Welsh speakers are able to access public services in their chosen language. There's obviously an opportunity for the Bill to do this, but we didn't find it explicitly mentioned. And there's a point that I'd like to make, probably later on, in relation to potentially unintended consequences in relation to equality impacts, but we'll probably pick that up later. Thank you.

Okay. Thank you. And finally from me on this section, what support do the voluntary sector organisations need to help them to understand and implement the changes in the Bill? We've heard from different businesses, we've heard from different bodies, and some are further down the line than others. But thinking of, especially from yourself, Ruth, your members, how much support do they need? You probably see that some are way ahead and some are way behind. Can you quantify that, or put some thoughts around that?

Thank you. I'm not able to quantify it at the moment, I'm afraid, but just a couple of thoughts. Firstly, I'd like to acknowledge the support and the principles of working in partnership with officials so far. There have been very useful briefings provided to the sector, and we'd certainly like to continue to work with officials to build on those, as the timetable moves forward, being able to provide information, obviously, in accessible formats, and being able to make that as real as possible. So, giving scenarios that people can relate to in local communities, and telling those stories as regards the positive impacts that the legislation has ambition around, but also providing space for open and honest constructive criticism and feedback in order to improve the way in which the legislation lands and develops.

Thank you. Kirsty, I don't know if you've got anything to add to that. That's fine. That's me done for that section.

Diolch yn fawr iawn, Cadeirydd. Dwi am siarad yn Gymraeg.

Thank you very much, Chair. I do wish to speak in Welsh.

I'm going to speak Welsh.

I wneud yn siŵr eich bod chi'n deall hynny. Dwi eisiau gofyn am y cyngor partneriaeth cymdeithasol. Bwriad y Llywodraeth yw datblygu'r cyngor yma. Y cwestiwn cyntaf gen i yw: a ydych chi'n glir am bwrpas y cyngor? Hefyd, a oes gennych chi farn ar aelodau'r cyngor? Dŷn ni wedi clywed, er enghraifft, fod gennych chi gonsérn ynglŷn â thangynrychiolaeth ar y cyngor, felly, beth ydy'ch barn ynglŷn â'r cyngor a'r aelodau hefyd? Diolch yn fawr iawn. Efallai, Ruth yn gyntaf. Diolch.

So, we'll just make sure that you can receive the interpretation. I wanted to ask about the social partnership council. The Government's intention is to develop this council. The first question from me, therefore, is whether you're clear about the purpose and objective of the council. And, do you have a view on the membership of the council? We've heard, for example, that you have concerns regarding under-representation on the council, so what is your view on the council and the membership too? Thank you very much. Perhaps Ruth, to begin with. Thank you.

12:00

Diolch, Jane. Thank you very much indeed. I believe that, as Peredur said a moment ago, some members of the WCVA and some members of the county voluntary council networks across Wales—community groups and so on—some will be aware of the development of the social partnership legislation and the proposals with regard to the social partnership council, but many will not. We will, obviously, work on a continual information exchange and communication exercise around that, but certainly, as the national membership body, we're clear on the purpose and the ambition.

Yes, we have got some concerns about membership, but we also understand how difficult it is to corral a mixed group of interests, and so on. So, we really welcome the fact that there is one place. We would certainly like to discuss the opportunity for wider membership, and if that is not possible, I think the alignment between the social partnership council, as conceived, with the third sector partnership council and also with the partnership council that the Welsh Government hold regularly with local authorities, again, that the voluntary sector has an opportunity to be involved with that as an observer. I think it's the alignment between all those different councils and ways of working that we can, I think, perhaps quite often, overcomplicate for a country the size that we are, but coming from the right place—we're looking for good engagement, we're looking for good discussion and so on.

But the final point I'll make is that seeing a firm commitment to co-production as part of the voice and participation principle in the legislation would be a really, really positive change, if that was deemed appropriate. Thank you, Jane.

Diolch, Ruth. Thank you. A Kirsty, oes gennych chi rywbeth ychwanegol?

Thank you, Ruth. And Kirsty, do you have anything to add?

Thank you. Yes. I guess, again, very similar—I feel like I'm almost echoing Ruth throughout this evidence session. We're very clear on the intents and the ambition of the partnership council, but again, the concerns we have are very similar around the representation, particularly, as Ruth has mentioned, the voluntary sector. But again, I come back to the previous point that it's around understanding the differences across different sectors, so whether there's an opportunity to engage with representative bodies, again, without overcomplicating the landscape. But it is important that we hear voices on behalf of different parts of the sector and organisations that are equipped to represent those voices to make sure that we have a balanced view going in, whether that's on the council, or whether that's through another mechanism, kind of making sure that we have the opportunity to feed into those discussions.

Diolch yn fawr iawn. Diolch yn fawr iawn, Cadeirydd. Dwi'n meddwl eich bod chi i gyd wedi cyffwrdd ar y pethau yr oeddwn i eisiau'u gofyn ar ôl hynny, felly, diolch yn fawr iawn. Yn ôl i chi, Cadeirydd. Diolch yn fawr iawn.

Thank you very much. Thank you, Chair. I think you've touched on the issues that I wanted to ask about as follow-up questions, so thank you very much. Back to you, Chair. Thank you.

Okay. I just want to have a look at—. A lot of public bodies face wicked issues that are very difficult to resolve. Do you think that the Bill is going to encourage the voluntary sector to be involved in procuring services that might be better done in a new way, given that they are so difficult to resolve? You mentioned, Ruth, that, obviously, a large number of health and social care services are delivered by the voluntary sector. What, if anything, will this Bill do to encourage more thinking outside the box?

12:05

Thank you very much indeed, Chair. In conversations with members so far, I think that we have a shared ambition that the principles around fair work and procurement changes, as outlined in the Bill, have got a real opportunity for the sector, provided that—and I'm just going to come back to repeat some words, apologies, that I used earlier on—provided that the sector isn't just seen as a valued partner—and I would never want to not be seen as a valued partner—but that point as regards an equal partner. The sector is absolutely geared up to working with people and working with communities who, for whatever reason, are sometimes not trusting of or don't feel supported by other providers of services, and therefore, that unique space that the voluntary sector has—whether constituted as a charity or as a social enterprise, or as a result of a community asset transfer and employing people in a local community, a hub facility of a community shop or a pub or a post office in a local area—for people being engaged in a fair and responsible way, and their voices being heard, hence just reinforcing that point of co-production, is something where I see real, real opportunity with the proposed legislation.

And the link in terms of your reference, Chair, to the voluntary sector and members who are active in the health and social care space, then drawing that connection to other areas of priority across, I'm sure, all Members of the Senedd and Welsh Government, as regards the foundational economy and circular economy, and the focus there on health and social care, we're talking about fair work with this proposed legislation, but fair care and people being supported to actually express what they need in any given situation as regards their care package—at home, in their community, not in a hospital ward—and being able to have that at every moment of life and at every point of transition. So, making this legislation work for children, for young people, for people who are out of work, for people who are in work, for people who are retired, for that whole life course, this legislation, in my view, has got such good potential for connectivity to the future generations legislation and to other ways of working in Wales. But, coming back to that, local, to community benefit and to the principles of co-production.

Okay. And you mentioned earlier in your remarks about the link with the global responsibilities that we all have, if we're subject to the well-being of future generations Act, and yet we've had some correspondence from other organisations saying that this isn't specifically mentioned in the draft legislation. I wondered if you think that is a requirement or whether that'll be picked up anyway, because all these public bodies obviously have to comply with the well-being of future generations Act.

Well, just briefly, I think any opportunity to reinforce should not be lost. So, just the fact that, yes, it should be, and it will be picked up for the sake of a couple of extra lines or a couple of extra references, I think it will be well worth making explicit—yes, it's there implicitly, but making it explicit would certainly gain our support.

So, Kirsty, would you welcome—would your organisations welcome—seeing something that prevented your members from sourcing one of the products you were going to use from an organisation that was using slave labour, for example?

