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Welsh Parliament Equality and Social Justice Committee
Stage 1 report on the general principles of the Social Partnership and Public Procurement (Wales) Bill November 2022
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www.senedd.wales
Welsh Parliament Equality and Social Justice Committee
Stage 1 report on the general principles of the Social Partnership and Public Procurement (Wales) Bill November 2022
About the Committee The Committee was established on 23 June 2021. Its remit can be found at: www.senedd.wales/SeneddEquality
Sarah Murphy MS Welsh Labour
Jane Dodds MS Welsh Liberal Democrats
Committee Chair: Jenny Rathbone MS Welsh Labour
Current Committee membership:
Altaf Hussain MS Welsh Conservatives
Sioned Williams MS Plaid Cymru
Ken Skates MS Welsh Labour
The following Members attended as substitutes during this inquiry.
Peredur Owen Griffiths MS Plaid Cymru
Joel James MS Welsh Conservatives
Stage 1 report on the Social Partnership and Public Procurement (Wales) Bill
Contents
Chair’s foreword ................................................................................................ 7
Recommendations ............................................................................................ 9
1. Introduction ........................................................................................... 14
Committee’s approach .......................................................................................................................14
Other Committees’ consideration .................................................................................................. 15
2. General principles of the Bill ................................................................ 16
The need for legislation ..................................................................................................................... 18
The Bill’s objectives versus outcomes ........................................................................................... 19
The Committee’s view ......................................................................................................................... 21
General principles ......................................................................................................................... 21
3. Social Partnership Council .................................................................... 22
Role and operations of the SPC ..................................................................................................... 22
Membership of the SPC .................................................................................................................... 24
Representation of non-unionised workers ................................................................................. 25
Nomination processes for Council representatives ................................................................ 26
Equality, diversity and inclusion in relation to the Council’s operations ......................... 29
The Committee’s view ........................................................................................................................ 30
Role and operation of the Social Partnership Council ................................................... 30
The SPC’s sub-groups ................................................................................................................. 31
Nominations and membership of the SPC ......................................................................... 32
4. The social partnership duty .................................................................. 34
Public bodies covered by the duty ................................................................................................ 35
Relationship with the well-being duty ................................................................................. 37
The social partnership duty and other existing duties ........................................................... 38
Compliance with the duty ................................................................................................................ 38
Separate duties for Welsh Ministers ............................................................................................. 40
Stage 1 report on the Social Partnership and Public Procurement (Wales) Bill
The Committee’s view .........................................................................................................................41
The Social Partnership duty ......................................................................................................41
Enforcement and compliance ..................................................................................................41
5. Fair work ................................................................................................. 43
Changes from the Draft Bill ............................................................................................................. 43
Fair work in the Bill as introduced ................................................................................................. 44
The Committee’s view ........................................................................................................................ 46
Fair work provisions .................................................................................................................... 46
6. Socially responsible public procurement ............................................ 48
The socially responsible public procurement duty ................................................................. 48
Globally responsible public procurement .......................................................................... 49
Coverage of the procurement duty .............................................................................................. 50
Measuring the impact of the duty ................................................................................................ 52
Contract management ....................................................................................................................... 53
Additional duties ......................................................................................................................... 54
Procurement strategies ..................................................................................................................... 55
Outsourcing ........................................................................................................................................... 55
The Committee’s view ........................................................................................................................ 55
Socially responsible public procurement ............................................................................ 55
Coverage of the duty ................................................................................................................. 56
Impact of the duty....................................................................................................................... 57
7. Implementation of the procurement aspects .................................... 59
Procurement Centre of Excellence ......................................................................................... 61
Reporting arrangements, investigations and compliance ..................................................... 61
Powers to investigate ................................................................................................................. 63
Guidance ................................................................................................................................................. 64
The Committee’s view ........................................................................................................................ 65
Implementation of the Bill’s vision for procurement ...................................................... 65
Stage 1 report on the Social Partnership and Public Procurement (Wales) Bill
Working with industry ............................................................................................................... 66
Reporting and compliance ....................................................................................................... 67
Powers to investigate ................................................................................................................. 67
Guidance ......................................................................................................................................... 68
8. Financial implications and other considerations ............................... 69
Financial implications for public bodies ...................................................................................... 69
Regulatory Impact Assessment ...................................................................................................... 69
Facility time ............................................................................................................................................ 70
Post-implementation evaluation .................................................................................................... 71
The Committee’s view ......................................................................................................................... 71
Financial implications and the RIA ......................................................................................... 71
Facility time ..................................................................................................................................... 71
Post-implementation evaluation ........................................................................................... 72
Annex A: List of oral evidence sessions ........................................................ 73
Annex B: List of written evidence ................................................................. 76
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Chair’s foreword
This is the first legislative attempt in the devolved era to bring
together social partnership, fair work and socially responsible
procurement. This approach offers many potential benefits, and
most of the Committee support the Bill’s general principles. But
many key questions about the Bill, and how it will achieve its
aims, remain unanswered.
There is a pressing need for greater clarity on what the Welsh Government wants to achieve
through the Bill beyond the high-level objective of enhancing the well-being of the people of
Wales by improving public services. It needs greater focus on clear, tangible outcomes to deliver
on its potential and build on the processes it puts in place.
Placing social partnership on a legal footing would mirror the situation in several neighbouring
European countries who have strong workforces and productive economies. It would formalise
many of the practices Wales has built up in recent decades, most notably in response to the
COVID-19 pandemic.
The Bill sets out a framework to improve public procurement practices which focus on a broader
set of values than just cost. The aim of this approach will be keeping more money in circulation
locally - helping to build more resilient communities and more vibrant foundational economies.
To be truly bold, however, we want to see measurable targets set for procurement, including
the proportion of public money spent in Wales.
Implementing the Act, should it become law, will require the Welsh Government to work with
the devolved public sector to build capacity, capability and cultural change at a time where
budgets are likely to be squeezed. This will require creativity, effective collaboration and
leadership. The links with the Welsh Government’s broader policy objectives, particularly the
transition to Net Zero are also critical. From the response to the energy and food crisis, the
reform of agriculture and sustainable land management, this Bill has the potential to provide a
framework for action and collaboration.
The work to scrutinise the general principles of this Bill was informed by all who gave evidence.
Our sincere thanks goes to them, and to the Welsh Government for their positive engagement
Stage 1 report on the Social Partnership and Public Procurement (Wales) Bill
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during the introduction of this Bill to the Senedd. We look forward to the Deputy Minister’s
response to our recommendations for strengthening this important legislation.
Jenny Rathbone MS
Chair of the Equality and Social Justice Committee
Stage 1 report on the Social Partnership and Public Procurement (Wales) Bill
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Recommendations
Recommendation 1. A majority of the Committee recommend that the Senedd agrees the
general principles of the Social Partnership and Public Procurement (Wales) Bill. ................. Page 21
Recommendation 2. The Welsh Government should work with social partners as a matter of
urgency to agree:
▪ the tangible, headline outcomes that it wants to achieve through this Bill;
▪ the key metrics that it will use to measure these headline outcomes; and
▪ a narrative to tie these together into a cohesive vision. …………………………………. Page 21
Recommendation 3. The Welsh Government should more clearly define the role of the
Social Partnership Council by working with social partners to agree concise, outcomes-focused,
terms of reference for its work. This should be progressed as a matter of priority and no later
than one week before Stage 3 proceedings take place. ............................................................... Page 30
Recommendation 4. The Welsh Government should bring forward amendments to section
7(5) of the Bill at Stage 2 to include either a duty to consult, or seek the approval of, other Social
Partnership Council members before making revisions to the Council’s procedures............ Page 31
Recommendation 5. In line with the need for a more clearly defined role and terms of
reference the Welsh Government should consult social partners on ways of working including
whether a ‘task and finish’ approach would lead to better, tangible outcomes on some issues.
The Welsh Government should set out whether it intends to create any additional sub-groups,
and if so what role and functions it expects those sub-groups to perform. ............................. Page 31
Recommendation 6. In setting out its intentions as regards the creation of additional sub-
groups, the Welsh Government should:
▪ consult prospective social partners on preferred ways of working including whether a
‘task and finish’ approach would lead to better outcomes on certain issues; and
▪ confirm whether it intends to bring forward amendments to include these on the
face of the Bill in line with the current provisions relating to the public procurement
sub-group. …………………………………………………………………………………………………………. Page 31
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Recommendation 7. The Welsh Government should bring forward amendments at Stage 2
to place a requirement on the Wales TUC to nominate a certain proportion of non-affiliated
union members to the Social Partnership Council as part of the nomination process. ....... Page 32
Recommendation 8. The Welsh Government should prioritise holding early discussions with
social partners to ensure that the processes for appointing the Social Partnership Council
includes ambitious requirements for diversity of representation which take into account all
protected characteristics and ensure a broad geographical spread. ........................................ Page 32
Recommendation 9. The Welsh Government should set out in response to this report:
▪ the evidence it has to substantiate its view that a formal mediation mechanism on
the face of the Bill is not required including details of how it has consulted with social
partners;
▪ its preferred mechanism for dispute resolution in instances where public bodies are
perceived not to be meeting their obligations under the social partnership duty; and
▪ guidance on the circumstances in which its preferred mechanism would be used.
……………………………………………………………………………………………………………………………. Page 42
Recommendation 10. The Welsh Government should produce guidance to support public
bodies to incorporate fair work into their well-being objectives, and should set out how it
expects this guidance to improve the number of public bodies setting fair work-related well-
being objectives in the future. This work should be completed ahead of the legislation coming
into force. ................................................................................................................................................... Page 46
Recommendation 11. The Welsh Government should consider whether the Future
Generations Commissioner’s Office has sufficient, sustainable funding and resources to give fair
work the priority it needs, as envisaged by the Bill. If gaps in the ability of the Commissioner’s
Office to do this are identified, the Welsh Government should allocate additional resource to
enable these to be addressed. This work should be completed before Stage 3 proceedings take
place and the Regulatory Impact Assessment should be updated accordingly. .................... Page 46
Recommendation 12. The Welsh Government should bring forward amendments to section
24(1) of the Bill so that it sufficiently considers the global responsibilities that public bodies have
as well as those to their local area. ..................................................................................................... Page 56
Stage 1 report on the Social Partnership and Public Procurement (Wales) Bill
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Recommendation 13. The Welsh Government should hold discussions with the Office for
National Statistics and the Charity Commission to determine whether making Further Education
Institutions, Higher Education Institutions and Registered Social Landlords subject to the socially
responsible public procurement duty would negatively impact on their national accounting
status and/or charitable status. Should there be no impact on these, it should add these bodies
to the list of contracting authorities subject to this duty. .............................................................. Page 57
Recommendation 14. The Welsh Government should set out how it proposes that the Public
Sector Equality Duties procurement regulation and the socially responsible procurement duty
align, and how it intends to ensure that public bodies subject to both duties understand how the
duties will work together. ....................................................................................................................... Page 57
Recommendation 15. The Welsh Government should bring forward amendments at Stage 2
which place a requirement on Welsh Ministers to set targets for the proportion of procurement
spent in Wales and spent with specific types of suppliers such as SMEs or social enterprises.
While time will be needed for the precise mechanics of data-gathering and monitoring to be
worked out, these should be set within one year of implementation of the Act and no later than
three years after its coming into force. .............................................................................................. Page 58
Recommendation 16. The Welsh Government should bring forward amendments at Stage 2
to amend section 40(3) of the Bill to require contracting authorities to include the address of the
contractor on the register for each contract and any other information required to facilitate
data-gathering and monitoring needed for the setting of procurement targets. ................. Page 58
Recommendation 17. The Welsh Government must prioritise ensuring that the procurement
workforce has the capacity and capability to implement the new procurement and contract
management duties of the Bill and provide the training necessary to do so. This training should
be in place before the coming into force of the legislation and the RIA updated to reflect the
estimated costs. ........................................................................................................................................ Page 66
Recommendation 18. The Welsh Government should take steps to ensure that public bodies
are able to collaborate effectively to build capacity, capability, and expertise by setting out in its
response to this report:
▪ a clarification of the roles and relationship between the Procurement Centre of
Excellence and the SPC’s procurement sub-group;
▪ how it intends to ensure that the Procurement Centre of Excellence and SPC’s
procurement sub-group will play a role in driving the collaboration agenda forward.
…………………………………………………………………………………………………………………………….. Page 66
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Recommendation 19. The Welsh Government should work with industry bodies and
representatives involved in construction procurement to develop robust guidance on how
socially responsible procurement obligations and risk should be shared through the whole of
the supply chain and also seek to address related cultural and behavioural issues. ............. Page 67
Recommendation 20. The Welsh Government should set out how it will ensure that
reporting requirements in the Bill are streamlined to ensure an appropriate balance between the
need to increase transparency; keep the administrative burden placed on public bodies to a
minimum; and avoid duplication of reporting requirements from other duties. ................... Page 67
Recommendation 21. The Welsh Government should set out how Welsh Government
procurement investigations will interact with existing powers held by the Future Generations
Commissioner, and how its approach as envisaged in the legislation will add value and avoid
duplication. ................................................................................................................................................ Page 67
Recommendation 22. The Welsh Government should set out the criteria that would trigger
an investigation under section 41 of the Bill and its position on the need to consult the Auditor
General for Wales before the commencement of such an investigation. ................................ Page 68
Recommendation 23. The Welsh Government should bring forward amendments at Stage 2
detailing the criteria that would trigger an investigation under section 41 on the face of the Bill.
