Meeting, Document
Socially Responsible Procurement update: paper to note
SPC Members are asked to note the contents of this paper and the progress of work to establish the procurement subgroup of the SPC and to bring Part 3 of the Social Partnership and Public Procurement (Wales) Act into force.
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Commencement
- Part 3 of the Social Partnership and Public Procurement (Wales) Act 2023, and Sections 9 and 10 which are about the establishment of the procurement subgroup of the SPC, have not yet commenced.
- These sections of the Act fall broadly into three categories: definitions; duties or provisions for ʶ Ministers to develop secondary legislation and guidance; and duties to be placed on Contracting Authorities.
- The first commencement order is due to be made in April. This will include sections of the Act that require or allow Ministers to develop secondary legislation, the social public works and workforce clauses, the public services outsourcing and workforce code (the new Two-tier Code), and to publish guidance, including guidance on the composition of the SPC’s procurement subgroup.
- Following the first commencement order, work will begin on the secondary legislation, the code and clauses, and guidance. Officials will continue to work in social partnership, sharing progress with the SPC as material is developed, and this will be followed by open consultation on much of the material.
- Once the regulations and other documentation is completed a second commencement order will be made, bringing the duties on contracting authorities in Part 3 into force.
Regulations
- Four sets of regulations need to be made before Part 3 can be commenced.
i. Changing the phrase “people with disabilities” to “disabled people” in the section about social public works clauses. This is in order to use language consistent with the social model of disability.
ii. Defining “prescribed procurements” as contracts that exceed advertisement thresholds set in the Procurement Act 2023. Above these thresholds, contracting authorities must take all reasonable steps to achieve their objectives.
iii. Defining “registrable contracts” to be included in published contracts registers.
iv. Prescribing the information that contracting authorities must include in their annual reports to show how they have contributed to well-being goals through their procurement over the previous financial year.
- The detailed timeline for development of these regulations is being finalised, but it is expected that the consultation on these regulations will take place in the autumn, with Senedd scrutiny concluded by early 2026.
- Work has been undertaken, including discussions with social partners and public, private and third sector stakeholders, on the “information” (well-being metrics) to be included in annual reports. Plans for how this information is to be recorded and reported are also being developed.
Part 3: Socially Responsible Procurement: update on supporting material and guidance
- A draft of the public services outsourcing and workforce code, with its accompanying social public workforce clauses has been discussed with stakeholders, including the SPC. This will also be subject to formal consultation after the first commencement order has been made.
- Work on the draft construction contract clauses (social public works clauses) has been undertaken, including discussions with stakeholders. Officials are working on a draft of these clauses, plus accompanying guidance, with the aim of being ready for formal consultation once the first commencement order has been made.
- Officials are working on other sections of guidance, described in section 43 of The Act. This includes guidance on carrying out procurement in a socially responsible way, setting procurement well-being objectives, and the practicalities of the notifications process required when contracting authorities decide not to include the works and workforce clauses in relevant contracts. Social partners will be invited to engage in the development of the guidance.
Sections 9 and 10: the procurement subgroup of the SPC
- The Act requires three steps to be taken to establish the statutory procurement subgroup. First the ʶ Ministers must publish guidance on the make-up of the group as set out in Section 9(5). Then, within 6 months of section 9 coming into force, the group must be established by the SPC and its procedures established and published.
- A draft of the guidance document will be sent to the SPC when available – we anticipate this will happen over the next few weeks.
- The main steps are to:
i. finalise proposal for subgroup composition;
ii. discuss proposal with the SPC;
iii. agree the proposal with ʶ Ministers;
iv. publish guidance on composition of the subgroup; and
v. carry out the appointment process and develop the procedures to allow the subgroup to function effectively.
- It is intended that the guidance will be published in May, with the appointments process completed before Christmas 2025. Further updates on the timeline will be shared with the SPC shortly.
- The UK Procurement Act 2023 and ʶ regulations came into force on Monday 24 February, which primarily covers the procurement process. The socially responsible procurement duties in the SPPP Act are about outcomes and ensuring that the well-being goals are being pursued through procurement.
- The Procurement Act was passed by the UK Government in 2023, and since the UK General Election, the new Government has made some progress towards further changes to the procurement regime.
- The Employment Rights Bill contains provisions for an amendment to the Procurement Act to allow for the reintroduction of a two-tier workforce Code, and it is likely that further changes will follow. It will be important to consider the implications of this not only on ʶ Contracting Authorities listed in Schedule 1 of the SPPP Act, which are covered by the Socially Responsible Procurement Duties, but also on ʶ contracting authorities as described in the Procurement Act 2023 that are not included in Schedule 1.
Next steps
- To summarise, the draft guidance on the composition of the procurement subgroup will be shared with the SPC shortly. Once the initial commencement order is made consultations on the works and workforce clauses and the workforce code will be scheduled. Draft documentation and timescales for these consultations will be shared with the SPC.
- Officials will be happy to arrange technical briefings with the SPC if that would be helpful.