I mean, absolutely, and our members have moved very much towards local supply chains, where possible, and also just being far more aware of the responsibility in terms of resourcing, whether it be about equipment or supplies. So, there is much more focus on the local economy, and also recognising the impacts on the local economy, as well. So, I think, certainly, we would welcome that very much.

The only thing we would obviously flag is there are some suppliers, particularly for our sector, where there is a very limited choice. So, if you look at things like pool chemicals, for example, there's not a choice in terms of local suppliers, and some of the equipment and particular things that are required to operate businesses will be from non-local suppliers because of the nature of the business, so it's a matter of, where possible, really focusing on local supply chains.

12:10

Thank you. I'll pass over to Peredur Owen Griffiths, who's got questions on this.

Thanks, Cadeirydd. Just on that point, before I move on to another section, how good are your members or you at measuring your supply lines and looking further down the line to make sure that some of the aspects that Jenny mentioned, like procuring from a company that, potentially, does slave labour—? How good is the sector at looking at that element? Ruth—

—or Kirsty. Either/or—sorry, whoever wants to answer first. I think Kirsty started first—there we are.

Sorry, Ruth, I jumped in there. I think it's an area, obviously, where our members are quite strong. There's been a real recognition of looking at aspects such as living wage employers within the supply chain, recognising, again, the wider economic benefits that our members have an opportunity to influence. I know most of our members have some form of catering hospitality within their businesses as well, so, again, looking at locally sourced produce where possible and understanding the best local suppliers for the produce.

In terms of slave labour, it's not something I think that there's any issue at all with within our sector. I think we're quite fortunate in that regard, but there's certainly quite a lot of due diligence, and really, I think, in recent years we've seen an increase in the awareness of local and really moving towards lot more of a local focus, understanding their place as community-based organisations and what that means in terms of supporting local economies, which I think is really important.

Just briefly to follow on, Peredur, I think that some of our members and some organisations active in the voluntary sector in Wales are very good at impact measurement, but most of us would probably say that we're on a journey and that we have got more work to do in that space. But I would certainly just like to name-check one of the county voluntary councils active in north Wales, Mantell Gwynedd, who are leading a very effective partnership across the third sector infrastructure in Wales in relation to their leading-edge work on social value and measurement that they've been doing now for several years. That's an area that many members of the voluntary sector are looking to for their advice and support in working out how to measure the impact and the difference made by investment in the voluntary sector, and whether that work or activity, undertaken by paid employees or, of course, undertaken by volunteers, is properly regarded and properly evaluated. Diolch.

Thanks for that—a little segue into something else, so thank you for indulging me there. With regard to public procurement, then, to what extent are the proposals related to socially responsible public procurement likely to deliver tangible benefits? Is legislation the best way to do it, and, touching on what Ruth just alluded to there, how do you measure that social value involved? That's in three parts. You're smiling, so I'll come to you, Ruth.

Just in terms of those three parts, Peredur, sorry, could you run through those again?

Tangible benefits and how you measure them, I suppose, are two parts of it. And then, is legislation the best way of doing it?

So, I think that there will be tangible benefits if the local supply chains—the point that Kirsty was making earlier—are able to see these through. Something that we haven't mentioned so far in this session is the link to the private sector in relation to corporate social responsibility, and that opportunity to see where businesses take their CSR seriously, and how that can be best engaged locally, regionally and nationally. Indeed, of course, there may well be lessons across private, public and voluntary sectors where working together, where actually co-producing impact measurement might be an interesting consequence as this work goes forward.

12:15

I know you've touched on a lot of this before, Kirsty, but is there anything you wanted to add before I move on to the next section? 

I think, just briefly, a couple of points. I guess, in terms of the tangible benefits, I think there are opportunities, and it comes back to previous points around implementation.

In terms of measuring social value, I think our members are on a journey, I suppose, with this area. There's been quite a lot of work around understanding social value and articulating that. But I think the next step is actually articulating social value in a way that resonates with the people, with the correct audience. So, there's been a lot of reports and a lot of really good stats that have come out from our members, and they can really prove significant amounts of social value. But, actually, what does that mean to the audience that they're trying to really make that case to, whether that be local authority partner or other organisations at a local level, or whether that be national organisations? So, there's still a missing piece, I think, in terms of understanding social value and, again, different interpretations of what social value might mean. So, there's a missing link somewhere in terms of reports and actually getting the impact and recognition that they are a hoping for.

And I guess the third part around legislation, certainly from my perspective, is something around procurement being one part of the commissioning process. So, really, if we want to drive real social value right through that process, it needs to start at the commissioning level, and procurement's very much one avenue and one tool in terms of delivering that. So, there probably needs to be a slightly wider focus at some point around the wider commissioning process and understanding where that link is between commissioning and procurement to make sure that we can really embed social value in the most meaningful way.

Thank you very much. And, Kirsty, to you, in the draft Bill consultation response, you said that procurement must move from a process-driven approach to a purpose-driven one. To what extent do you believe that the procurement elements of this Bill will enable this, and why? I think you've touched on some of that, but maybe you'd want to just elaborate a little bit.

Absolutely. Thank you. So, really, the move from process-driven—. What we have seen, traditionally, is really a focus on price and cost as being the main driver through a lot of the procurement process. So, really moving much more towards understanding the outcomes, better alignment with outcomes and who's best placed to help achieve those outcomes, I think, would be quite a significant step forward. The Bill, I think, is certainly going in the right direction to help with that and really bringing up the level of importance around social value, which I think is key to making sure that we move towards purpose driven.

I think one of the things that we really need to understand as well is the difference between cost and value when we're looking at procurement—so, understanding that, actually, it's not necessarily going to be the cheapest option but it's going to deliver the most value, and that social value piece is where that comes in. So, there's probably an education piece and almost a permission, I think, for those that are in the process of procuring services, to understand that, actually, it is possible to go for something that is more expensive because it will deliver better outcomes in the longer term. So, I think this Bill will help support that mindset, and it is very much a step in the right direction, but a lot of it will, I guess, be proof in the pudding as to how, in reality, that translates into practice and how people can change. There's an element of behaviour change in this, particularly for procurement officers as well, to move away from perhaps taking on a degree of risk or perceived risk when they're looking at procurement to understand social value, where that fits and the cost that sits behind that as well. So, there's probably a bit of a learning curve that we need to go on as a whole society in terms of actually being able to embed this in the most meaningful way.

12:20

Thanks. I don’t know if Ruth wants to come in on that—no, you’re fine with that. It would be interesting to understand how that journey could be replicated across the sector, and maybe, Ruth, you’re in a better position to help share that best practice across some of the sectors as well, so it’s that collaborative approach. But I won’t go into that now. The last point from me: do you think that the list of public bodies covered by the socially responsible public procurement duties is sufficient, and, if not, would you want to add somebody, or take somebody off? I’ll maybe come to Ruth first.

Thanks very much, Peredur. The only body that we’re aware of that we don’t feel has been included that should be is the future generations commissioner.

Thank you very much. Kirsty, anybody else to add? No. There we are. Thank you very much.

Thank you, Chair. This is a question first of all to Community Leisure. As a representative body of organisations who employ workers whose roles and functions have been outsourced from the public sector quite widely, how effective would you say that the outsourcing of public services duty in the Bill is likely to be?

Thank you. That’s a good question. Obviously our members, as you said, are delivering services on behalf of their local authority partners, so we certainly hope that the Bill will improve the situation for members, particularly when it comes to, as I said earlier, demonstrating the social impact and the value that they provide. So, I think that there will be a positive change once the Bill comes into effect, and really will, I guess, echo the message our members have already been saying for quite a number of years around what it is that they do and the fact that they are charitable organisations with social value at their core. So, this will help reinforce and, I guess, implement that message, and help in terms of the process that comes with procurement of contracts, et cetera.

I suppose the only note of caution, again, comes back to the fact that they are all charitable organisations, so it’s very much, I guess, a call for any procurement of outsourced services to really be based on the needs of communities. Who is best placed for delivery of those community services, and really aligning with local outcomes and impacts? If we focus on that, and move away from focusing on whether it’s insourced or outsourced, then I think we will see benefits in terms of the delivery of public services.