...................................................................................................................................................................... Page 68
Recommendation 24. The Welsh Government should make a commitment to publish the
statutory guidance in draft form for consideration by stakeholders and the Senedd with a
minimum consultation period of six sitting weeks. ......................................................................... Page 68
Recommendation 25. The Welsh Government should liaise with public bodies in response to
concerns that the RIA underestimates the potential costs arising as a consequence of the Bill
and bring forward a revised RIA at the end of Stage 2 to reflect any changes required. .... Page 71
Recommendation 26. The Welsh Government should work with employers and the trade
union movement to understand whether extra facility time will be needed for trade unions to
fulfil their obligations relating to the Bill and provide this detail via an updated Regulatory
Impact Assessment by the end of stage 2 to reflect the potential costs and benefits of this
additional facility time. ............................................................................................................................ Page 72
Recommendation 27. The Welsh Government should publish the agenda, minutes and
outputs for the Shadow Social Partnership Council. To enable transparency these documents
should be published before the end of 2022. ................................................................................. Page 72
Stage 1 report on the Social Partnership and Public Procurement (Wales) Bill
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Recommendation 28. The Welsh Government should publish any work undertaken to
evaluate and learn the lessons of the work of the Shadow Social Partnership Council at the
earliest opportunity and no later than July 2023. ........................................................................... Page 72
Stage 1 report on the Social Partnership and Public Procurement (Wales) Bill
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1. Introduction
The Bill was introduced in June 2022. We gathered evidence to
inform our scrutiny of the Bill from a policy perspective. Other
committees have looked at the Bill from a financial and a
constitutional perspective.
1. The Social Partnership and Public Procurement (Wales) Bill (the Bill) and
accompanying Explanatory Memorandum was introduced to the Senedd by Hannah Blythyn
MS, Deputy Minister for Social Partnership (the Deputy Minister) on 7 June 2022. The
Statement of Policy Intent was published on 8 June 2022.
2. The Bill was referred by the Business Committee to our Committee for scrutiny with a
reporting deadline of 18 November 2022.
Committee’s approach
3. The Committee’s Terms of Reference for this work were to consider:
▪ The general principles of the Bill and the need for legislation to deliver the stated
policy intention;
▪ The Bill’s key provisions (as indicated by section);
▪ Any potential barriers to the implementation of the Bill’s provisions and whether the
Bill takes account of them;
▪ The appropriateness of the powers in the Bill for Welsh Ministers to make
subordinate legislation (as set out in Chapter 5 of Part 1 of the Explanatory
Memorandum);
▪ Whether there are any unintended consequences arising from the Bill; and
▪ The financial implications of the Bill (as set out in Part 2 of the Explanatory
Memorandum).
Stage 1 report on the Social Partnership and Public Procurement (Wales) Bill
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Other Committees’ consideration
4. The Finance Committee took oral evidence from the Deputy Minister on 30 June 2022
and published their report on 18 November 2022.
5. The Legislation, Justice and Constitution Committee were unable to hold their planned
oral evidence session due to the period of National Mourning following the death of Her
Majesty the Queen and instead wrote to the Deputy Minister and received a response on 14
October 2022. The Legislation, Justice and Constitution Committee published their report on
18 November 2022.
Stage 1 report on the Social Partnership and Public Procurement (Wales) Bill
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2. General principles of the Bill
The evidence generally supported the Bill but question marks
remain over whether it will deliver tangible outcomes. A
majority of the Committee support the general principles of the
Bill subject to the Welsh Government’s response to the points
identified.
6. The Bill’s Explanatory Memorandum sets out the overarching objective, which is to provide
“a framework to enhance the well-being of the people of Wales by improving public services
through social partnership working, promoting fair work and socially responsible public
procurement”.1 In summary, the Bill makes provision for:
▪ the establishment of a Social Partnership Council;
▪ a statutory duty on certain public bodies to seek consensus or compromise with their
recognised trade unions or (where there is no recognised trade union) other
representatives of their staff, when setting their well-being objectives and delivering
on those objectives under section 3(2) of the Well-being of Future Generations Act
2015 (the WFG Act 2015);
▪ a statutory duty on Welsh Ministers to consult social partners, employers and worker
representatives through the Social Partnership Council when delivering on their well-
being objectives under section 3(2)(b) of the WFG Act 2015;
▪ amendment of section 4 of the WFG Act 2015 by substituting ‘fair work’ for ‘decent
work’ within the existing “A prosperous Wales” goal;
▪ a statutory duty on certain public bodies to consider socially responsible public
procurement when carrying out procurement, to set objectives in relation to well-
being goals, and to publish a procurement strategy;
1 Welsh Government, Social Partnership and Public Procurement (Wales) Bill Explanatory Memorandum – 7 June
2022
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▪ certain public bodies to carry out contract management duties to ensure that socially
responsible outcomes are pursued through supply chains; and
▪ reporting duties to be imposed on the public bodies and the Welsh Ministers in
relation to the Social Partnership Duty and Procurement duty.
7. Most of the evidence we received was supportive of the general principles of the Bill,
however, there were some organisations whose support was conditional.2
8. Professor Alan Felstead said there “is much to admire in the tabled Bill in terms of how it
strengthens the general principles of social partnership working and promotes consensual
decision-making which involves trade unions, employer representatives and government”.3
9. The Wales TUC similarly said: “we strongly welcome the Bill and believe it delivers on the
Welsh Government’s commitments to strengthen social partnership and put it on a statutory
footing, as well as deliver greater social value from procurement”.4
10. Trade unions affiliated to the Wales Trades Union Congress (TUC) were also supportive of
the general principles of the Bill. The National Education Union (NEU) Cymru welcomed the Bill
viewing it as a “positive means by which Wales can place social partnership on a statutory
footing”.5
11. Chwarae Teg supported the general principles of the Bill, but believed that it should be
aligned with existing equalities legislation to help create a more equal Wales. They wrote that
“the potential positive impact of these proposals will only be realised if every opportunity is
seized to mainstream equality into the provisions of the Bill and the implementation of new
duties”.6
12. Community Housing Cymru welcomed the Bill and asked for greater clarity on whether
Registered Social Landlords (RSLs) will come under its measures in the future. They argued that
the Welsh Government should set out the rationale for RSLs omission from the list of
organisations subject to the Bill, and suggested that individual members may act within the spirit
of the legislation alongside public bodies already included in the Bill.7
2 Written evidence, National Education Union Cymru; Digital Health and Care Wales; TUC Wales; Cwmpas; 3 Written evidence, Professor Alan Felstead 4 Written evidence, Wales TUC 5 Written evidence, NEU Cymru 6 Written evidence, Chwarae Teg 7 Written evidence, Community Housing Cymru
Stage 1 report on the Social Partnership and Public Procurement (Wales) Bill
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The need for legislation
13. We heard a number of arguments and justifications from stakeholders.
14. Mary Williams from Unite the Union highlighted an example of social partnership during
the pandemic when the Treasury, the TUC, and the CBI worked together on the Job Retention
Scheme. She argued however that this collaborative approach was not sustained for the
duration of the pandemic and that this was partly due to the lack of a statutory underpinning.8
15. Professor Ed Heery pinpointed that the Bill would be “more robust, less contingent,
dependent, on the wishes of a particular administration or set of Ministers or branch of the
public service”. He thought that the Bill had an “important symbolic value in inscribing the
principle of social partnership in law, demonstrating to the Welsh public more generally that this
is the objective of the Government”.9
16. Richard Tompkins and Sue Hill from NHS Wales Employers and Betsi Cadwaladr University
Health Board agreed with the need for the Bill highlighting the positive role that social
partnership played during the pandemic. Richard Tompkins added that placing it on a statutory
footing could “act as a catalyst for moving things forward in a much more co-ordinated way,
and a way that wouldn’t happen necessarily just organically”.10
17. Representatives of fire and rescue authorities argued that the legislation was needed to
“complement” existing practices and because current levels of engagement on social
partnership could vary.11
18. In contrast, others questioned the need for the Bill. Richard Selby, Chair of the Institute of
Directors (IOD) told us that while they appreciated the need “to work together and collaborate”
many IOD members questioned whether “the legislation [is] necessary and is the cost return for
it necessary?”.12
19. Liz Lucas, Head of Procurement for Caerphilly County Borough Council questioned the
need for the Bill as “many of the details within the Bill we’re all ready to actively undertake with
the current legislation”.13
8 Equality and Social Justice Committee, Record of Proceedings, paragraph 292 – 4 July 2022 9 Record of Proceedings, paragraph 227 – 11 July 2022 10 Record of Proceedings, paragraphs 207 – 213 – 27 June 2022 11 Record of Proceedings, paragraphs 308 – 314 – 27 June 2022 12 Record of Proceedings, paragraph 89 – 4 July 2022 13 Record of Proceedings, paragraph 12 – 11 July 2022
Stage 1 report on the Social Partnership and Public Procurement (Wales) Bill
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20. Ben Cottam of the Federation of Small Businesses Wales (FSB Wales) asked whether
legislation was needed “from the perspective of bringing businesses and business organisations
to the table […] given that we had been working effectively with a voluntary approach for many
years now”. He said that awareness and understanding of the social partnership legislation
among FSB members was low:
“On the point of whether this is registering, I think the blunt answer is ‘no’. I
have very, very few conversations, if any, that mention social partnership,
other than the ones that we would initiate with our members. I think the
concept of social partnership, particularly amongst smaller businesses, isn’t
particularly well understood. Where it becomes more practical and more
understandable is the constituent elements of what social partnership seeks
to achieve—so, for instance, fair work […] among my membership, there is a
real keenness to have that conversation about fair work, so legislation at least
provides for that consistency, but the understanding of social partnership is
very low from what we can see within small and medium-sized enterprises.”14
The Bill’s objectives versus outcomes
21. The overarching objective of the Bill is to “enhance the well-being of the people of Wales
by improving public services through social partnership working”. However, a number of
stakeholders were concerned about a lack of clarity regarding how to measure this objective,
the broader impact of the Bill and the extent to which the Welsh Government has set out clearly
how it intends to measure progress.
22. The Institute of Welsh Affairs (IWA) said that: “Although there is sound theory and
international experience underpinning the Bill, there needs to be a focus on outcomes - with
monitoring and evaluation a core part of this”.15
23. Leighton Jenkins of the CBI called for the development of “a narrative around the business
case” for the principles and outcomes intended from the Bill.16
24. Darren Williams of Professional and Commercial Services Union (PCS) said that one
outcome of the structures that the legislation seeks to create would be early engagement and
resolution of industrial disputes.17
14 Record of Proceedings, paragraph 93 – 4 July 2022 15 Written evidence, Institute of Welsh Affairs 16 Record of Proceedings, paragraphs 103 and 104 – 4 July 2022 17 Record of Proceedings, paragraph 230 – 4 July 2022
Stage 1 report on the Social Partnership and Public Procurement (Wales) Bill
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25. Nisreen Mansour of Wales TUC argued that greater representation and involvement of
workers in discussions around decarbonisation and a ‘just transition’ to a net-zero carbon
economy would be tangible examples of the Bill’s objectives being put into practice.18
26. Kirsty Cumming of Community Leisure UK said that while some aspects of the Bill would
necessarily be open to interpretation, “ensuring some degree of consistency and clarity right
across the country” would be important in achieving the outcomes that the Bill sets out to
achieve.19
27. On the issue of measurable outcomes and key performance indicators the Deputy Minister
told us that theory of change work for the Bill was completed in December 2021 as well as
“suggested data for measuring the outcomes in the three main components of the bill – fair
work, social partnership and socially responsible procurement. This work is being revisited to
reflect the final form of the Bill as introduced and will confirm outcomes in the spring of 2023”.20
In subsequent correspondence, the Deputy Minister acknowledged that many of the objectives
of the Bill were “not easily quantifiable”, and “that work to develop the evaluation framework for
the Bill has identified a number of potential high-level outcomes that I would hope to see
delivered”.21 They included: better quality employment and improved service delivery in the
public sector; enhanced productivity in the private sector; and more consistent application of
good practice in pursuing wellbeing goals through procurement.22
28. Challenged on the need for legislation the Deputy Minister acknowledged that in many
ways the Bill seeks “to formalise and strengthen existing arrangements”. She said that giving
existing social partnership arrangements a statutory underpinning would yield benefits including
greater consistency of approach among public bodies.23
29. The Deputy Minister argued that in some areas, the Bill went further than existing practices
and that the Welsh Government would seek to use guidance accompanying the Bill to “be more
explicit about what social partnership means in Wales, and set out those principles and
18 Record of Proceedings, paragraphs 232-233 – 4 July 2022 19 Record of Proceedings, paragraph 140 – 11 July 2022 20 Equality and Social Justice Committee, Correspondence from the Deputy Minister to the Chair regarding Social
Partnership and Public Procurement (Wales) Bill – 22 July 2022 21 Equality and Social Justice Committee, Correspondence from the Deputy Minister to the Chair regarding Social
Partnership and Public Procurement (Wales) Bill – 14 October 2022 22 Correspondence from the Deputy Minister to the Chair regarding Social Partnership and Public Procurement
(Wales) Bill – 14 October 2022 23 Record of Proceedings, paragraph 109 – 20 June 2022
Stage 1 report on the Social Partnership and Public Procurement (Wales) Bill
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expectations regarding the approach, and the shared commitments required from all
partners”.24
The Committee’s view
General principles
We note that most of the evidence received supported the general principles of the Bill.
