Wales: new bill to use public procurement to enhance social partnership

The Government of Wales has put forward a new law on public procurement that will be a game-changer for working people. It will ensure that public contracts going to private companies are awarded to companies that offer decent working conditions.

Too often, public contracts are awarded based only on one criteria: the lowest price. This incentivises companies to undercut each other on labour costs. As a result, public money has fueled a race to the bottom on working people’s pay and conditions.

The Welsh legal change turns this on its head. It ensures that public money is spent in a way that reinforces public good objectives. It would require all companies to meet standards of decent work and give workers’ unions a strong oversight role. In doing so, it ensures that people who work in companies that get government contracts do so in conditions of dignity.

The law goes a step further than excluding exploitative companies and reinforces collaboration between workers and employers. A Social Partnership Council will bring together workers’ unions, employers’ organisations as well as government representatives to advise public bodies on social public procurement.

“Public procurement is an essential tool governments have at their disposal to strengthen collective bargaining and deliver shared prosperity. Governments shouldn’t be in the business of creating poverty jobs and the Welsh government is showing the way forward,” said Oliver Roethig, Regional Secretary of UNI Europa.

NEW: Welsh Gov publishes the new Social Partnership Bill.

Welcoming the Bill @shavtaj said:

“This legislation is a landmark step. Social partnership delivers for workers and gives them a real role in shaping the decisions which impact them.”https://t.co/XQ7dSsRDph

— Wales TUC Cymru (@walestuc) June 7, 2022

A lesson for the EU

Governments across Europe spend on average 14% of national GDP on buying goods and services from private companies. Currently, half of all public contracts going to private companies are awarded based only on lowest price. The EU’s public procurement rules set the tone by putting lowest price above all else. The Welsh example shows that with the right legislative action, public procurement can be leveraged as an effective tool to boost decent work.

“The EU’s broken public procurement rules reward corporations that pull dirty tricks to shut down workers’ say and pay their workers poverty wages. This is driving inequality and a rise in conflictual labour relations. It is time the EU fixed these rules to defend democracy at work and shared prosperity,” said Oliver Roethig.

Momentum is building for fixing the rules. Over 100 Members of the European Parliament have endorsed a pro-worker fix: ensure that all workers in publicly contracted companies have a collective bargaining agreement.

Find out more and get behind the campaign here.