Thanks, Kirsty, that’s really helpful. A question to both you and to Ruth: the Bill gives Welsh Ministers regulation-making powers to create additional contract management duties. Do you think any further duties should be prioritised at this stage, or indeed in the long term, for that matter? Perhaps Ruth first.

I’m not aware of any at the moment, Ken.

Likewise, I’ve got nothing to add at this moment.

Okay. Just lastly from me, obviously the voluntary sector is great at galvanising citizens to volunteer. How are you squaring the circle, do you think, in the context of public procurement, so that there’s clarity about paying people for doing a job of work without stifling voluntary activity? Ruth, do you want to start off?

Yes, I’d love to, and I’m keeping an eye on the clock as well, Chair. That's a really good question. We’ve got a memorandum of understanding with Wales TUC in relation to being very, very clear that voluntary roles are exactly as they say on the tin, but that the opportunity for the sector to be seen as a valued and equal partner as an employer where charities, social enterprises, community interest companies, and so on, are able to and choose to employ staff is one that we want to work with all partners on. We’ve got some very interesting work going on at the moment, especially supporting people who are furthest away from the labour market—programmes around volunteer to career, and those are both active in the health and social care space but also in the green economy space as well, and have a range of experience in previous employment support programmes, going back, of course, as many decades as the old Manpower Services Commission and then right up to date with the Kickstart programme.

I think that the importance of ongoing communication and demonstrating impact, and demonstrating the value of the voluntary sector being involved in sourcing activities, solutions, products, services in a local community that meet that local community's needs, whether those are driven through paid staff, whether those are driven through volunteers, or a combination thereof, that's something that is obviously a unique space for the voluntary sector.

And the final point I'll make is that the one concern that we have, which I certainly think is potentially an unintended consequence, is in relation to the level of trade union membership in Wales currently and the focus of the Bill on employers and workers' representatives, rather than on people and on people who use services and people who provide services and so on. The potential lack of equity there is something that would be good to possibly further discuss with officials as this work progresses, because I realise that I'm against the clock at the moment. Thank you, Chair. 

12:25

Thank you very much for those comments. Kirsty, is there anything you'd like to add on any of that? 

I think just very briefly to add, on the distinction between the volunteering and the paid employment roles, there's obviously a need for both right across our members in a whole range of different capacities, but what's interesting, I think, at the moment is there's quite a wide piece of work that we're undertaking through Community Leisure UK to really understand more around what constitutes a positive volunteering experience. So, it's almost—[Inaudible.]—our members—[Inaudible.]—the traditional view of where they volunteering roles to support business to actually understand what is it a volunteer is looking for, and really reshaping. So, we see a lot of reshaping of roles around that, and a lot more co-production with the community to understand what volunteering roles would be suitable and actually provide benefits, whether that would be for, as Ruth has mentioned, training, moving towards getting into career opportunities, or whether it's more social or more personal reasons, or whether it's for health and fitness reasons. There's a whole range of reasons as to why people volunteer and understanding what those are and really reshaping roles accordingly I think is a really positive step.  

Thank you both for that. We will send you a transcript of your contributions, and please take the opportunity to ensure that we have accurately captured what you were saying. Otherwise, thank you very much indeed for your contributions—extremely useful—and thank you very much for your time. 

The committee will now take a break until 13:30, so if Members could come back just before 13:30, when we will continue with our next session, also on this, scrutiny of this Bill. 

Gohiriwyd y cyfarfod rhwng 12:28 a 13:30.

The meeting adjourned between 12:28 and 13:30.

13:30
5. Y Bil Partneriaeth Gymdeithasol a Chaffael Cyhoeddus (Cymru): sesiwn dystiolaeth 9—melinau trafod ac academyddion
5. Social Partnership and Public Procurement (Wales) Bill: evidence session 9—think tanks and academics

Welcome back to the Equality and Social Justice Committee. We're going to have a further scrutiny session—session 9—on the Social Partnership and Public Procurement (Wales) Bill. We have three eminent professors who are experts in procurement: Professor Alan Felstead from Cardiff University; Professor Edmund Heery, emeritus professor at Cardiff University—welcome—and Professor Lydia Hayes at the University of Kent, who's joining us online. So, welcome, all three of you. If you could keep your answers relatively brief. You don't need to say, 'And I agree', but obviously please do come in if you disagree or you want to add something to what somebody else has said. So, Joel James is going to start us off.

Thank you, Chair, and thanks, everyone, for coming in this afternoon. I suppose I just want to start off with the general questions, really. I've asked this in all the other evidence sessions. We've heard how a lot of public organisations have already started to implement social partnership policies within the work that they do, so do you see that there is a need for this Bill that's not already being met—you know, non-statutory, as they say? And is this the right way of doing it? And also, I suppose, the third question with that, then, is: are the objectives of what the Welsh Government is setting out to do clear, and do you think the layperson would understand, if that makes sense? Professor Felstead, do you want to start first?

Yes, thanks a lot for that question—three questions there, actually. The first one about need, absolutely I think there is a need. As you mention, it's non-statutory, the partnership arrangements that have taken place to date, and a statutory footing would give a firm basis to all of that good work that's gone on and can be built on. So, I think there is absolutely a clear need, and it obviously relates to building an economy based on the principles of fair work, which is part of the Welsh Government's programme for government until 2026, so it fits in very much with that. It also builds on—. Ed Heery and I were both on the Fair Work Commission. It builds on the evidence and the recommendations that were given to the Fair Work Commission, so it's based on solid evidence as to the need for such a statutory underpinning.

In terms of clarity—is it clear—I think I've said in my written evidence, as you've seen, that there are some elements where I'm not sure it's as clear as it could be, and maybe this is something we can discuss further. But insofar as it goes, yes, it is clear, but there are elements where I think greater clarity might be needed, and I pointed particularly to fair work and its role in the Bill, particularly how it's changed from the draft Bill in February 2021 to the tabled Bill in June of this year, 2022. It's changed quite significantly. So, I think there's some pressing to be done there from this committee, maybe, or maybe you've heard the evidence of other people as well that might have made these points, but I think there's something to work on there in terms of greater clarity.

I'd like to add a couple of points, particularly on need. I think if the right to be consulted is inscribed in law, then I think it's more robust, less contingent, dependent, on the wishes of a particular administration or set of Ministers or branch of the public service. So, it's a consolidating measure, I think. I think it also has important symbolic value in inscribing the principle of social partnership in law, I think, demonstrating to the Welsh public more generally that this is the objective of the Government. I would echo what Alan has said as well about evidence and refer to two bodies of evidence that support the case for legislating on fair work. I think one is there's quite a lot of evidence that countries that have this kind of arrangement in place have dealt with crises in the recent past quite effectively. In particular, countries with social partnership arrangements I think responded in a way to the financial crisis in a way that protected the interests of employees and I think promoted the resilience of their labour markets.

And I also think there's good research on social partnership arrangements within the UK public service that indicates that this is a good thing. There was excellent research done by a colleague at City University London, Nick Bacon, on the partnership arrangements in both the Welsh and Scottish NHS, which indicated that, if you like, they worked at a process level. Clearly, the employers and employee representatives had difference of view, but they worked collaboratively and the outcomes from the process were significant in that it influenced the strategic direction of how the NHS changed or evolved in the two countries, particularly moving away from an internal market to a different governance arrangement within the NHS. So, I think there's evidence that supports legislation along these lines.

13:35

Thank you, Professor Heery. Professor Hayes, anything you might want to add?