However, there are a number of areas where stakeholders suggested changes or emphasised
the need for greater Welsh Government support and guidance and these are covered in
subsequent chapters. A minority of stakeholders questioned the need for the Bill. In terms of the
general principles, a majority of the Committee agree that the Senedd should support the Bill’s
passage at Stage 1. One Member disagreed.
Recommendation 1. A majority of the Committee recommend that the Senedd agrees the
general principles of the Social Partnership and Public Procurement (Wales) Bill.
The Bill’s overarching aims – to enhance the well-being of the people of Wales by improving
public services through social partnership working, promoting fair work and socially responsible
public procurement – are admirable but risk remaining unfulfilled unless the Welsh Government
sets out how it intends to achieve tangible outcomes in more detail. This must include working
with social partners to agree how to measure the impact of the legislation against its stated
objectives, should the Bill become law.
The Welsh Government also needs to articulate a clearer and more compelling narrative around
the need for the legislation and what it means in practice for social partnership in Wales. We
welcome the Deputy Minister’s commitment to be more explicit in this regard.
Recommendation 2. The Welsh Government should work with social partners as a matter of
urgency to agree:
▪ the tangible, headline outcomes that it wants to achieve through this Bill;
▪ the key metrics that it will use to measure these headline outcomes; and
▪ a narrative to tie these together into a cohesive vision.
24 Record of Proceedings, paragraph 109 – 20 June 2022
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3. Social Partnership Council
The creation of a tripartite Social Partnership Council is at the
heart of the proposed legislation. The Welsh Government must
ensure that it represents the breadth of the modern workplace
and the diversity of Wales today.
30. Section 1 of the Bill establishes the Social Partnership Council (referred to throughout as
‘SPC’ or ‘the Council’). According to the Explanatory Memorandum its core function is:
“to provide information and advice to the Welsh Ministers on certain matters.
This function is wider than merely advising the Welsh Ministers and could
include the creation or provision of, among other things, statistics, factual
summaries, copies of documents (whether publicly available or otherwise)
and so on. There is no explicit restriction on the type of information or advice
that the SPC can provide.”25
Role and operations of the SPC
31. While some organisations did not comment on the creation of the SPC, those who did
were mainly supportive.26
32. Chambers Wales, NHS Wales Employers and CBI Wales highlighted the role that the
Shadow Social Partnership Council played during the coronavirus pandemic during their oral
evidence.27
33. TUC-affiliated trade unions welcomed the development of a statutory SPC with the
National Union of Rail, Maritime and Transport Workers (RMT) stating that the tripartite
approach being taken is welcome and could provide a base for the creation of other forums
involving private sector employers and unions.28 NEU Cymru described the SPC as “a sensible
means by which to ensure that the Welsh Government can engage with the workforce”.29
25 Social Partnership and Public Procurement (Wales) Bill Explanatory Memorandum – 7 June 2022 26 Written evidence, Civil Engineering Contractors Association, Colegau Cymru, Equality and Human Rights
Commission Wales, Natural Resources Wales, Cwmpas, National Education Union Cymru, the IWA 27 Record of Proceedings, paragraph 215; paragraph 138 – 27 June and 4 July 2022 28 Written evidence, RMT 29 Written evidence, NEU
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34. Business representative organisations had a more nuanced view. Chambers Wales said
that the Shadow Social Partnership Council brought in during the pandemic demonstrated the
effectiveness of a “motivated group that could advise Ministers on complicated issues from all
angles of society”.30 However, their President Paul Slevin cautioned in oral evidence that “as the
pandemic has ebbed away, that hasn’t manifested itself, and, indeed, I think the last few social
partnership council meetings have been postponed or cancelled”.31 Chambers Wales also
argued that the SPC will need a clear mandate and concise agenda.32
35. Some were concerned that specifying membership of the SPC in the legislation could lead
to inflexibility.33 Ben Cottam of FSB Wales said that formalising the duties and structures of social
partnership risked creating “mechanisms that speak to social partnership and aren’t nimble
enough to respond to some of the other issues that are facing our members and facing the
economy”.34 FSB Wales wants clarification on how the Welsh Government is going to consult
businesses on economic issues, and wants the Council to sit alongside a separate mechanism
for interaction specifically on economic issues.35
36. The Welsh Local Government Association (WLGA) stated that local government has always
been supportive of local and national social partnership arrangements, and it supports the
establishment of the Council, but wanted to see streamlining of the wider social partnership
structures that already exist.36
37. The IWA stated that while it sees clear benefits to social partnership it will not “be a
panacea for workers’ rights”, and monitoring of outcomes achieved by the Bill will be needed,
for example around pay, working conditions and public services.37
38. Richard Tompkins of NHS Wales Employers said there needs to be greater consideration
of how voices not represented on the proposed SPC are heard, and that if the Council is “too
bogged down by bureaucracy…rather than actually looking at outputs and outcomes,” then it
would fail.38
39. The Wales TUC’s written evidence expressed concerns in relation to section 7 of the Bill
which covering the Council’s meetings, procedures and administrative support. In their view the
30 Written evidence, Chambers Wales 31 Record of Proceedings, paragraph 96 – 4 July 2022 32 Written evidence, Chambers Wales 33 Record of Proceedings, paragraph 236 – 27 June 2022 34 Record of Proceedings, paragraph 109 – 4 July 2022 35 Written evidence, Federation of Small Businesses (FSB) Wales 36 Written evidence, WLGA 37 Written evidence, Institute of Welsh Affairs 38 Record of Proceedings, paragraph 222 and 289 – 27 June 2022
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power under section 7(5) of the Bill which allows the Welsh Government to revise the Council’s
procedures, could give it “disproportionate” power compared to other members of the SPC.39
40. When asked what the purpose of including this power in the Bill, a lawyer supporting the
Deputy Minister said it is “a fairly standard provision”.40 The Deputy Minister said that SPC
members will be invited to comment on draft procedures prior to their publication.41
41. The Deputy Minister told us that in order to monitor and evaluate the impact of the SPC,
“much of the information and advice produced by the Social Partnership Council for Welsh
Ministers will be published,” adding that the Welsh Government were also “committed to a
comprehensive evaluation of the legislation” after implementation.42
Membership of the SPC
42. Section 2 sets out that the membership of the SPC will consist of three types of members:
Welsh Government members (comprising the First Minister and any number of Welsh Ministers
or Deputy Welsh Ministers, the Counsel General or any member of staff of the Welsh
Government), nine representatives of employers in Wales and nine representatives of workers in
Wales.
43. We heard a range of views regarding the proposed membership of the SPC with a
number of stakeholders calling for additional representation.
44. The Wales Council for Voluntary Action (WCVA) would like to see the voluntary sector
represented on the Council, both employer and worker representatives. It considered that
engagement with the sector should be one of the foundations of the Council rather than being
a tick-box exercise.43
45. Geraint Thomas of South Wales Fire and Rescue Service questioned whether sectors such
as his own, and the voluntary sector would be adequately represented on the SPC.44 Similarly,
Kirsty Cummings of Community Leisure UK expressed concerns around representation
(particularly of the voluntary sector) and emphasised the need to understand differences within
sectors.45
39 Written evidence, Wales TUC 40 Record of Proceedings, paragraph 79 – 3 October 2022 41 Record of Proceedings, paragraph 73 – 3 October 2022 42 Record of Proceedings, paragraphs 55 and 56 – 20 June 2022 43 Written evidence, Welsh Council for Voluntary Action (WCVA) 44 Record of Proceedings, paragraph 332 – 27 June 2022 45 Record of Proceedings, paragraph 174 – 11 July 2022
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46. Cwmpas (formerly the Wales Co-operative Centre) called for social enterprises to be
represented on the Council, as significant employers and as representatives of a business model
that could make a more significant contribution to achieving the Welsh Government’s well-
being goals.46
47. Dr Victoria Winckler of the Bevan Foundation argued for membership of the SPC to
include independent experts. She said:
“We have a lack of information, in my view, about the labour market in
Wales and different aspects of it, and I think there’s a risk—I’m not saying it
will happen, but there is a risk that you end up with polarised opinions based
on assumptions. I think if it’s going to achieve its full potential, I would like to
see people who have expertise in the labour market contributing and sitting
around that table. So, for example, if things are said for which there is no
evidence, that can be challenged.”47
48. On membership of the SPC the Deputy Minister emphasised the need to have a “workable
number” of members: “managing it as a council, rather than what I think would become a
conference.”. The Deputy Minister added that the tripartite membership as envisioned by the Bill
was “the right way forward” and that it would be possible to bring in independent and/or expert
voices through the SPC’s sub-groups.48
Representation of non-unionised workers
49. The WCVA questioned “how the low level of trade union membership in Wales” will affect
the impact of the legislation as “many voices will go unheard by the SPC”. It added that the lack
of representation of non-union workers on the SPC was a “serious concern”.49
50. Colleges Wales said that selecting worker representatives exclusively from trade unions
risked excluding a significant number of workers and could create a “two-tier system of worker
voice”.50 They highlighted recent statistics which show that in Wales in 2020, the proportion of
employees who were trade union members was 31.9 per cent (compared with a UK figure of
23.7 per cent).51 More recent data published by the UK Government shows that, in 2021, 35.6
46 Written evidence, Cwmpas 47 Record of Proceedings, paragraph 416 – 4 July 2022 48 Record of Proceedings, paragraphs 83 and 84 – 3 October 2022 49 Written evidence, WCVA 50 Written evidence, Colleges Wales 51 Figures taken from National Statistics/BEIS, Trade Union Membership, UK 1995-2020: Statistical Bulletin (May
2021)
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per cent of employees in Wales were members of a trade union, with 62.4 per cent of public
sector workers in Wales belonging to a trade union.52
51. The Equality and Human Rights Commission (EHRC) Wales also raised concerns,
highlighting its research showing that lower-paid workers from ethnic minority communities in
the health and social care sectors have limited opportunities to have their voice heard and are
less likely to be members of trade unions.53
Nomination processes for Council representatives
52. Section 5 of the Bill sets out the nomination process for SPC members, with section 5(2)
stating that the First Minister must seek nominations for worker representatives from the Wales
TUC.
53. Generally, we heard two distinct positions on this issue, with the Wales TUC and its
affiliates holding one view, and unions not affiliated to the Wales TUC and others holding
different views.