Yes, thank you. I'd like to add to what Alan and Ed said that the purpose is sustainable development and linked to the Well-being of Future Generations (Wales) Act, and that in itself is statutory, and therefore I think that there is a strong case for this to be statutory, because of its connection and its furtherance and enabling of those statutory objectives and duties in relation to the well-being of future generations. There's also an important rigour that comes with giving statutory status to this kind of an arrangement. Now, I think it's very important to recognise that, having statutory arrangements for social partnership within this Bill, it is limited; it doesn't prevent non-statutory arrangements, voluntary arrangements, from being set up or from continuing, and I would think that the social partners, the Government, would like to see successful voluntary examples of social partnership taking place wherever social partners think it's relevant to set those up. But this, with its emphasis on the social partnership council and this stressing of the importance of the well-being of future generations objectives gives that rigour, that seriousness, to what is pursued here, and we can already see that initiatives have taken shape for Welsh business, for workers' organisations in Wales, to organise themselves more strongly to ensure that there is good representation through these mechanisms, and so, for example, the initiatives like a Welsh business council emerging. We can see that, because this is collective, it has an impact on the strength of the ability for various different views to come together through structural organisation across employers, workers' organisations, the voluntary sector and the other groups that are to be part of the social partnership council and so I think that those are the reasons why the statutory form is so important in this instance.

Perfect. Thank you, Professor Hayes. I suppose with that, then, I just wonder if I can touch upon something, Professor Felstead, you mentioned about changes in terms of the draft legislation and what's being proposed now. I know from your written submission you mention that they've

'inadvertently weakened the levers Welsh Government can use to make Wales a fair work nation'.

I was just wondering if you can just go into a bit more detail as to what you mean by that, if possible.

13:40

[Inaudible.]—I think that was the important point. As a researcher in this area, I certainly looked closely at the original Bill in February, and there was a whole part devoted to fair work, clauses 4, 5 and 6, with a fair work duty, fair work reporting and a fair work definition. And notably, that part has been removed. Now, I understand why, I think, in that it's being embedded within the future generations Act, but I think it has the potential to weaken the importance of fair work, given that the aim is to build an economy based on the principles of fair work. It's often said that what gets measured gets done; I would add 'what gets defined gets done'. There is not a definition, and I think that can, therefore, weaken the ability to push that agenda forward. That may be to do with competence in this area, I understand that, but it's notable that there has been a change, and, as a scrutiny committee, I think that's something to follow up—to ask why the definition, duty and reporting aspect of the original Bill is no longer there, and we've had a substitution of decent work for fair work. And a prosperous Wales includes a number of items, and I counted, I think it was seven items. There was innovation, raising productivity, becoming low carbon, developing a skilled and educated population, generating wealth, increasing employment opportunities and, the seventh one, providing fair work. That's quite a crowded goal, and so there is a issue, I think, in terms of how fair work will fare—excuse the pun there, spelt differently, of course—in a crowded field. And so, I think it's that that I'm more cautious about, maybe even worried about, maybe even anxious about.

[Inaudible.]—I'll bring in Mike Hedges, who I know has some questions on this, and I'll come back to you on the other.

I'll make sure I'm—. The host has unmuted me, thank you. I believe I'm asking questions on fair work.

Okay. I've heard your answer. I think the words 'fair work' are one of those difficult ones. We all have a different definition of fair work, don't we? I've written and spoken regularly about ending exploitative contracts. The Bill has replaced decent work with fair work as something that public bodies must consider. It does not define fair work. Should there be a definition of fair work within the Bill, and, if so, which one would you suggest?

Well, I'd suggest the Fair Work Commission's definition. The Fair Work Commission was set up, as you know, I'm sure, in 2018, and it reported in 2019. And one of its tasks was to develop indicators and definitions of fair work, explore the development of levers to promote fair work and, thirdly, suggest steps, including legislation, to make Wales a fair work nation. So, the first one there was definition, and the Fair Work Commission came up with a very clear definition, which is—where is it now—

'Fair work is where workers are fairly rewarded, heard and represented, secure and able to progress in a healthy, inclusive environment where rights are respected.'

There are six characteristics to fair work that were outlined in the Fair Work Commission report. It's not there in the Bill, and that is something that I think is possibly troubling in that it's difficult to know how organisations are going to achieve fair work when the definition isn't provided. Having said that, though, in other Welsh Government policy documents, fair work is defined. For example, in the recently published employability and skills plan, fair work is frequently mentioned, and it's actually precisely defined on page 32. It's also in the Business Wales pages on the economic contract, where it is defined, and the six characteristics are outlined. So, there are two places where it is actually specified. And I think it needs to be—. The definition and the characteristics need to be frequently outlined by Welsh Government, so that organisations are clear as to what they're expected to do, and what the principles of building an economy, based on the principles of fair work, are. Because if it's not defined, I don't know how it's going to get done.

13:45

Just a very quick rider to that is to make the point that the report of the Fair Work Commission, including the definition, was accepted in total by the Welsh Government, but also by the social partners who were consulted at the time—Wales TUC, the Federation of Small Businesses and the Wales Confederation of British Industry.

Thank you. One of the things that I've got concerns about, and I have to appraise this in the question to you, is that we talk about fair work, but sometimes we talk about the wage rates, for example, and paying the real living wage, and then hours are reduced accordingly, so that people are being paid more money per hour, but the number of hours they work is reduced. And sometimes, it balances out so that they get paid no more money. And in some cases, and I'll just talk about pubs, for example, people are only paid up until the time that the pub closes for serving, not the time that they finish work, which can be half an hour later after they've collected the glasses and washed the glasses, et cetera. Should there be something in there over and beyond what is defined as fair work, so that people are treated in a way that you and I would probably describe as 'fairly', but which employers seem to find a lot of loopholes around?

Well, I mean, we came up with a clear definition that I think is usable and operational. There are many elements to the employment contract that we would like to see changed, but we had to keep it within the bounds of a usable definition. Remember, fairly rewarded—that can be interpreted in a number of ways and one of them would be achievement, paying the real living wage. But there are going to be other ways in which we can interpret that, and that's something that we would look at, or Welsh Government would look at, in terms of the statutory or non-statutory guidance on the procurement procedures, and what it means to demonstrate being fairly rewarded. 

You can't include everything in a definition, I think is what I'm trying to say. Our task was to come up with a clear, simple, easy-to-understand definition and I think the definition we came up with fits that bill, and has six characteristics. As I say, I'm getting back to my original point: the fact that it's not there. Even in the original tabled Bill, it was only a place marker, and responders to the consultation were asked to give their own legal definition, rather than being presented with the Welsh Government's definition, which, as Ed said, has been accepted. So, it is rather strange to see it not even appearing in the original draft Bill, and people having to respond and be consulted on what has been agreed.

I'm only a substitution, I'm not supposed to express views, but I do actually agree with that. But there are lots of things where I would that say non-fair work is taking place: people working in the caring profession who aren't paid for travel, for example, or they're given such a short period of time to travel, so, say they have to travel five miles, at 30 mph five miles should take a certain period of time—I was going to do the calculation, but I can't at the moment. But obviously, if you're driving around areas, either rural or urban, for many people, to keep to 30 mph driving through Swansea is impossible, so although they're given this, that itself is unfair. What I'm trying to get to the bottom of—and I'll stop after this—is how we can stop unfair clauses getting in there, which, on the face of it, look reasonable. So, five miles at 30 mph, you should do that in 10 minutes, whereas we both know that trying to get five miles across Swansea or across Cardiff in that period of time would be difficult.

Well, I think this is where the social partnership aspect kicks in, because I think what's distinctive about the Bill is that the social partnership partners will be involved in scrutinising the well-being objectives, and my hope is that that's where these things will be fleshed out and flagged as unfair and not be allowed to happen. So, I think that the voice of the worker and the workers' representative and employers is key here in preventing that happening on the ground, because we all know that industrial relations, employment relations, is granular, detailed, and those higher up in organisations or in Welsh Government, even, wouldn't know the granularity of particular sectors. And I think this is where the social partnership aspect comes in, in alerting people to those practices that may be unfair that probably won't be seen by others, because they don't understand the sectoral nuances that take place in particular organisations and particular parts of the economy.

13:50

Thank you, Chair. I suppose if I were just to touch upon something that Professor Heery mentioned. You highlight, I think it was the Scottish NHS, about practices where social partnership arrangements have been already used and that, and I was just wondering if there were any other examples that you think would be good to highlight, if that makes sense—you know, best practice, not just necessarily in the UK, but in Europe or elsewhere, really; anything we should be looking into and considering.

I mean, there's a lot of research on social partnership arrangements, particularly in northern European countries, and the research that I'm aware of—I can provide a written statement and references, if that is useful to the committee—indicated that, as I said earlier, the response to the financial crisis was rather different in countries with those arrangements in place, particularly with regard to investment in skills, in measures to retain people in employment and so on, through the worst of the crisis, so that skills weren't lost and after the period of economic turbulence they would be there when the economy picked up.

I mean, there are a lot of studies of partnership working, both in the UK—. There are excellent studies in Ireland and the United States, but I think the most valuable study—and this is of a voluntary partnership arrangement—is that by Nick Bacon and Peter Samuel. They included the Welsh NHS as well as the Scottish NHS. It's a nuanced, detailed study, but it's broadly positive in its assessment of partnership arrangements. Interestingly, it identified two critical conditions for success, one of which was the importance of political support, and my memory is that it was, in Wales, when Edwina Hart was appointed as the health Minister that breathed life into the partnership process and allowed it to become more significant. And the other was that it dealt with significant issues. I remember reading in the research report, one of the trade union people involved said, 'It dealt with big-ticket issues.' It wasn't confined to trivia; it was an important body, so people, employers, union representatives and so on were invested in it and wanted to make it work effectively, because its agenda was significant. I think that's an important lesson for this broader policy initiative on the part of Welsh Government.

Perfect. Thanks ever so much for that. I suppose, unless anyone else has anything to say, it might be best to move on.

Okay. In Germany, that was quite famous at one point for having the trade unions in the same room as the employers to discuss workplace issues. Other people have said to me, 'Oh, well that benefited the trade union officials who were in the room, but didn't necessarily feed back down to the workforce being involved.' What would you say about that?

I don't think that's the case. I just think that's wrong. The institutions matter and they can generate significant redistributive effects within national economies. And, I think, social partnership arrangements, there's a good body of evidence that indicates that these kinds of arrangements can have that effect.

Thank you. Professor Hayes, I think you wanted to come in at this point.

Yes. I wanted to add to the points made in respect of fair work. I think that the public understanding of fair work in Wales is that of the Fair Work Commission, and as has already been said, it has been the one that's been adopted by Welsh Government and social partners. I think that it could be difficult for fair work to be defined on a statutory basis, and I'm not sure that that is necessary, but it would be helpful, in my view, if the guidance was clearer, more consistent and made more consistent reference to the importance of the Fair Work Commission definition in terms of understanding what fair work is. So, I think that that could be an improvement that may be able to be progressed within limits around competence and recognising that the focus of this Bill is around sustainable development. So, I think it would be useful to have greater consistency and referral to the Fair Work Commission.

The other point that I wanted to make was about evidence about social dialogue and the significance of social dialogue that is sector wide for advancing equality and advancing sustainability. So, these measures that are set out within the Bill point favourably towards advances in Wales in that regard, because, as to the points that Mike Hedges was raising about unfair practices—those that he raised were particularly pertinent to care and to the bar industry—we can see initiatives like the care forum, like the retail forum taking shape, and what's significant is to recognise that those issues are not individual issues, and if they're looked at from an employment rights perspective, they are looked at through an individual rights lens. These issues are structural, they are to do with the organisation of the industry and the sector. Those types of issues can only be addressed effectively through dialogue, and so this Bill makes very effective provision for sustainability in terms of delivery of those services in advancing the well-being goals. I think that that is important, to recognise that function of what is proposed in the Bill.

13:55

Thank you. Apologies for not seeing your hand earlier—just wave rather than using electronic hands in future. Right, can we now move on to Jane Dodds, who's got some questions on the social partnership council?

Diolch yn fawr iawn, Cadeirydd. Dwi am siarad Cymraeg, felly dwi'n gobeithio dŷch chi i gyd yn gallu clywed y cyfieithiad. Dwi am ofyn am y cyngor partneriaeth gymdeithasol sy'n cael ei gynnig yn y Bil yma. Y cwestiwn cyntaf yw hwn: gaf i ofyn os yw hi'n glir ichi i gyd beth yw pwrpas y cyngor, a beth fyddai'n ei wneud o'n well yn eich barn chi? Felly, allaf i fynd at Professor Hayes, os gwelwch chi'n dda, yn gyntaf, os yw hynny'n iawn?

Thank you very much, Chair. I do want to speak in Welsh, so I hope that you can hear the interpretation. I want to ask about the social partnership council that is being proposed in this Bill. The first question is this: may I ask if it's clear to all of you what the purpose of the council is and what would improve it in your view? So, may I go to Professor Hayes first of all, please, if that's okay?

Thank you. The purpose of the social partnership council is to pursue the advancement by public bodies around the prosperous Wales objectives and to review functions around socially responsible public procurement, and to advise Welsh Ministers. It is narrowly drawn. In terms of what would improve its effectiveness, I am heartened by the provisions within the Bill that enable there to be reviews and amendments to some of the arrangements around composition to be able to see what works, and, similarly, I think it's important to recognise that the social partnership arrangements in terms of the well-being of future generations Act don't prevent public sector organisations from involving other bodies in terms of ensuring representation and discussion of particular issues to do with the objectives that they set.

So, I think that what will strengthen the arrangements is support for the social partners to continue to improve their organisation on both sides, to be able to strengthen their representation, to get involved with the well-being of future generations Act objectives. An extremely significant part of this Bill is to democratise and further advance those wide-ranging objective for the well-being of future generations Act, to drive it down into communities and into the business sector, to open up that dialogue, because, yes, it's hugely important for the public sector and public services, but, in order to be able to deliver in a way that brings Wales with it, it needs the engagement of worker representative organisations and business. So, I think that that will advance the effectiveness of the provisions.

14:00

Diolch yn fawr iawn. Ac i'r bobl yn yr ystafell, os gwelwch yn dda—Proffesor Felstead a Proffesor Heery, oes gennych chi farn arall?

Thank you very much. And to those in the room, please—Professor Felstead and Professor Heery, do you have another view, perhaps?

I'll go first. Just echoing Lydia's comments, I fully agree with what Lydia has said. I think, additionally, though, the social partnership council I see as a cascading device and, importantly, cascading down to the public bodies where, again, more of the minutiae of employment relations is going to be hammered out. Again, echoing Mike's points earlier, I think that's where a lot of the minutiae's going to happen. So, I think the cascading down from the social partnership council to the public bodies, and the public bodies also are required to have a social partnership arrangement with worker representatives, where they exist, or collective organisations, or otherwise worker representatives, is to be applauded. That distinguishes the set-up here in Wales from, say, Scotland, where that doesn't happen. Social partnership doesn't play such a great role in Scotland, and we often look to Scotland as the leading light in this field of fair work, mainly because they started before us. They had first-mover advantage, as we might say, but they were only three years ahead of us. But, substantively, Wales is different in that it puts social partnership at the heart, and that is not the case in Scotland, where a lot of it is more to do with the voluntary nature of organisations. Social partners do not have the same role as planned in the Bill in Scotland as they do in Wales. So, I see the council as the apex, I suppose, of this Bill, and then, importantly for me, and maybe even more importantly, is representation at public body level, where the minutiae is going to get hammered out and where fair work can actually be delivered on the ground in much greater detail.

Just to ask, in that cascade element—I think it's under section 9, where you've got the provision for creating sub-groups, and there's a sub-group for public procurement—where do you see that helping if there are any extra sub-groups that should be created in the statute? Or how do you think—? Professor Heery, you seem to want to answer the question, so I'll ask the question there.

Whether this can or should be written into the legislation, I don't know, but I think it's very important that the council, if it is successful, must develop its own substantive agenda to demonstrate its utility in Welsh public policy. There are a couple of things that could be done, I think, to help it do that. One is that ACAS could be looked at to develop the skills, training and so on that will be required to support representatives of both employers and employees in this. I think if it does develop a substantive agenda, then my guess is that the range of institutions and interests that are drawn into the process of social partnership will inevitably be broadened, if you like. As I understand it, at present, the proposal is the council would be comprised, if you like, of the core social partners—the organisations I mentioned before, such as Wales TUC, and so on. But it may be that in-work poverty becomes part of its agenda, developing skills, and something maybe more specialised so that other institutions can be drawn into the decision-making process through sub-committees, working groups, and so on. I think it's particularly important to develop industry-level—. I think Lydia mentioned the social care forum, and it's often said that there's a kind of missing middle within employment relations. Things develop at workplace level and at national level, but often there are problems that are specific to industries, and developing an industry-specific agenda may be important for the social partnership council, I think—reproducing what's been done in social care with this social partnership, like the social care forum.