54. The Royal College of Nursing (RCN) Wales disagreed with the nomination process for
workers representatives and called for changes to section 5 so that non-TUC affiliated unions
such as themselves can engage with and be nominated to the SPC. The RCN suggested that this
could be done by amending the Bill to allow for nominations from “individuals who the First
Minister considers represent staff working from each category of employer“ (referred to in
section 3 of the Bill) as well as from the Wales TUC. The RCN argued that unless amended, the
Bill as drafted “could lead to non-TUC affiliated unions being left out of social partnership in
Wales and reduce their ability to cooperate and collaborate”.54
55. Colleges Wales also raised concerns about the Wales TUC being the nominating body for
worker representatives they consider this risks “privileging the views of union members”.55
56. Professor Phil Banfield of the British Medical Association (BMA) Cymru set out their
concerns regarding the SPC and the proposed nomination process:
“If its function displaces the work of other social partnership working, then it
threatens to slow down, obstruct, get in the way of effective social partnership
working that’s taking place, especially in the healthcare sector. It depends
52 Department for Business, Energy and Industrial Strategy, Trade union statistics 2021 53 Written evidence, Equality and Human Rights Commission Wales 54 Written evidence, RCN Wales 55 Written evidence, Colleges Wales
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who is on that social partnership council. And whereas with the draft Bill,
there was a discretion from the First Minister to appoint to the trade union
side someone with particular expertise in any particular sector, that’s
disappeared. So, we would caution and have concerns about the nominating
body being the TUC and, especially with regard to health, then potentially
excluding the independent unions, i.e. the doctors’ and the RCN.”56
57. Professor Banfield added that this was particularly important in the field of health:
“[…] sadly, the record of the NHS in Wales and health boards has been quite
patchy with regards to engagement of its staff, and particularly medical staff,
and we know that there’s a particular association between poor engagement
and then poor outcomes. So, we were unclear as to why the process changed
between the draft and the publication of the Bill, and it would seem sensible
for us either to allow for non-affiliated unions to be able to be nominated or
for nominations to not only be from the TUC, depending on what is felt to be
the appropriate topic and sector at that time.”57
58. The WCVA emphasised that transparency around the nomination and decision-making
process was vital “given the potentially huge influence the SPC may wield” and that it was
important to ensure that “trade unions who are not affiliated to the governing party are
represented”.58
59. The Wales TUC and NEU Cymru argued that the nomination process currently set out in
the Bill were appropriate. The Wales TUC said that it will “need to work with non-Wales TUC
affiliated trades unions to ensure they are invested in the SPC’s work” in the same way that it
currently does for the Workforce Partnership Council. It said that it will establish a ‘union side’
that democratically determines worker representative nominations to the SPC and also develop
protocols for how worker representatives engage with the wider trade union movement.59
60. Richard Tompkins of NHS Wales Employers emphasised the need to hear from
organisations and sectors not represented on the Council and highlighted that the TUC
engaged with non-affiliated organisations such as the Royal College of Nursing in relation to the
Workforce Partnership Council.60
56 Record of Proceedings, paragraph 311 – 4 July 2022 57 Record of Proceedings, paragraph 324 – 4 July 2022 58 Written evidence, WCVA 59 Written evidence, Wales TUC 60 Record of Proceedings, paragraph 228 - 230 – 27 June 2022
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61. Bethan Thomas of Unison argued that the current arrangements in place for the
Workforce Partnership Council could be replicated for the SPC:
“I think it’s important to note that we have had non-affiliated unions to the
TUC sit in Workforce Partnership Council seats. So, it isn’t the fact that they’re
not having a direct voice on some of these negotiating and consultation
bodies. That does happen with the system that is currently in operation.”61
62. Darren Williams of PCS highlighted the coordinating role of the Wales TUC as:
“[…]the obvious body to make these nominations as the umbrella
organisation of the organised trade union movement—there is a
commitment there to talk to the non-affiliated unions and ensure their
inclusion in the same way that they are at the moment.”62
63. The WLGA argued that the legislation should recognise employer organisations like
themselves in the employer representatives nominations process in the same way that the Wales
TUC is acknowledged in the process for worker representatives.63
64. In our first evidence session, the Deputy Minister told us that “there would be an
expectation that the nominations wouldn’t just be in respect of those trade unions that are
currently affiliated to the Wales TUC,”. Her official noted that the Welsh Government plans to
“make it incumbent upon the Wales TUC to bring forward nominations from that wider trade
union constituency”.64
65. We put the concerns of smaller and non-affiliated trade unions to the Deputy Minister
again during the second evidence session where she confirmed that the Welsh Government
would not be looking to amend the Bill to guarantee representation for non-affiliated trade
unions as part of the nomination process:
“Firstly, it’s not our intention to amend the Bill to legislate for that. As we said
at the outset, our position is we strongly encourage all representative bodies
to make diverse and inclusive nominations, as we’ve come to expect. I know
that, during their evidence to this committee, the Wales TUC, or union
representatives, intimated a commitment on behalf of Wales TUC to ensure
that non-affiliated unions are part of that process and that they ensure their
61 Record of Proceedings, paragraph 214 – 4 July 2022 62 Record of Proceedings, paragraph 217 – 4 July 2022 63 Written evidence, WLGA 64 Record of Proceedings, paragraphs 79 and 83 – 20 June 2022
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inclusion, the same way they would do for many aspects of work that we do
now as well. […] I know there is a commitment from Wales TUC to take on
board those concerns and to ensure that those unions are part of those
conversations and are able to be represented.”65
Equality, diversity and inclusion in relation to the Council’s operations
66. EHRC Wales set out a number of equality-related issues in respect of the SPC including
that in addition to “a prosperous Wales”, the Council should provide advice to the Welsh
Government on other well-being goals, particularly “a more equal Wales”. The EHRC would also
like the Welsh Government to provide clarity on how it will ensure the Council has diverse
membership. In addition, it called for an Equality and Human Rights sub-group for the Council
to ensure that “the promotion of equality and human rights is integral” in delivering fair work.66
67. Chwarae Teg called for the Bill to be amended to ensure a gender balanced and diverse
Council, and for the Welsh Government to place a requirement on SPC members to
demonstrate how they are committed to taking action on gender equality.67
68. The WCVA noted that lower levels of trade union membership among workers from
ethnic minority communities may mean that their voices could go unheard.68
69. The Welsh Language Commissioner’s Office (WLC) told us that prospective members of
the SPC should be required to have an understanding of Welsh language issues, and that this
requirement should be on the face of the Bill. The WLC’s submission also called for clarity on
how the SPC will be subject to Welsh Language Standards, how the Welsh language will be
considered in the SPC’s work, and the role that the language will play in its meetings and other
work.69
70. In terms of the appointments process, the Deputy Minister told us while the Welsh
Government had considered adopting “a full public appointments process for the SPC” this was
not compatible with the nomination process set out in the Bill. They would, however, consider
which aspects of the public appointments process could be mirrored or adopted including the
use of job descriptions and person specifications for SPC members.70
65 Record of Proceedings, paragraph 100 – 3 October 2022 66 Written evidence, EHRC Wales 67 Written evidence, Chwarae Teg 68 Written evidence, WCVA 69 Written evidence, Welsh Language Commissioner 70 Equality and Social Justice Committee, Correspondence from the Deputy Minister to the Chair regarding Social
Partnership and Public Procurement (Wales) Bill – 22 July 2022
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71. On the question of diversity, the Deputy Minister said that the Welsh Government intends
to work with social partners ahead of the SPC’s establishment to develop diversity requirements
for the SPC through its procedures.71
72. We asked the Deputy Minister to clarify whether the SPC will be subject to the Welsh
Language Standards; she said that “procedures will be drafted to provide for use of the Welsh
language during SPC business, and be inclusive of Welsh language speakers and promote the
use of the language nationally, and that will inform part of the Social Partnership Council’s
published procedures”.72
The Committee’s view
Role and operation of the Social Partnership Council
Proposals for the creation of a tripartite Social Partnership Council are at the heart of the Bill.
Placing existing social partnership arrangements on a statutory footing presents both challenges
and opportunities. We heard that the Shadow Social Partnership Council played an important
role during the pandemic and a new SPC, enshrined in law, will hopefully build on its work and
provide greater assurance of the Welsh Government’s commitment to the principle of social
partnership. It must be recognised, however, creating the SPC in and of itself will do little to
advance the Welsh Government’s overarching objectives unless the Council has a clear focus for
its work. It will need concise terms of reference and robust procedures.
We believe that the role and focus of the SPC’s work needs to be more clearly defined and that
the Welsh Government should work with partners to achieve this as a matter of priority. On
procedure, we share the concerns expressed to us that the powers under section 7(5) of the Bill
allowing the Welsh Government to revise the Council’s procedures risk giving Ministers
disproportionate power over other members of the Council and do not reflect the spirit of social
partnership being espoused in the legislation. We are clear therefore that the Welsh
Government must amend this provision to include either a duty to consult with, or seek the
approval of, other SPC members before making revisions to the SPC’s procedures.
Recommendation 3. The Welsh Government should more clearly define the role of the
Social Partnership Council by working with social partners to agree concise, outcomes-focused,
71 Record of Proceedings, paragraph 92 – 20 June 2022 72 Record of Proceedings, paragraph 97 – 3 October 2022
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terms of reference for its work. This should be progressed as a matter of priority and no later
than one week before Stage 3 proceedings take place.
Recommendation 4. The Welsh Government should bring forward amendments to section
7(5) of the Bill at Stage 2 to include either a duty to consult, or seek the approval of, other Social
Partnership Council members before making revisions to the Council’s procedures.
The SPC’s sub-groups
The provisions for the creation of a public procurement sub-group of the SPC are
understandable given the emphasis of the proposed legislation on procurement. It is less clear,
however, why this sub-group is prioritised for inclusion on the face of the Bill above any other
potential sub-groups. We note that several ideas were put forward for additional sub-groups to
cover issues such as the third sector, social enterprises, and fair work. They were also identified
by some as a potential way for the SPC to include other, independent voices, technical advice
and expertise. We believe that the Welsh Government should set out more clearly its intentions
for the creation of additional SPC sub-groups and the role it expects these sub-groups to play.
We expect the Welsh Government to set out whether it intends to include provisions for any
additional sub-groups on the face of the Bill and if not, outline its reasons.
Recommendation 5. In line with the need for a more clearly defined role and terms of
reference the Welsh Government should consult social partners on ways of working including
whether a ‘task and finish’ approach would lead to better, tangible outcomes on some issues.
The Welsh Government should set out whether it intends to create any additional sub-groups,
and if so what role and functions it expects those sub-groups to perform.
Recommendation 6. In setting out its intentions as regards the creation of additional sub-
groups, the Welsh Government should:
▪ consult prospective social partners on preferred ways of working including whether a
‘task and finish’ approach would lead to better outcomes on certain issues; and
▪ confirm whether it intends to bring forward amendments to include these on the
face of the Bill in line with the current provisions relating to the public procurement
sub-group.
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Nominations and membership of the SPC
Individual members of the SPC will play a crucial role in shaping the future social partnership
agenda in Wales if this Bill becomes law. We heard concerns, however, with regards to the
process for nominating and appointing its members, particularly on the employee side. Unlike
the Draft Bill, the provisions of the Bill as introduced mean that the First Minister can only
appoint employee representatives that have been nominated by Wales TUC Cymru. Limiting the
nominations solely to those nominated by the Wales TUC could risk leaving a significant number
of workers, including the non-unionised, without a voice on the SPC. Furthermore other trade
unions who are not affiliated to the TUC raised concerns about the implications of the proposed
nomination process on some sectors with a high concentration of non-affiliated unions but who
form a significant part of the public sector in Wales including healthcare.
There are existing processes to involve non-affiliated trade union members, most notably with
regards to the Workforce Partnership Council. These processes could be adopted for the SPC
and we welcome the assurances received in that regard from the Wales TUC. Verbal assurances,
however, are no substitute for legal provisions. We would like to see provisions for non-affiliated
trade union members strengthened. The most straight forward way to achieve this would be to
amend the Bill and place a requirement on the Wales TUC to nominate a certain proportion of
non-affiliated union members to the SPC as part of the nomination process. This would provide
a legal safeguard which we think would go a long way to addressing the concerns of non-
affiliated trade unions and the members they represent.
Recommendation 7. The Welsh Government should bring forward amendments at Stage 2
to place a requirement on the Wales TUC to nominate a certain proportion of non-affiliated
union members to the Social Partnership Council as part of the nomination process.
It is vitally important that membership of the SPC represents the diversity of the Wales of today
and of tomorrow. To help to achieve this, the Welsh Government should play a leading role in
setting and agreeing ambitious requirements in terms of diversity of representation in the
appointments made to the SPC. As well as aiding transparency, the publication of job
descriptions and person specifications for SPC members could also help to attract a more
diverse range of nominees and we welcome the fact that the Deputy Minister is looking into this
in more detail.
Recommendation 8. The Welsh Government should prioritise holding early discussions with
social partners to ensure that the processes for appointing the Social Partnership Council
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includes ambitious requirements for diversity of representation which take into account all
protected characteristics and ensure a broad geographical spread.
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4. The social partnership duty
If the Bill becomes law, a new social partnership duty will require
many devolved public bodies to “seek consensus or
compromise” in certain circumstances.
73. Sections 16 to 19 cover arrangements for the creation of a new social partnership duty on
certain public bodies. The new duty created by section 16 would require specified public bodies
to, in so far as is reasonable, “seek consensus or compromise” primarily with their recognised
trade unions when setting wellbeing objectives and making decisions of a strategic nature to
achieve those objectives under the Well-being of Future Generations Act 2015.73 Where a public
body does not have a recognised trade union, they must “seek consensus or compromise” with
representatives of its workforce.
74. A number of organisations welcomed the introduction of this duty including NEU Cymru,
Unite the Union, GMB, the IWA, Colleges Wales, EHRC Wales and the WLGA.74 The IWA told us
that a duty to “seek consensus and compromise” could provide an additional incentive for
public bodies who do not have formal social partnership arrangements to establish these, and
that the duty to jointly publish an annual report agreed with workforce representatives is key.75
75. Darren Williams of PCS told us that the new duty “takes the culture that we’ve built up in
Wales over the last decade or so to another level and ensures that there is recourse for any
concerns that unions or anyone else might feel exist about the arrangements with employers”.76
76. The WLGA said that the duty offers an opportunity to develop a consistent understanding
of social partnership to inform practice across different organisations.77
77. Colleges Wales argued that the duty has the potential to increase the impact of well-being
objectives of the Well-being of Future Generations Act 2015 (WFG Act 2015).78
78. The WCVA and Wrexham County Borough Council raised concerns about the introduction
of the duty. The WCVA believed that, while public bodies should seek consensus with staff, this
73 Explanatory Memorandum; see also the Well-being of Future Generations Act 2015 74 Written evidence, NEU Cymru; Unite the Union; GMB; the IWA; Colleges Wales; EHRC Cymru; WLGA 75 Written evidence, the IWA 76 Record of Proceedings, paragraph 228 – 4 July 2022 77 Written evidence, WLGA 78 Written evidence, Colleges Wales
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should not just involve trade unions. WCVA also said that seeking consensus between public
bodies and unions should not involve compromise on areas such as equality and environmental
commitments.