14:05

Do you think that should be looked into and incorporated into the Bill, or let the social partnership council develop its own? Obviously, there's one statutory sub-group that's definitely there; are there others that should be there?

I don't know; I'll pass on that. I just don't have the expertise in drafting legislation. 

Diolch yn fawr iawn. Gaf i jest ofyn am fwy o fanylion gennych chi, os gwelwch yn dda, ynglŷn ag aelodaeth y cyngor? Rydyn ni wedi clywed gan bobl, yn enwedig yr undebau, eu bod nhw'n anhapus ynglŷn â'r cynnig ar aelodaeth y cyngor. Yn eich barn chi, beth fydd yn gwneud cyngor yn hollol gynrychiolaidd dros Gymru? Rydych chi wedi cyffwrdd tipyn bach ar hyn, ond oes yna fwy neu oes gennych chi ryw syniadau ynglŷn â sut mae'r cyngor yn gallu bod yn fwy o gynrychiolwr dros Gymru, os gwelwch yn dda? Diolch yn fawr iawn. Dwi ddim yn gwybod pwy sydd ddim wedi cyffwrdd ar hyn. Efallai, Proffesor Heery, ydych chi eisiau mynd yn gyntaf, neu Proffesor Felstead—i ddechrau yn yr ystafell?

Thank you very much. Can I just ask for more details from you, please, about the membership of the council? We've heard from people, particularly in the unions, that they're not content with the proposed membership of the council. What do you think will make council fully representative across Wales? You have touched a little bit on this, but is there more detail that you could give us, or do you have some ideas, about how the council can be more representative across Wales, please? Thank you very much. I don't know who hasn't touched on this. Perhaps, Professor Heery, would you like to go first, or Professor Felstead—to start in the room itself?

I can say something. I'm afraid I'm not aware of what the trade union said in their submission to the committee. I think the sort of institutional environment of industrial relations has become much more complex over the years on both the employer and the employee side, so there's a broader range of institutions that's become involved in the process of shaping what goes in within the employment relationship. On the employer side, we've had the emergence of issue-based employers organisations—Business in the Community might be the most well known, but there's the Business Disability Forum and Inclusive Employers. So, they're representative organisations of business that stand outside the structure of the CBI and FSB, but which are concerned with sustainability and fair work type issues. I think that management organisations increasingly have an important role. The CIPD, the professional body of HR managers, increasingly is involved in formulating standards of good practice and seeking to diffuse them across the labour market. On the union side, there's been the growth of civil society organisations, single-issue groups, or groups that are concerned with representing—they're often not representative organisations, but they seek to speak on behalf of a particularly constituency, whether it's lesbian and gay people, older people, and so on. So, there's a more complex institutional environment out there. 

Now, should all of these organisations be represented on a body of this kind? Well, you don't want to make it too unwieldy. Many of them have a rather narrow agenda, so I don't have any particular recommendation with regard to the composition of the council, but I think if the council addresses substantial issues in the way I outlined before, then this broader set of institutions could well be drawn into its work. If you like, it could consult with them and seek evidence from them, and so on.   

14:10

Thank you very much. I think it's important to recognise the representative capacity and potential for the public services boards. I do think that this Bill needs to be looked at in conjunction with the provisions that already exist in terms of well-being of future generations. There is more that can be done with public services boards. There is potential to expand representation in terms of public services boards, particularly in terms of education, for example, in Wales. I also think it's important to recognise that while the focus of this discussion, and indeed my work, Alan's work, Ed's work, is anchored in notions of fair work, the other objectives in the well-being of future generations Act are essential as areas where fair work intersects. So, for example, if we look at goals around public health, around having a more equal Wales, more cohesive communities, in order to maximise the potential for attaining improvements for the well-being of future generations, it is important that there is good, well-rounded representation.  

In terms of some of the points that Alan has made about the success of this as being that the social partnership council is the figurehead organisation, or the top-level organisation engaging with Ministers, what will be essential for its success is its ability to be able to then connect into those other structures that exist. So, for example, it may well be that at a workplace level, initiatives such as well-being of future generations Act representatives might key into discussions around facility time in particular public service organisations. That will really help to drive forward this agenda, and also help to improve the levels of representation and the significance of representation at the higher levels that are envisaged around the social partner representative organisations. So, I think that that is going to be extremely important.

In terms of having a broader range of organisations represented, I think that it's up to the different sides of industry and community to ensure that they are organising themselves in order to maximise their representative capacity, so that they are representing as wide as possible a part of Wales. That is their responsibility, and that is essential for effective social partnership. And so, engagement around assistance of training, as has been suggested, through ACAS will be really important and could well be very effective and helpful. 

Just to add, I suppose, picking up on something Lydia mentioned there, 'keying into' debates, I think she called it—public bodies keying into certain aspects of strategic decision making that may have an impact on well-being. One area I'm interested in is the link between Parts 2 and 3 of the Bill. What I'm talking about here is that the Bill talks about 'socially responsible' procurement; I'm emphasising the word 'socially'. I'm interested in how that happens—the social aspect to it. I presume that seems to suggest that the social partnership and the social partners had a role in procurement, because that's a strategic part of a public organisation—how it delivers the well-being goals. But it's not clear whether there's a link between Part 2 and Part 3 of the Bill. In other words, to what extent does social partnership extend to procurement? I'm picking up on the words 'socially responsible', and I emphasise the word 'socially' here. I'm presuming that's the case, but it's not apparently clear from the Bill that it is. I'm just assuming it is. But again, in terms of driving fair work, I would have hoped that the social partnership at public body level extended into procurement, so that it is made socially responsible.

14:15

Na, dim diolch. Diolch yn fawr iawn, Gadeirydd.

No. Thank you very much. Thanks, Chair.

Thank you, Chair. I was wondering if I could just have a quick chat about the social partnership duty. I was wondering if you can give practical examples about how well that could work in terms of assisting trade unions and public bodies to achieve better outcomes, and if you know of any international examples of a similar duty and how it's worked there.

But also, one of the things I wanted to question you about, to take the opportunity, is that some concern has been raised that by involving trade unions in that procurement process, on the one hand, they're in the best place to challenge, to fight for fair work, but then if you bring them into the process, there is almost a danger of marking their own homework, in a sense, so they provide less scrutiny. Is that an argument you'd recognise?

I'm not sure they'd provide less scrutiny. I think I would argue they'd invite more scrutiny, but scrutiny with a fair work hat on very much. I think they're the drivers for fair work. That's where I see the drive. That's how I see this Bill—as giving the social partnership, the key stakeholders, the ability to push this agenda forward, notwithstanding my comments about what is fair work. But I think that can probably be addressed by the other policy documents that Welsh Government publish, which should say 'fair work' loud and clear and give greater clarity to what is meant. But I see trade unions as the driver of the process, not as the obstacle to delivery of fair work.

I'd make a slightly different point, and I hope this isn't going off at a tangent. I think across devolved bodies across the UK, there's an emerging policy recipe that has emerged. I'll take the example of greater Manchester as a case in point. There, the regional authority has developed what I think they call a 'good employment charter'. It's a list of substantive desirable employment practices, including provision for voice and representation of workers, that they are seeking to have adopted by employers, and it's graduated—there are three levels of compliance with this relatively complex standard.

The other side of that is that they want to make procurement and grant-giving decisions in the light of employers adhering to this standard. So, if you like, there's a substantive statement of what is good or fair work, and on the other side, there are decisions about allocating resources to employers; there's those two sides of the policy. It seems to me that the provisions that have been incorporated in the Bill here are largely procedural; they don't have anything to say about the substantive content of fair work, echoing what Alan was saying before. So, it's whether we want to move towards that sort of emerging policy recipe, possibly. 

I would add that setting out these procedures on a statutory footing is designed to promote voluntary arrangements and that the ability of social partners to reach agreement to be able to shape culture around compliance and around mutual enforcement across sectors is very important. That is done and is part of the social partnership process—that issues to do with compliance and enforcement become more transparent. So, I don't recognise the difficulties that were pointed to about involving trade unions in that conversation. I don't see that that claim could be made any more from one side of the social partnership and social dialogue than any other. It is extremely important to be able to advance those social goals by having all parties involved, both sides of industry involved, in those discussions, to make it more successful, to avoid the need to have to go down contractual compliance and enforcement routes. The engagement and involvement of the partners in dialogue is a very important way of maximising opportunities for procurement processes and procurement outcomes to be more as they are hoped and intended at the time when the contractual terms are set.

14:20

Thanks for that, Professor Hayes. You mentioned there how engagement and discussion are better than compliance. But do you think there should be compliance measures put into this Bill, and what sort of compliance measures, if there were, if that makes sense?

I don't think that that is the function of this Bill. I think that the function of this Bill is around establishing social partnership and social dialogue in furthering the objectives of the well-being of future generations Act, in setting out some mechanism, some reporting, some ways of being, Welsh ways of working, around procurement. And I think that that then will key into existing mechanisms, things that are already there, around contractual compliance.

The Bill is knitting together a number of different initiatives that have emerged in Wales over the past decade around social responsibility, in terms of procurement, and also in terms of employment practices, and fair work as well. And so, what I see that this Bill is doing is driving that forward, taking it forward to a next step and a next level, within the competence that Welsh Government has, in order to make it so that what is being maximised are the possibilities and opportunities for Wales.

Can I just add a few things?

On knitting together, yes, I totally agree with Lydia there, but I think there are other ways in which we could knit more. I don't know whether that's an appropriate metaphor. There could be further steps. There's non-statutory guidance. What is in the non-statutory guidance in terms of procurement? And again, looking to Scotland, there's a list of ways in which employers can demonstrate that they have their fair work credentials. In Scotland, it's Investors in People, Healthy Working Lives award and the Scottish Business Pledge. Again, I'd like to see what the equivalent would be in Wales. Presumably there'd be a list of credentials that employers could get to demonstrate their fair work credentials. Can I also just say a note on that? The Fair Work Commission did recommend that

'a public-facing Fair Work Wales standard be developed'.

I'm quoting there. I'm yet to see one. But there are ones that could be used and could be amended for this purpose. I point here to Healthy Working Wales, which is funded by Welsh Government. It could be 'healthy and fair work Wales', with a bit of imagination. So, that's one thing, on non-statutory guidance and standards.

The second thing there—. I can't read my writing. What does that mean? Oh, yes. Given the role of the future generations commissioner, in this—and I take Lydia's point—I wonder whether there could be a greater role for the commissioner's office in monitoring fair work, given that it's a crowded field in a prosperous Wales. There are three indicators in the well-being targets—there are only three—but I wanted to know who's got responsibility for monitoring those. And it might be an idea to give that responsibility to the commissioner's office, given that it's been framed within the Well-being of Future Generations (Wales) Act 2015. So, again, just to have oversight from another organisation might be useful in further knitting together this patchwork of activity.

14:25

May I come in with a further suggestion there to add to what Alan has said? I wonder whether it has been considered the potential for a deputy future generations commissioner, particularly in the initial period around the significance of fair work. So, we know that there is a range of work that is going to be needed to be done, because the public organisations are going to need to do reviews of their well-being objectives and their well-being plans due to the change in statute. And it certainly would seem as though this would provide an opportunity for an important stream of work and focus on fair work and the cross-cutting nature of fair work, and accelerating and driving forward various different fair work agendas and different parts of the fair work objective, through a deputy commissioner role.

Thank you. Well, we're seeing them later on, so we'll put that to them. Professor Heery.

Just one minor point. My understanding is that the focus of the legislation is very much on socially responsible procurement—that Welsh Government disperses economic resources in other ways as well, not just as a purchaser. I mean, it makes grants to charities, to business and so on. My understanding is that the fair work first initiative in Scotland encompasses those other economic or financial activities of government in a way that is not done within this Bill.

Thanks, Cadeirydd.

Diolch yn fawr am sesiwn hynod o ddifyr.

Thank you very much for an exceptionally interesting session.

It's all right; I'll continue in English. I just said it was a very fascinating session this afternoon. I've got two questions, briefly—I know we're against the clock. Pages 107 to 109 of the explanatory memorandum set out the Welsh Government's plans to evaluate the impact of the Bill. What's your assessment of these? And then, as a second part, what metrics would you want the Welsh Government to use to evaluate the Bill and why? I don't know who wants to go first.

Gosh, that's an interesting question. Diolch yn fawr iawn. [Laughter.] A bit of a curve ball, that one. I think a good place to start would be the national indicators. As I said, there are three national indicators that relate specifically to fair work, and I'd particularly draw attention to the one on collective bargaining, because that's a key one for me in terms of social partnership. So, there are ways in which we can measure performance in terms of driving up workers' voice in the workplace, so that would be one that I would look at. However, I would say that the three indicators are quite limited, and research suggests that there are many, many, many more that could be looked at, but obviously the future generations well-being goals had to be limited to 50. So, there are 50 that do relate to fair work, but there could be many more. So, I support Lydia's point that there should be a deputy commissioner for fair work to drive that agenda forward. My fear is that if there isn't anybody, it might not be driven, or the oversight might not be as great as it should be.

Yes. With regard to measures, we've heard a lot about social value in a lot of these sessions, how do we measure that? You see, the theme that I've got is more about measurement and evaluating and seeing how we make sure that this Bill does what it's supposed to do. I don't know if we want to go to Lydia first and then maybe to Professor Heery afterwards.

14:30

I think collective bargaining is a really significant indicator. It's an indicator of the extent to which this initiative and this Bill drives long-term change. So, I think that that is very important. There are also potential indications around the proportion of public procurement that is in Wales, and the range of organisations that are supported and are able to provide, through public procurement—I think that that's another important indicator. Since the care forum is the first forum where we've seen this voluntarist social partnership approach, I think looking at what the care forum is able to deliver, and perhaps some measurements that come out of that around improving work in the care sector, but also improving the quality of care—. Because those objectives are so significant around communities in Wales, the significance of strong care services to enable economic participation, the significance of strong care services for gender equality, for dealing with the industrial issues that Wales has, and also persons with disabilities and their engagement. So, I think that linking and looking at what's happening in terms of the deliverable outputs from the care forum will also be important, because this is about driving a wider cultural change, looking at building on the confidence that was built up in social partnership during the COVID crisis, and looking at extending that and building on these sustainability goals, I think, will be very important, looking at other issues to do with infrastructure around representation for trade unions and for employer bodies. So, as I say, things like representatives, a number of representatives in workplaces who are engaged with this agenda, perhaps as well-being of future generations Act representatives, or facility time to be able to engage with public services boards, the representation—the widening of representation on the public services boards will also be important. So, I think that there is a big potential agenda for measuring the significance of what comes out of this Bill.

Two quick remarks to that: the Fair Work Commission did produce a list of recommendations on how progress in realising fair work could be measured in Wales, written by Alan. There are a number of other frameworks that may be useful as well emerging out of the inclusive growth policy framework. So, I think ways of measuring inclusive growth, which encompasses good quality of fair work have been developed by the inclusive growth unit at Manchester University, and I think the Joseph Rowntree Foundation has produced a set of indicators that a number of local authorities, for instance, have started using—like the proportion of the workforce being paid at least the real living wage, that kind of thing.

Is there anything you wanted to add? No. That's fine. Well, thank you, all three of you, very much for your contributions. We'll send you a transcript of what you said, and please use the opportunity to correct anything we've got wrong. Thank you very much for your time, and the committee will now take a short break until 2.45 p.m.

Gohiriwyd y cyfarfod rhwng 14:34 ac 14:45.

The meeting adjourned between 14:34 and 14:45.