79. Wrexham County Borough Council stated that the duty has the potential to “unfairly
elevate” the contribution of trade unions above other stakeholders that public bodies engage
with in developing their well-being objectives. They called for greater clarity around the wording
of the duty stating that “the word ‘seek’ is ambiguous and it is not clear what process would be
followed if consensus could not be reached”. They argued that where an employer and trade
unions have different objectives, reaching a consensus may be unachievable.79
80. EHRC Wales and Audit Wales both called for clarification on what the new duty will mean
in practice. Both organisations called for further guidance on what “decisions of a strategic
nature” means in practice, and Audit Wales would like Ministers to set out how “consensus and
compromise” can be achieved in social partnership to meet this element of the duty.80
81. How to apply the new duty in practical terms was a key question for the Bevan
Foundation. Dr Victoria Winckler said:
“The principle of duties—it’s not something you can object to, but I think the
challenge is turning that into practical action, and I think there needs to be
policy development that looks at the how.[…] It’s all very well saying, ‘Here’s a
duty’, but I think because this is in fairly uncharted territory, I think there
needs to be more about the how and also probably help to grease the wheels
to help people to find solutions, help the public bodies to find the solutions
that they’re being asked to find. I mean, it would be lovely if there was some
sort of innovation fund around this to help and support people to develop
solutions.”81
Public bodies covered by the duty
82. Some stakeholders called for additional public bodies to be covered by the new duty. NEU
Cymru called for further and higher education institutions and the Tertiary Education and
Research Commission for Wales to be added to the list of bodies covered by the duty.82
79 Written evidence, Wrexham County Borough Council 80 Written evidence, EHRC Wales; Audit Wales 81 Record of Proceedings, paragraph 426 – 4 July 2022 82 Written evidence, NEU Cymru
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83. The Wales TUC argued that this Bill and the WFG Act 2015 should be amended so that
“the entire public sector can benefit”, including schools.83 This view was echoed by Bethan
Thomas of Unison who expressed disappointment that the duty did not extend to governing
bodies of schools, higher and further education. She said: “If there was ever a sector that could
benefit from developing social partnership moving forwards, it is that sector”.84
84. The RMT welcomed the proposals to include Transport for Wales under the scope of the
Bill, subject to the outcome of the Welsh Government proposal to make it and seven other
public bodies subject to the WFG Act 2015.85
85. The TUC, PCS, Unison, Unite and GMB all agreed that other public sector organisations
such as the further and higher education sectors, RSLs and the Welsh Ambulance Service NHS
Trust should be considered for inclusion under the scope of the legislation.86
86. During our first session with the Deputy Minister, we were told that the definition of higher
and further education institutions for the purpose of national accounts made it difficult for them
to be covered by the duty. An official for the Deputy Minister said:
“The Office of National Statistics is the body that defines which are public
sector organisations, which are private and which are these odd kind of
middle category not-for-profit institutions serving households—NPISH. And
currently, both FE and HE institutions—I can’t speak for RSLs—are classified
as not-for-profit institutions serving households. I don’t think the ONS
interest in that question has ever gone away, really. So, whereas we legislated
some time ago, it is still eminently possible that another route, albeit we have
a route within the legislation for regulation so it might change the status of
FE, HE or RSLs in the future, another route might be outside our control in
the form of any current or future reviews by ONS as to the status of those
bodies for national accounting purposes.”87
87. The Deputy Minister and her official expanded on this in the second evidence session,
during which she confirmed that the Welsh Government had not held discussions with the
Office for National Statistics on this matter.88
83 Written evidence, Wales TUC 84 Record of Proceedings, paragraph 235 – 4 July 2022 85 Written evidence, RMT 86 Record of Proceedings, paragraphs 259 - 264 – 4 July 2022; paragraph 379 – 4 July 2022 87 Record of Proceedings, paragraph 50 – 20 June 2022 88 Record of Proceedings, paragraph 113 – 3 October 2022
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Relationship with the well-being duty
88. The Welsh Government recently reviewed the coverage of the well-being duty in the WFG
Act 2015, and has consulted on potentially making another eight bodies subject to this duty.89
This is relevant to the social partnership duty, as to be covered by this duty a body must be
classed as a public body under section 6(1) of the WFG Act 2015. The consultation also included
details of the criteria the Welsh Government uses to decide whether a body should be subject
to the WFG Act 2015.
89. These criteria are that a body subject to the WFG Act 2015 must be a public body; that it is
over 50 per cent publicly funded; that it undertakes actions that impact on economic, social and
well-being in Wales or their local area; that it has strategic functions; and that the Auditor
General has the authority to audit it.
90. The Welsh Government set out its rationale for not including other bodies in the
consultation document, stating that, in respect of Higher Education Institutions (HEIs) and
Further Education Corporations (FECs):
“HEI and FECs are excluded because they are Non-profit institutions serving
households independent of government control and they are not auditable.
The Tertiary Education and Research (Wales) Bill (‘the Bill’) provides for the
establishment of a new Commission for Tertiary Education and Research. The
Commission for Tertiary Education and Research will be the regulatory body
responsible for the funding, oversight and regulation of tertiary education
and research in Wales. The Bill provides for the dissolution of the Higher
Education Funding Council for Wales which is one of the existing public
bodies subject to the individual body well-being duty. These duties will
transfer to the new Commission.
In addition, the Bill creates a duty for the Commission to promote the pursuit
of a civic mission by tertiary education providers in Wales that are institutions
within the higher and further education sectors. ‘Civic mission’ is defined in
subsection (3) as, ‘action for the purpose of promoting or improving the
economic, social, environmental or cultural well-being of Wales (including
89 Welsh Government, Consultation on the additional public bodies subject to the well-being duty (Part 2) of the
Well-being of Future Generations (Wales) Act 2015
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action aimed at achieving any of the well-being goals in section 4 of the
Well-being of Future Generations (Wales) Act 2015 (anaw 2))’.”90
91. Registered Social Landlords are also not included under the scope of the WFG Act 2015 by
the Welsh Government due to the varied levels of public funding they receive.91
The social partnership duty and other existing duties
92. In placing a new social partnership duty on public bodies, it was noted by Chwarae Teg
that these legal duties overlap in some instances. They told us that more work would be needed
to align public bodies’ processes and to minimise duplication and pressure on resources.
Furthermore they argued that the alignment of reporting duties for this Bill, Welsh Specific
Equality Duties and the WFG Act 2015 would help to “bring in the equalities analysis that we
believe is critical”.92
93. Similarly EHRC Wales described “potential synergies” in aligning the social partnership duty
with the Public Sector Equality Duties while expressing concern that there are not referred to
either in the Bill or the Explanatory Memorandum.93
94. The Wales TUC has suggested that the Bill could be amended to allow for future
expansion of the social partnership duty so that it requires public bodies to consult with trade
unions in relation to the Public Sector Equality Duties and the Socio-Economic Duty.94
Compliance with the duty
95. Section 18 requires each public body to produce annual reports setting out compliance
with the social partnership duty.
96. The Bevan Foundation highlighted “very limited evidence that the imposition of duties on
public bodies results in material improvements” and that it can encourage public bodies to
engage in a “tick-box” exercise.95 An Audit Wales report on Equality Impact Assessments
90 Welsh Government, Consultation on the additional public bodies subject to the well-being duty (Part 2) of the
Well-being of Future Generations (Wales) Act 2015 91 Welsh Government, Consultation on the additional public bodies subject to the well-being duty (Part 2) of the
Well-being of Future Generations (Wales) Act 2015 92 Written evidence, Chwarae Teg 93 Written evidence, EHRC Wales 94 Written evidence, TUC Wales 95 Record of Proceedings, paragraph 410 and 411 – 4 July 2022; Bevan Foundation “Our view on the Draft Social
Partnership Bill
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published in September 2022 expressed similar concerns in relation to assessments carried out
under the Public Sector Equality Duty.96
97. Our trade union witnesses had little appetite for the idea of financial penalties or sanctions
as means of ensuring compliance. PCS described the suggestion as “counterproductive” and
Mary Williams of Unite said it was “a tough argument in the current climate”.97
98. Bethan Thomas of Unison argued that while compliance was challenging, learning lessons
from elsewhere would be necessary:
“I think it is very difficult, when we’re talking about public money, to say that
there should be fines associated with anything like that, because, essentially,
we’re talking about public money just being recycled. But I think it is
something that should be considered as part of the discussions around the
Bill about what compliance could look like, how we strengthen that reporting
duty.”98
99. Nisreen Mansour from the Wales TUC called for the development of “an ACAS-style body”
to be explored further and said that the focus should be about building relationships.99
100. Tom Hoyles from GMB supported a mediation-focused approach stating that: “We’d be
very open to that…framing it around conflict resolution is what we do, what we work best with,
and I think we’d be broadly in favour of that”.100 Mary Williams of Unite also voiced her support
for this approach.
101. Professor Philip Banfield of BMA Wales raised concerns about the ability of public bodies
and unions to agree on social partnership reports in sectors such as healthcare where there are
a large number of unions and additional complexities.101
102. Responding to concerns that the new duty could become a tick-box exercise, the Deputy
Minister told us that this was something they were “alive to when drafting the legislation”. Her
official expanded on this point:
“It’s a common criticism of Government, isn’t it, that we tend to adopt a sort
of catapult approach to policy development and implementation? We come
96 Audit Wales, Equality Impact Assessments: More than a Tick Box Exercise? 97 Record of Proceedings, paragraph 239 and 348 – 4 July 2022 98 Record of Proceedings, paragraph 237 – 4 July 2022 99 Record of Proceedings, paragraph 241 – 4 July 2022 100 Record of Proceedings, paragraph 356 – 4 July 2022 101 Record of Proceedings, paragraph 338 – 4 July 2022
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up with what sound like impressive policies within Government, we chuck
them over the walls and we expect something to happen with them; we
expect public bodies or others out there to deliver on the promises that we’ve
made as a Government. We’re not doing that in this case. We’re seeking here
to put in place the mechanics, the nuts and bolts, of a system that will allow
us to drive improvement over time, which will allow us to track how well the
system is performing, will allow us to measure to what extent social
partnership is in fact contributing to the improvement of well-being through,
in part, the improvement of public services in Wales.”102
103. In response to our request to outline the Welsh Government’s approach if the SPC were to
receive a substantial number of requests to mediate where the social partnership duty has
potentially not been met, the Deputy Minister said: “Mediation is not a function of the Social
Partnership Council”.103
Separate duties for Welsh Ministers
104. Section 17 of the Bill creates a separate social partnership duty for Welsh Ministers which
does not require them to consult with trade unions or the Social Partnership Council in
developing their well-being goals.
105. The Deputy Minister argued that the process for setting well-being objectives by Welsh
Ministers meant that a separate duty was necessary and that “to do otherwise would obviously
undermine the democratic process”.104 The Deputy Minister reiterated her view that a separate
duty was “appropriate” during the second evidence session, and argued that “other bodies,
which include local authorities are not set[-ting their well-being objectives] within electoral
timescales” leading to an approach which was “more general in nature”.105
106. Audit Wales stated that if the argument for a separate duty for Welsh Ministers is
accepted, a separate duty for elected local authorities where the controlling group has been
elected after issuing a clear policy manifesto should also be considered.106
107. The Wales TUC’s submission similarly argued that Welsh Ministers should be under a duty
to consult with the SPC on its well-being objectives describing the separate duty as an “odd
102 Record of Proceedings, paragraphs 35 and 36 – 3 October 2022 103 Equality and Social Justice Committee, Correspondence from the Deputy Minister to the Chair regarding Social
Partnership and Public Procurement (Wales) Bill – 14 October 2022 104 Record of Proceedings, paragraph 50 – 20 June 2022 105 Record of Proceedings, paragraph 124 – 3 October 2022 106 Written evidence, Audit Wales
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exception to the principles behind the SPC’s role and the idea that social partners should have a
role in relation to setting well-being objectives”.107
The Committee’s view
The Social Partnership duty
The proposed Social Partnership duty should help to bring about greater consistency in social
partnership arrangements across a significant proportion of the public sector in Wales.
However, which organisations within the devolved public sector are covered by the duty was a
key area of contention. We heard calls, primarily from trade unions, for extension of the duty to
cover other bodies in receipt of significant public funding, including further and higher
education institutions, and Registered Social Landlords. According to the Deputy Minister,
however, this is made difficult by their status under Office for National Statistics rules as not-for-
profit institutions serving households rather than being classed as within the public sector.
We note these potential challenges around the accounting status of organisations, however we
consider it to be anomalous that this is used by the Government as a key determinant of
whether organisations in receipt of considerable public funding are covered by this important
duty.
Furthermore, the Welsh Government has clear criteria for making further bodies subject to the
well-being duty in the WFG Act 2015 including: that they are at least 50 per cent publicly
funded; undertake strategic functions; and that the Auditor General has the authority to audit
them.108 These criteria have been applied for the recent review and many of the bodies
suggested to us for inclusion under this Bill do not meet them.
On balance, we do not recommend making additional bodies subject to the social partnership
duty, and have instead prioritised widening the coverage of the socially responsible public
procurement duty (addressed later in this report).
Enforcement and compliance
While the evidence on compliance does not favour punitive sanctions or enforcement
measures, the Bill is currently silent on the issue of mediation and dispute resolution. In cases
where public bodies may not be meeting the duty, we think a more proactive approach is
107 Written evidence, Wales TUC 108 For a full list of criteria see: Welsh Government, Consultation on the additional public bodies subject to the well-
being duty (Part 2) of the Well-being of Future Generations (Wales) Act 2015
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needed. As a first step, the Welsh Government should publish the evidence it has to
substantiate its view that a formal mediation mechanism on the face of the Bill is not required,
including details of any consultation it has had with social partners. It should also outline its
preferred mechanism for dispute resolution including guidance on the circumstances in which
its preferred mechanism would be used.
Recommendation 9. The Welsh Government should set out in response to this report:
▪ the evidence it has to substantiate its view that a formal mediation mechanism on
the face of the Bill is not required including details of how it has consulted with social
partners;
▪ its preferred mechanism for dispute resolution in instances where public bodies are
perceived not to be meeting their obligations under the social partnership duty; and
▪ guidance on the circumstances in which its preferred mechanism would be used.
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5. Fair work
Since the Draft Bill, the Government changed key provisions
relating to fair work. These changes made the provisions
broader, but potentially weaker.
Changes from the Draft Bill
108. The Draft Bill included provisions which would have created a “Fair Work Goal” and placed
a duty on Welsh Ministers to set and publish fair work objectives, take all reasonable steps to
achieve these, and lay an annual report before the Senedd on progress made in achieving
objectives. These provisions were replaced by section 20 of the Bill, which amends the “A
Prosperous Wales” goal in the WFG Act 2015 to replace “decent work” with “fair work”.
109. Concerns were raised by Professor Alan Felstead and Chwarae Teg about differences in
how fair work was included in the Draft Bill and the Bill as introduced. Chwarae Teg questioned
the extent to which the new provisions of the Bill as introduced would drive meaningful
change.109 Similarly, Professor Felstead told us that the changes had the potential to weaken the
Bill, as the approach taken placed fair work alongside other competing priorities within the “A
prosperous Wales” goal and could weaken outcomes. Professor Felstead also stated that “what
gets defined gets done”, and expressed concern that there is no definition of fair work in the Bill
introduced into the Senedd although he thought this may be to do with the boundaries of the
devolution settlement.110
110. FSB Wales suggested that the definition of fair work developed by the Fair Work
Commission does not fit within the current devolution settlement, and questioned whether
instead of giving the definition legal force, a better approach would be to use it as a governing
principle to shape the legislation.111
111. The Deputy Minister considered the current provisions to be an improvement on the Draft
Bill as they covered public bodies and not just the Welsh Government, reflecting the role that
109 Written evidence, Chwarae Teg 110 Record of Proceedings, paragraph 234 – 11 July 2022 111 Written evidence, FSB Wales
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public bodies have in leading by example, and did not introduce separate reporting
requirements.112
Fair work in the Bill as introduced
112. Section 20 of the Bill amends the “A Prosperous Wales” goal in the WFG Act 2015 to
replace “decent work” with “fair work”. The provision places requirements on public bodies to
consider fair work when setting and taking action to meet objectives designed to maximise their
contribution to achieving the overarching well-being goal.
113. A number of bodies welcomed this approach including EHRC Wales, the RMT, the IWA,
Colleges Wales, and the WCVA.113
114. Civil Engineering Contractors Association (CECA) Wales told us that “the principles of ‘fair
work’ or ‘decent work’ should apply to all workers in Wales not just those in the public sector,”
and that the Bill would need to address the “potential anomaly between lowest price awards for
construction contracts and ensuring decent work”.114
115. Shân Morris and Helen Rees representing fire and rescue authorities argued against a
‘one-size-fits-all’ approach to the fair work objective and highlighted the different employment
models and structures of their sector (with many firefighters being retained on an on-call basis)
as an example.115
116. The Deputy Future Generations Commissioner (DFG Commissioner), Marie Brousseau-
Navarro, said that “one of the most striking findings” from analysis of well-being objectives was
that public bodies focus on employment and economic growth, but have largely not included
objectives on ‘decent work’. She noted that:
“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.”116
112 Record of Proceedings, paragraph 120 to 123 – 20 June 2022 113 Written evidence, EHRC Wales; RMT; the IWA; Colleges Wales; WCVA 114 Written evidence, CECA Wales 115 Record of Proceedings, paragraph 350 to 352 – 27 June 2022 116 Record of Proceedings, paragraph 324 – 11 July 2022
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117. Professor Lydia Hayes and Professor Alan Felstead both called for the creation of a Deputy
Fair Work Commissioner within the Future Generations Commissioner’s office. Professor Hayes
stated that:
”[…]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.”117
118. This call for the creation of a Deputy Commissioner was echoed by NEU Cymru and Wales
TUC.118 Wales TUC argued that this was necessary to ensure the provisions were given sufficient
priority and to advise public bodies on the delivery of the revised well-being goal.119
119. While the Deputy Minister was keen to emphasise the “wider reach” of the fair work
provisions in the Bill as introduced, she acknowledged that competence issues had led to the
change in Welsh Government approach:
“…the Bill as presented respects and reflects the limits of the current
devolution settlement. So, in relation to replicating the fair work duty, the
eagle-eyed amongst you will recall that, in the draft Bill, the definition of ‘fair
work’ was actually left blank and we sought to seek input from consultation
respondees and partners as to actually how we could make that work within
the constraints that we were operating within. But we think actually that our
approach now better reflects our belief that promoting fair work can support
the link between individual and collective well-being, it reflects the important
role that Welsh public bodies have in leading by example, and it also goes
some way, which is important, on the recommendation that was actually
made by the Fair Work Commission to incorporate fair work into the Well-
being of Future Generations Act. So, that goes back again to aligning that
approach, and we think it’s more aligned to the thinking of the standalone
duty that’s already proposed in the Bill.”120
117 Record of Proceedings, paragraph 301 and 302 – 11 July 2022 118 Written evidence, NEU Cymru, Wales TUC 119 Written evidence, Wales TUC 120 Record of Proceedings, paragraph 122 – 20 June 2022
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120. In relation to a Deputy Commissioner for Fair Work, the Deputy Minister outlined the risk
that creating a standalone position “could have the opposite effect to the intention, in terms of
creating a silo approach, when what we are looking to do is to actually integrate fair work across
what we do and the overall approach towards well-being”.121
The Committee’s view
Fair work provisions
We understand the frustration of some at the weakening of the provisions relating to fair work
between the Bill now and the Bill in draft, but the Bill needs to be within the Senedd’s
competence. Furthermore we note that the ultimate approach of requiring all public bodies to
consider fair work when setting out to achieve a well-being goal has a much broader potential
reach than the original provisions. If this broader approach is to succeed, however, the Welsh
Government will need to take action to address the Deputy Future Generations Commissioner’s
findings that only two bodies included references to aspects of fair/decent work in the first
analysis of well-being objectives. This action should include producing guidance to support
public bodies to incorporate fair work into their well-being objectives and include setting out
clear expectations to public bodies of the need to improve the number setting fair work-related
objectives.
Recommendation 10. The Welsh Government should produce guidance to support public
bodies to incorporate fair work into their well-being objectives, and should set out how it
expects this guidance to improve the number of public bodies setting fair work-related well-
being objectives in the future. This work should be completed ahead of the legislation coming
into force.
We heard calls for the creation of a Deputy Commissioner with responsibility for ‘Fair Work’
within the current Future Generations Commissioner’s office. Given the need to ensure that fair
work is prioritised within the well-being goals the Welsh Government should consider whether
the Future Generations Commissioner’s office has sufficient, sustainable funding and resource to
give fair work the priority it needs, as envisaged by the Bill’s proposals.
Recommendation 11. The Welsh Government should consider whether the Future
Generations Commissioner’s Office has sufficient, sustainable funding and resources to give fair
work the priority it needs, as envisaged by the Bill. If gaps in the ability of the Commissioner’s
121 Record of Proceedings, paragraph 135 – 3 October 2022
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Office to do this are identified, the Welsh Government should allocate additional resource to
enable these to be addressed. This work should be completed before Stage 3 proceedings take
place and the Regulatory Impact Assessment should be updated accordingly.
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6. Socially responsible public procurement
Harnessing the power of public sector procurement to deliver
wider social benefits has been a priority for the Welsh
Government for many years. According to the Explanatory
Memorandum, this Bill will enable them to take “greater strides
forward” in this area.
The socially responsible public procurement duty
121. Section 24 sets out an overarching duty on contracting authorities (i.e. those listed in
Schedule 1 to the Bill) which requires them to seek to improve the economic, social,
environmental and cultural well-being of their respective areas by carrying out public
procurement in a socially responsible way.
122. The section introduces a category of public procurement in respect of “prescribed
contracts”, which fall into three categories:
▪ Major construction contracts (defined in section 25);
▪ Outsourcing services contracts (defined in section 26);
▪ Any other public contract described in regulations by the Welsh Ministers.
123. A number of organisations set out their support for this part of the Bill, including CECA
Wales, Colleges Wales, FSB Wales, EHRC Wales, the RMT, NEU Cymru, and the IWA.122
124. Geraint Thomas of South Wales Fire and Rescue Authority highlighted the potential
benefits of the legislation, particularly the procurement duty, in terms of ensuring greater levels
of consistency across the public sector:
“The real benefit for me, in terms of the legislation, is that we can use it, or
certainly the procurement professionals within services can use it, to ensure
that we do it in the proper manner and things are done correctly and within
the legal frameworks, because, with the best will in the world, if you allow
122 Written evidence, CECA Wales, Colleges Wales, Wales TUC, EHRC Wales, RMT, NEU Cymru and IWA
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staff, not just in the fire sector but probably in all the public sector—if they
were given the freedom, they’d just go out and buy what they want through
the least path of resistance. They wouldn’t follow the procurement
procedures. They would just get it the easiest route they could possibly get it,
not necessarily look for the cheapest, but the easiest route to get what they
want. Having this legislation only adds to what we’re already trying to
achieve, and it will give us the right outcomes.”123
125. Community Leisure UK called for a move away from “process-driven procurement to
“purpose-driven” procurement. Kate Cummings described the Bill “going in the right direction”
in its emphasis of the importance of social value.124
126. Tomorrow’s Company stated that issues such as "social value and social responsibility can
never be assessed by numbers alone.” It added that “there is a strong qualitative element” and
emphasised the need for an organisation to have an appropriate culture.125
Globally responsible public procurement
127. A number of organisations called on the Welsh Government to expand the socially
responsible procurement duty to include globally responsible procurement. In a joint
submission, Size of Wales, Cytûn, the Welsh Centre for International Affairs, Fair Trade Wales
and WWF Cymru made a number of recommendations including around the need for the Bill to
consider global responsibility; training for procurement officers on global procurement impacts;
and around carbon emissions targets and measure to address overseas deforestation.126
128. They were “deeply concerned” at the wording of section 24 which they argued runs
contrary to the WFG Act 2015 and that “there is a danger that the definition of well-being as
referring only to “the local area” may come to supersede the much fuller [global] definition”. In
their view, this should be addressed by the amendment of section 24 of the Bill to “cross-refer
to the duties imposed by the WBFGA 2015”.127
129. In relation to global responsibility, the Deputy Minister told us that the legislation links
socially responsible procurement directly to the well-being goals, which include global
123 Record of Proceedings, paragraph 378 – 27 June 2022 124 Record of Proceedings, paragraph 200 – 11 July 2022 125 Written evidence, Tomorrow’s Company 126 Written evidence, Size of Wales, Cytun, WCIA, FairTrade Wales, WWF Cymru 127 Written evidence, Size of Wales, Cytun, WCIA, FairTrade Wales, WWF Cymru
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responsibility and that this link will be clarified in the statutory guidance.128 She reiterated this
point during our second evidence session.129
Coverage of the procurement duty
130. The Wales TUC, other trade unions, EHRC Wales and the Bevan Foundation called for the
list of bodies subject to the socially responsible procurement duty to be expanded.130
131. EHRC Wales argued that further and HEIs should come under the duty, to ensure
consistency between it and the procurement requirements in the Equality Act 2010. They also
drew attention to the Public Sector Equality Duty (PSED) procurement duty noting that neither
the Bill nor the accompanying documentation currently refers to PSED:
“It is important for us as the regulator of the PSED and listed public bodies
who are subject to the PSED, to understand how the socially responsible
public procurement duty and PSED procurement regulation interrelate. We
recommend that this point is explicitly referenced within the explanatory
memorandum to provide clarity.”131
132. The Wales TUC called for the Welsh Government to provide greater clarity on whether
further and HEIs and RSLs could be included within the scope of the duty.132
133. Audit Wales, however asked whether all bodies that will be subject to the socially
responsible procurement duty needed to be included, as many of the additional bodies that are
solely subject to this duty have relatively small procurement spend and may be
disproportionately impacted by the duty.133
134. Universities Wales told us that not including HEIs within the scope of the socially
responsible procurement duty addressed “significant issues” that would have arisen under the
proposals in the draft Bill.134 Their response to the Welsh Government consultation on the draft
Bill described these concerns in detail:
“In relation to universities, some of the proposals may need further
investigation to ensure there are no unintended conflicts with charity status
128 Equality and Social Justice Committee, Correspondence from the Deputy Minister to the Chair regarding Social
Partnership and Public Procurement (Wales) Bill – 22 July 2022 129 Record of Proceedings, paragraph 166 – 3 October 2022 130 Written evidence, Wales TUC, EHRC Wales 131 Written evidence, EHRC Wales 132 Written evidence, Wales TUC 133 Written evidence, Audit Wales 134 Written evidence, Universities Wales
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or charity law obligations. As the Charity Commission makes clear, a charity
must exclusively pursue its charitable purposes, and not the policies or
directions of a governmental authority. Placing a direct requirement on
universities to pursue the Welsh Government’s well-being or fair work
objectives in relation to prescribed contracts as proposed, and the proposed
power of the Ministers to require universities to implement works clauses if