14:45
6. Y Bil Partneriaeth Gymdeithasol a Chaffael Cyhoeddus (Cymru): sesiwn dystiolaeth 10—cyflogwyr y sector cyhoeddus
6. Social Partnership and Public Procurement (Wales) Bill: evidence session 10—public sector employers

Welcome back to the Equality and Social Justice Committee, where we're continuing our scrutiny of the social partnership and public procurement Bill. This afternoon's session is with Karen Higgins and Jon Rae from the Welsh Local Government Association, and Marie Brousseau-Navarro and Alice Horn from the future generations commissioner's office. So, welcome to all four of you. As there are four of you in the room, and we've got an allocation of until 15:35, I wondered if you could just be mindful of the time and not bother to repeat things if somebody else has said something that you agree with, but if you want to add something, please feel free. We'll start off with Joel James, who's going to start off the discussion.

Thank you, Chair, and thanks, everyone, for coming to this afternoon's evidence session. I suppose my questions, really, are the same ones that I've asked nearly everyone else. We've heard a lot about how organisations are already adhering to social partnership principles, and we've heard that some local authorities have questioned the need for this as well, and I was just wondering what your views are. Is there a need for there to be statutory legislation, really, for social partnership, and is this the way to go about doing it, what the Welsh Government's proposing? What do you think would be the outcomes? How would you rate this to be a success, if that makes sense? Whoever wants to go first. I see a hand going up; I can't see any names, I'm afraid, though, sorry.

Thank you very much, Chair, and thank you for that question as well. From a local government perspective, we've been clear from the outset that the Bill has the WLGA leadership's full support. Actually, when we responded to the Welsh Government consultation, I think it was back in April last year, the then employment spokesperson, who was Councillor Philippa Marsden, wrote with a covering letter to the consultation just saying how much we supported this legislation.

We know that some of it enshrines what's being done already, and, on the procurement side, what we'd regard as good practice already, but it was clear to us that there needs to be some consistency, and I think that's what this Bill brings, and, as I said, we're just fully supportive of it. Even though we're into a new municipal term, I couldn't envisage a scenario where the current WLGA leadership would disagree with anything that Councillor Marsden had said back in April 2021.

I would echo some of what Jonathan is saying. Yes, we support the general principle of the legislation. We think the procurement part is indeed implementing a lot of our recommendations, but we can discuss how there's a lot of reliance on statutory guidance, so our recommendations might be implemented or not, depending on what goes into statutory guidance and how well it is done.

And then on social partnership, we think it's important to raise it up to a level, so on a statutory footing here, because our monitoring and assessing in the future generations report has found that public bodies are focusing only on employment and economic growth in the prosperous Wales element of their well-being objectives, and that was one of the most striking findings from our analysis on well-being objectives. The Welsh Government was the only public body that had specific well-being objectives to tackle regional inequalities and promote fair work, so the only one with a specific reference to fair work or decent work, and Cardiff had made references to being a real living wage employer. We found the picture is the same at public services board level, and it's echoed again by a recent report from Public Health Wales that shows that fair work was found in very few well-being plans or regional economic development frameworks, even though they are so important as key determinants of health, including money and resources, education, skills, housing and our surroundings. So, yes, we think that there's a need for the legislation.

14:50

Thank you, Chair. It was just to echo some of the comments and say that from local government's perspective, in terms of working in social partnership, we're wholly supportive of social partnership and have a proven track record, I think, of working in social partnership, with well-established arrangements with our trade unions to operate and work with them on a partnership basis and on a consultative basis with them locally. But, our plea would be, really, that whilst social partnership might mean different things to different people, and it would definitely benefit from a common interpretation of what it is and what it means within a Welsh context, we're looking for consistency of understanding, and support the Bill on that basis, but maybe not any sort of prescription or uniformity expected in terms of delivery. Different cultures in different organisations will demand different arrangements, all of which are developed in partnership locally, and we shouldn't assume that one size fits all. So, it's about consistency, understanding, and maybe consistency more broadly, but without getting down to that level of prescription that could fetter decision making and well-established, successful arrangements locally.

Yes, only to add, on this Bill, on the definition of what should be included in fair work. So, to us it's really important that it is well integrated with the well-being Act, as you can imagine. So, with explicit references to the need to reduce inequalities associated with socioeconomic disadvantage, but as well as delivering on all the well-being goals. So, while I agree with the flexibility, and, again, the well-being Act is for all of that, we need to make sure it's not done only in relation to economic growth, the traditional economic way of seeing things. We have concerns about how the Bill is shown as improving four different types of well-being, and especially economic and social ones. We disagree with that interpretation. It's really important to understand that there's one well-being with four dimensions that are equally important, and we really need to make sure that the Bill is not damaging the holistic nature of well-being in the well-being Act.

Lovely. Thank you, Chair, and thanks ever so much for those responses. I suppose the next question I want to ask is about the resource implications of this. We've heard from previous evidencees, I suppose, that there is concern about funding, resources, capability and capacity, and I was just wondering what your views are on this and whether or not that's been reflected in the regulatory impact assessments. I'll pass that over to you. Marie, do you want to start?

Yes, sure. It's definitely a concern I wanted to raise as well, and based on our experience of the implementation of the well-being of future generations Act, we know that cultural change and the cost implications of it are sometimes underestimated and that that's very often the case. When I was looking at the regulatory impact assessment here, I saw things like it assumes initial familiarisation activities of three hours of an officer's time for one person in each of the 44 public bodies. So, I'm really hoping the Finance Committee will look into that a bit more. And, again, we know from experience that it is really important to spend time working with the people who are on the receiving end of new duties, so that they can understand how it works with the million things they already have to do, and make sure it's efficient and doesn't contradict any of the things they have to do in the new legislation as well as the other legislation.

Yes, thank you, Chair. Marie hit the nail right on the head there in explaining that any new burden has to be discussed with current practitioner groups here. Just thinking about some of the procurement issues—procurement teams. There's a real issue with capacity, I think, in local government at the minute. In these corporate support-type functions, these are the functions that bore the brunt during austerity, in terms of cuts. There's a real issue with capacity there. But they need to understand what it is that they'll be required to do in the future.

You can't include everything in a regulatory impact assessment, and it was clear that, while there's a lot of Welsh Government cost that's been factored into the RIA, there isn't much for other organisations, apart from that good example that Marie referred to there. But it's certainly something that needs to be worked through.

14:55

Maybe just on that as well to stress that the legislation makes reference—for example, on Jonathan's point—saying it doesn't affect in any way our work, which we find a bit strange. We don't think it is right in terms of integration and collaboration, but it's just to give you another example. And I totally agree with Jonathan, that I could see how a lot of Welsh Government costs were factored in, but not for the others, and often they said, 'Oh, they can't really be costed', but I think they should make a bigger effort in trying to quantify this because there will be lots of costs for the people having to implement the new duties, as well as our office.

Diolch yn fawr iawn. Prynhawn da, pawb. Dwi eisiau gofyn, os ydy hynny'n iawn, am y cyngor partneriaeth gymdeithasol sydd yn y Bil, sy'n cael ei gynnig yn y Bil. Y cwestiwn cyntaf yw: ydych chi'n meddwl bod y cyngor yn effeithiol? Ydych chi'n meddwl bod pwrpas y cyngor yn glir? Dydyn ni ddim eisiau clywed beth ydy'ch barn ynglŷn â'r cyngor, ond ydych chi'n meddwl bod y pwrpas yn glir ac y bydd o'n cael yr effaith mae'n bwriadu ei gael? Dwi ddim yn gwybod pwy sydd eisiau mynd yn gyntaf. Marie, ydych chi'n barod?

Thank you very much. Good afternoon, everyone. I want to ask about the social partnership council, if that's okay, which is proposed in the Bill, of course. The first question is whether you think that the council will be effective. Do you think that the purpose of the council is clear? We don't want to hear your opinion about the council, but do you think that the purpose of the council is clear and that it will have the impact that it is intended to have? I don't know who wants to go first. Marie, do you want to go first?

Marie Brousseau-Navarro 14:57:55