they disagree with a university’s decision not to include them in a major
construction contract, would both appear to cause potential problems for
universities in meeting their charitable obligations or maintaining their
charitable status, and status for purposes of national accounting. Placing a
direct requirement on universities in relation the WBFGA 2015 has previously
been avoided for this reason. As the draft Bill stands, we think these
provisions may need to be redrafted or universities exempted from their direct
application to avoid serious adverse consequences.”135
135. As mentioned in the previous chapter, according to the Deputy Minister the way in which
these institutions are defined made it difficult for them to be covered by the legislation.136
136. An official supporting the Deputy Minister also noted that Higher Education Institutions
have expressed interest in the procurement approach proposed by the Welsh Government:
“In recent meetings with HE colleagues around procurement, they’ve
expressed quite a lot of interest in what we’re doing. They’re actually coming
along to some of the workshops, where we’re thinking about the foundation
of statutory guidance, and really participating, just the same way as any
other public body, with a view to participating using the same guidance and
doing the same things if and when the Bill becomes law. So, just to reassure
this committee that not being listed within the procurement duties doesn’t
mean that the sector is not interested in the issues that are raised. And, in
fact, in some areas, HE in particular I think, has really led the way in the past,
and I believe that they would still want to continue to do so.”137
135 Universities Wales, Response to the Welsh Government consultation - Draft Social Partnership and Public
Procurement (Wales) Bill 136 Record of Proceedings, paragraph 50 – 20 June 2022 137 Record of proceedings, paragraph 115 – 3 October 2022
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Measuring the impact of the duty
137. The procurement duties were of particular interest to business organisations. Richard Selby
of IOD Wales described procurement as “one of the greatest levers we have to make a huge
change in people’s lives”.138
138. Chambers Wales called for the Welsh Government to set targets for themselves and public
bodies to increase the percentage of procurement spent with Welsh businesses over the next
five years and their director identified this as a key indicator for measuring the impact of the
Bill.139
139. FSB Wales supported the duty and argued that ‘think small business’ principles should
guide strategy and implementation. Furthermore, they called for effective guidance for SMEs;
for the Welsh Government to build up the competitiveness of firms so they are in a better
position to bid for contracts; and for greater understanding that businesses are at different
stages of being able to deliver fair work requirements. Chambers Wales also called for guidance
for SMEs and greater protections for small businesses against measures that would
disadvantage them compared to larger firms through an appendix clause to the Bill.140
140. Cwmpas raised the need for the Welsh Government to develop social enterprises so they
can bid for contracts and would welcome targets being set for the percentage of contracts
awarded to social enterprises.141
141. The Open Rights Group’s submission highlighted the potential role of open source
software in socially responsible procurement and expressed disappointment that this is absent
from the Bill.142
142. The Deputy Minister was reluctant to commit to procurement targets citing “difficulties”
relating to the “quality and level of the data”. She did however confirm that work was underway
to address deficiencies in data collection and analysis.143
143. Section 40 of the Bill contains provisions regarding the management, maintenance and
publication of a contracts register by contracting authorities including the information and data
that must be collected. We asked whether these provisions could be amended to include
information regarding the location of contracts and used to measure performance. The Deputy
138 Record of Proceedings, paragraph 111 – 11 July 2022 139 Written evidence; Record of Proceedings, paragraph 163 – 4 July 2022 140 Written evidence, Chambers Wales, FSB Wales 141 Written evidence, Cwmpas 142 Written evidence, Open Rights Group 143 Record of proceedings, paragraph 151 – 3 October 2022
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Minister replied that the reporting measures of the Bill would be “key” and would give the Welsh
Government a “much clearer picture about what is happening and to what extent the duties are
making a difference”.144
Contract management
144. Sections 27 to 31 relate to social public works clauses in major construction contracts. They
include requirements for Welsh Ministers to publish model clauses for major construction
contracts (sections 27 and 28) which are designed to bring about improvements to economic,
social, environmental and cultural well-being. They also place a duty on contracting authorities
to take steps to ensure obligations are being met.
145. The evidence identified contract management as an area where performance could be
improved. Liz Lucas from Caerphilly Council told us that “contract management isn’t something
that’s done well right across Wales”.145
146. CECA Wales indicated its support for the introduction of the construction management
duty, the development of which it had “actively encouraged”. It said that private sector suppliers
have “experienced an almost complete non-existence of post-contract scrutiny of socially
responsible outcomes”, and that without these provisions, suppliers would be less likely to
deliver desired outcomes. They argue that public bodies need to work with the private and third
sectors to deliver better outcomes, and suggest that public bodies should publish 12-month
forward work programmes to enable suppliers to plan for business opportunities, plan to deliver
socially responsible outcomes and establish proposals for longer-term sustainable delivery of
these outcomes.146
147. FSB Wales said that obligations made by larger suppliers are often met by passing
pressure further down supply chains to subcontractors, and that this risk should warrant further
consideration when proposals are being developed. It believes that duties and desired
outcomes should not be lost as you go down the supply chain, and that what is asked of
subcontractors should be proportionate, promote progression and not adversely impact on
opportunities for SMEs.147
148. Procurement expert Liz Lucas also raised the poor treatment of SMEs and subcontractors,
highlighting the way in which risk is sometimes passed down the supply chain:
144 Record of Proceedings, paragraph 130 - 133 – 20 June 2022 145 Record of Proceedings, paragraph 74 – 11 July 2022 146 Written evidence, CECA Wales 147 Written evidence, FSB Wales
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“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.”148
149. Ed Evans of CECA Wales said in response that the answer lies in changing the culture and
practices by bringing the poor performers up to the standards of the best:
“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.”149
Additional duties
150. Sue Hill of Betsi Cadwaladr UHB said that Ministers should allow time to measure
implementation of the Bill before considering using its powers under section 24(8) to create
additional contract management duties.150
151. The Deputy Minister outlined the approach to the inclusion of any additional duties:
“We included contract management duties for major construction projects
because construction accounts for around a third of the overall procurement
spend by public bodies in Wales, and because we know it has complex supply
chains where there is significant risk and potential opportunity around
delivering socially responsible outcomes. We will learn from the contract
management duty, but we do not currently have any plans to extend it into
other specific sectors.”151
148 Record of Proceedings, paragraph 51 – 11 July 2022 149 Record of Proceedings, paragraph 59 – 11 July 2022 150 Record of Proceedings, paragraph 277 – 27 June 2022 151 Equality and Social Justice Committee, Correspondence from the Deputy Minister to the Chair regarding Social
Partnership and Public Procurement (Wales) Bill – 22 July 2022
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Procurement strategies
152. Section 38 requires contracting authorities to prepare and publish a procurement strategy.
Amnesty International welcomed the provisions however, they were disappointed that this did
not include reference to the role of procurement in supporting human rights.152
153. The Chartered Institute of Building (CIOB) said the strategies could be a “key driver of
social benefits” if they are “broken down into smaller, more manageable, affordable packages”
as this will remove barriers to SMEs.153
154. Cwmpas told us that they would welcome the opportunity to work with public bodies on
their procurement strategies and called for a specific target to be set for the percentage of
social enterprises winning these contracts.154
Outsourcing
155. Sections 32 to 37 relate to the social public workforces clauses and the code of practice on
outsourcing public services including notification and reporting arrangements.
156. Chwarae Teg told us that proposed public services outsourcing and workforce code
“offers an opportunity to put in place requirements around standard terms and conditions of
employment to better protect social care workers, and ensure that companies offering fair work
are not being undercut by larger, private sector companies”.155
157. The WLC called on the Welsh Government to include provisions regarding “the right to
use Welsh in the workplace and all duties arising from Operating Standards” in the public
services outsourcing and workforce code.156
The Committee’s view
Socially responsible public procurement
We note that much of the evidence received was supportive of the socially responsible public
procurement duty with its emphasis on a wider set of values. The duty builds on many years of
152 Written evidence, Amnesty International 153 Written evidence, CIOB 154 Written evidence, Cwmpas 155 Written evidence, Chwarae Teg 156 Written evidence, Welsh Language Commissioner
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policy and activity designed to harness public procurement spending to deliver wider social
benefits.
The evidence was not wholly supportive, however, and there were important concerns relating
to an inconsistency in the wording of the Bill and the wording of the Well-being of Future
Generations Act 2015. Whereas the 2015 Act refers to the “limits of the global environment”,
there were concerns section 24 (1) of the Bill refers only to the need “to improve the economic,
social, environmental and cultural well-being of its area,”. The Deputy Minister sought to give
reassurance on this issue telling us that the duty is clearly linked to the well-being goals which
include global responsibility, and that this will be made clear in statutory guidance. Given the
number of organisations working in the sector who expressed concerns on this matter, we
would like the Welsh Government to go further and consider bringing forward amendments to
section 24 (1) of the Bill so that it sufficiently considers the global responsibilities that public
bodies have as well as those to their local area.
Recommendation 12. The Welsh Government should bring forward amendments to section
24(1) of the Bill so that it sufficiently considers the global responsibilities that public bodies have
as well as those to their local area.
Coverage of the duty
As with other duties contained in the Bill, we heard calls to expand the socially responsible
public procurement duty to cover other public bodies such as Registered Social Landlords, FEIs
and HEIs (although Audit Wales specifically queried whether the coverage should be curtailed in
this case). We note that the coverage of this duty is wider than that proposed for the social
partnership duty, and that while the issues raised above are relevant to the accounting status of
these bodies, there would be no need to amend the WFG Act 2015 as any changes can be
made by amending Schedule 1 to the Bill.
We also understand the concerns expressed by Universities Wales in their draft Bill consultation
response, and clearly would not want to see any negative impacts to organisations’ charitable
status or their status as not-for-profit institutions serving households. However, we note that the
Welsh Government has not spoken to the Office for National Statistics to understand whether
including these bodies as contracting authorities under Schedule 1 would impact on their
accounting status. Given that similar reasons were given for excluding Higher Education
Institutions from the scope of the WFG Act 2015, the Welsh Government needs to prioritise
holding discussions with the Office for National Statistics on this matter so that these bodies,
and the Senedd, have clarity on which bodies can be subject to this legislation.
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In principle, we believe that bodies such as FEIs, HEIs and RSLs that are in receipt of
considerable amounts of public funding should be required to follow Welsh Government
procurement legislation in the same way as public sector contracting authorities. However, if
there are significant practical difficulties which prevent this, we would not want to see these
bodies negatively impacted.
We are mindful that FEIs and HEIs are subject to the procurement duty under the Public Sector
Equality Duties, and believe that there is an opportunity for consistency in also including these
organisations as contracting authorities in Schedule 1 to the Bill.
Therefore, given the views expressed by stakeholders that Registered Social Landlords, FEIs and
HEIs should be subject to the socially responsible procurement duty, we would like the Welsh
Government to discuss the potential impacts of this on their accounting and charitable status
the Office for National Statistics and Charity Commission respectively, with a view to including
them within the scope of the Bill.
The new duty will sit alongside other duties, notably the Public Sector Equality Duties
procurement regulation. However, the evidence we received from the EHRC as the regulator
suggests that they are unclear as to how these duties will align. The Welsh Government should
clarify this so that the regulator and public bodies subject to both duties understand how the
duties will work together.
Recommendation 13. The Welsh Government should hold discussions with the Office for
National Statistics and the Charity Commission to determine whether making Further Education
Institutions, Higher Education Institutions and Registered Social Landlords subject to the socially
responsible public procurement duty would negatively impact on their national accounting
status and/or charitable status. Should there be no impact on these, it should add these bodies
to the list of contracting authorities subject to this duty.
Recommendation 14. The Welsh Government should set out how it proposes that the Public
Sector Equality Duties procurement regulation and the socially responsible procurement duty
align, and how it intends to ensure that public bodies subject to both duties understand how the
duties will work together.
Impact of the duty
To ensure that the aims of the socially responsible procurement duty are realised, some
suggested that the Bill should include measures and targets on the proportion of public
procurement either spent in Wales or spent with specific types of suppliers such as SMEs or
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social enterprises. The Deputy Minister, however, cited difficulties with data collection and
analysis that would make it challenging to agree “meaningful” targets in the short term,
although we are pleased to note that work is underway to address this in the medium term.
We agree that the Bill should be amended to place a requirement on Welsh Ministers to set
procurement targets within one year of implementation of the Act. This approach would allow
time for the detailed work on data-gathering and monitoring to take place before targets are
set. The Welsh Government should also consider whether any amendments need to be made to
the registrable information that contracting authorities are required to keep under section 40(3)
of the Bill to facilitate the data-gathering and monitoring needed to set these targets.
Recommendation 15. The Welsh Government should bring forward amendments at Stage 2
which place a requirement on Welsh Ministers to set targets for the proportion of procurement
spent in Wales and spent with specific types of suppliers such as SMEs or social enterprises.
While time will be needed for the precise mechanics of data-gathering and monitoring to be
worked out, these should be set within one year of implementation of the Act and no later than
three years after its coming into force.
Recommendation 16. The Welsh Government should bring forward amendments at Stage 2
to amend section 40(3) of the Bill to require contracting authorities to include the address of the
contractor on the register for each contract and any other information required to facilitate
data-gathering and monitoring needed for the setting of procurement targets.
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7. Implementation of the procurement aspects
In order to realise the Bill’s ambitions for socially responsible
procurement, the Welsh Government will have to work with
public bodies, industry and others to build capacity, capability
and cultural change.
158. Some of the evidence highlighted the financial and resource challenges associated with
implementation of the procurement aspects of the Bill. For example, Jon Rae from the WLGA
raised these issues:
“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.”157
159. Shân Morris from the North Wales Fire and Rescue Service stated that many public bodies
face difficulties in recruiting procurement staff, and described procurement managers as being
“like hen’s teeth”, which can lead to inconsistency across public bodies such as fire and rescue
services.158
160. Liz Lucas of Caerphilly Council told us that it was unnecessary for all 22 local authorities to
have expertise in every category of spend and that they would need to work together:
“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.”159
161. Additional support from the Welsh Government to raise the performance of the worst-
performing between now and implementation of the Bill was seen as key with both Ed Evans
157 Record of Proceedings, paragraph 336 – 11 July 2022 158 Record of Proceedings, paragraph 376 – 27 June 2022 159 Record of Proceedings, paragraphs 41 and 42 – 11 July 2022
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and Liz Lucas highlighting differences in the levels of performance and expertise among Wales’
local authorities and the need for a cultural shift.160
162. Denbighshire County Council said that public bodies, local authorities and the Welsh
Government will need to “support and mobilise local supply chains” to ensure they are well
positioned to fulfil the requirements of the Bill, once on statute. According to Denbighshire this
would require “a coordinated and targeted effort by all local authorities and public bodies,
alongside Welsh Government. Local supply chains, especially smaller businesses, will require
some form of capacity building to fully understand social value, particularly within tenders where
the social value response will need to be evaluated”.161
163. The CIOB highlighted existing mechanisms (in the form of toolkits) used their industry to
better understand what social value means in both public and private sector projects. They
called on the Welsh Government to “look at existing industry-led mechanisms in place to further
strengthen the intentions of the Bill and see the outcomes set out in the procurement process
achieved”.162
164. Similarly, the British Standards Institute (BSI) submission outlined how the Welsh
Government could use standards to support the Bill’s aims and gave practical examples of the
way in which “significant headway” had been achieved on “the use of standards in improving
the efficiency of public procurement”. They outlined the role of the Public Procurement
Standard which provides:
“criteria and guidance that enable potential suppliers to demonstrate their
generic trustworthiness, transparency, and ethical practice. At the same time,
procuring bodies can use the standard to assess bidders more readily and
accurately.”163
165. In relation to staff resourcing, the Deputy Minister told us:
“We will minimise difficulties and maximise positive outcomes if we ensure
that the duties can be applied proportionately, which will be supported
through the guidance, that we engage with stakeholders during the
160 Record of Proceedings, paragraphs 91, 100, 103 – 11 July 2022; paragraphs 108 - 113 – 11 July 2022 161 Written evidence, Denbighshire County Council 162 Written evidence, Chartered Institute of Building 163 Written evidence, British Standards Institute; see also BS 95009:2019 Procurement to the public sector – generic
requirements for organizations providing products and services
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development of the guidance, and that we put sufficient resources in place
within Welsh Government to support implementation.”164
Procurement Centre of Excellence
166. Separately from the Bill’s provisions and in addition to the creation of the procurement
sub-group of the SPC, as set out in sections 9 and 10 of the Bill, the Welsh Government intends
to create a Procurement Centre of Excellence. The Welsh Government’s decision follows
recommendations by the Future Generations Commissioner and a panel of experts on the role a
Centre of Excellence could play in developing the foundational economy in Wales.165
167. Liz Lucas from Caerphilly Council raised the importance of the proposed Procurement
Centre of Excellence in helping to deliver the socially responsible procurement and contract
management duties.
168. The DFG Commissioner told us that she was unclear on how the Centre of Excellence and
procurement sub-group (of the SPC) will work together, stating that the Commissioner had
advised the Welsh Government not to establish a procurement sub-group, but to instead work
directly with the Centre of Excellence.166
169. A Welsh Government official explained how the envisaged Centre of Excellence and the
procurement sub-group of the SPC would work together:
“there are two very different roles. If we’re talking about the procurement
sub-group, it’s about accountability, it’s about challenge, it’s about looking at
the outcomes. The centre of excellence’s main purpose is in support;
providing the tools, techniques, advice and support to the public sector. So,
they’re two quite different roles. Clearly, it would help if they worked well
together, and that would be the plan.”167
Reporting arrangements, investigations and compliance
170. Section 39 to 42 deal with reporting arrangements (as they relate to the procurement
aspects of the Bill).
164 Equality and Social Justice Committee, Correspondence from the Deputy Minister to the Chair regarding Social
Partnership and Public Procurement (Wales) Bill – 22 July 2022 165 Future Generations Commissioner, What the Procurement Review means for Public Bodies and Welsh
Government 166 Record of Proceedings, paragraph 345 – 11 July 2022 167 Record of proceedings, paragraph 175 – 3 October 2022
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171. NEU Cymru welcomed the reporting duties, but believed there should be more redress
built into the public procurement aims within the Bill, stating that “it seems that sanctions for
non-compliance are unclear, and should be very transparent, and incentivise compliance”.168
172. Ed Evans from CECA Wales said that one of the benefits of the transparency generated by
the reporting requirements could be that it raises the standard of public bodies’ procurement as
it becomes clearer which authorities are performing well, and which are performing less well. Liz
Lucas from Caerphilly Council supported this, noting that it would raise the profile of
procurement and “brings about challenge before we’re needing to get into any other serious
challenges from other bodies”.169
173. Audit Wales, on the other hand, expressed concerns arguing that the requirement to
summarise the procurement a public body expects to carry out over the next two years to be
“onerous”, and with unclear benefits. They also said that the wording used in relation to
timescales for producing reports was unclear, and “could lead to a lack of focus”.170
174. Colleges Wales argued that reporting duties should use the least onerous approach
possible, and should be subject to annual feedback and reviews for the first three years after
introduction to ensure they are fit for purpose and achieve the intended aims.171
175. The WLGA expressed “some concern about the burden of reporting for local authorities
and the resource implications in meeting these demands”. They also noted that the exception
reporting required when model clauses relating to construction or outsourcing duties are not
used may cause delays to annual reports.172
176. The Deputy Minister argued that the transparency generated by regular reporting is a key
aspect of this part of the legislation and would give the Government “the leverage to really
make a difference in terms of those outcomes from the legislation that we would all collectively
want to see, whether that’s around fair work or supporting SMEs in local communities”.173
168 Written evidence, NEU Cymru 169 Record of Proceedings, paragraphs 117 and 119 – 11 July 2022 170 Written evidence, Audit Wales 171 Written evidence, Colleges Wales 172 Written evidence, WLGA 173 Record of Proceedings, paragraph 12 – 20 June 2022
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Powers to investigate
177. Section 41 gives the Welsh Ministers the power to investigate how a contracting authority
carries out public procurement. Such an investigation can be carried out in relation to a
particular procurement or procurement activities more generally.
178. Audit Wales and the Wales TUC raised the lack of clarity regarding the triggering of a
procurement investigation by the Welsh Government under section 41. Audit Wales called on
the Welsh Government to establish set criteria for this, stating that the Bill should be amended
so that “any such investigations should only be undertaken following consultation with the
Auditor General”.174 The Wales TUC also called for greater clarity and in particular asked whether
a report from the SPC or a trade union could trigger an investigation into a public body.175
179. The DFG Commissioner told us that it was unclear how the powers given to Welsh
Ministers to undertake procurement investigations would interact with the powers that the
Future Generations Commissioner has under section 20 of the WFG Act 2015. She asked why
“[do] we need an extra layer and a new system and not integrate this in existing mechanisms”.
Marie Brousseau-Navarro also noted that the narrower scope of the powers and questioned the
coherence of the Welsh Government’s approach:
“that brings us back to the question of coherence and how this legislation
should be more integrated under the Well-being Act, and use existing
mechanisms rather than creating new ones, more narrow and more focused,
which might go in a different direction from the overarching Well-being
Act.“176
180. Liz Lucas, Head of Procurement for Caerphilly County Borough Council urged Ministers to
exercise caution when using the powers contained under section 41 of the Bill:
“This element [of the Bill] 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.”177
174 Written evidence, Audit Wales 175 Written evidence, Wales TUC 176 Record of Proceedings, paragraph 394 – 11 July 2022 177 Record of Proceedings, paragraph 85 – 11 July 2022
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181. Responding to the DFG Commissioner’s concerns regarding the interaction between the
powers in the Bill and the Future Generations Commissioner’s existing powers, the Deputy
Minister said:
”The Future Generations Commissioner has review powers rather than
investigatory powers, and no powers that are specific to procurement. So, the
current commissioner used her review powers to look at procurement, given
that it’s a function of public bodies captured by the Well-being of Future
Generations Act. So, there’s no duplication of that function between this Bill
and the Well-being of Future Generations Act. A review of procurement was
carried out because of the Future Generations Commissioner’s view that
there are inconsistencies in the way that well-being outcomes are being
pursued through procurement and reported by organisations. This Bill
doesn’t result in any changes to the Future Generations Commissioner’s role
or powers, but it does mean that there will be, as we’ve discussed previously,
additional oversight of the achievement of the well-being goals through
procurement, which will be provided by the Social Partnership Council and
also by the procurement sub-group as well.”178
Guidance
182. Section 43 of the Bill provides that Welsh Ministers may issue guidance on the operation
of Part 3 of the Bill, and the topics the guidance may cover.
183. We received some evidence calling for clarification of specific terms in the guidance. EHRC
Wales and Audit Wales, for example, called for the guidance to clarify what is meant by
“decisions of a strategic nature” and others such as Amnesty International and Professor Alan
Felstead said that the guidance should define concepts such as global responsibility and fair
work.179
184. The WLC called for the procurement guidance and documentation to be produced
bilingually as this would have benefits in terms of upskilling Welsh speakers and would
“contribute to development of a more consistent, standardised procurement infrastructure that
delivers improved public procurement practices”.180
178 Record of Proceedings, paragraph 190 – 3 October 2022 179 Written evidence, Professor Alan Felstead; Amnesty International 180 Written evidence, Welsh Language Commissioner
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185. Digital Health and Care Wales called for the Welsh Government to produce “practical
guidance to support contracting authorities in their decision making around social
responsibility”.181
186. Community Housing Cymru called for RSLs to be included in any consultation on
regulations and guidance developed.182
187. In terms of arrangements for setting guidance, Audit Wales emphasised the role of “good
guidance in the success or failure of the legislation.” They said it would:
“[…]probably be beneficial in terms of responsible law-making for the Welsh
Government to publish draft guidance, together with independent
assessments of its likely effectiveness, for consultation and the Senedd’s
consideration. And it would be best if this were done before the Bill passes.”183
188. The Explanatory Memorandum states that the issuing of guidance under the Act (if it
becomes law) will provide an opportunity to consolidate, simplify and address areas of overlap
in existing guidance.184 The Deputy Minister described the guidance as “an ideal opportunity to
include practical details as well, case studies, and examples of how to achieve well-being
through procurement” and suggested that it could be regularly updated.185 An official for the
Welsh Government also confirmed that consultation and engagement on the development of
guidance was underway.186
The Committee’s view
Implementation of the Bill’s vision for procurement
Underpinning the procurement aspects of this Bill is a vision of procurement which values a
much broader set of values than simply that of lowest cost. Clearly, the realisation of this vision
will rely in no small measure on effective implementation at all stages of the procurement
process. But there are challenges that could impede implementation including inconsistent
contract management, cultural resistance, and a lack of capacity and resources, all of which will
need to be addressed.
181 Written evidence, DHCW 182 Written evidence, CHC 183 Written evidence, Audit Wales 184 Page 28, Draft Explanatory Memorandum 185 Record of proceedings, paragraph 177 – 3 October 2022 186 Record of proceedings, paragraph 180 – 3 October 2022
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Day-to-day it will be the responsibility of procurement practitioners working across the public
sector to deliver the Bill but we heard that they are stretched and sometimes lack the expertise
needed. It was suggested that these challenges could be addressed to an extent by the role that
greater transparency and accountability will have in driving up standards of performance, and
the Bill’s provisions should help in that regard.
We would like to see a stronger lead from the Welsh Government on the issue of capacity,
capability and collaboration. The Welsh Government must prioritise building up the capacity
and capability of the public sector procurement workforce to implement the new procurement
duties and should provide the training necessary to do this. It should also clarify the roles that
collaboration between public bodies, the proposed Procurement Centre of Excellence, and the
SPC’s procurement sub-group can play in driving this agenda forward.
Recommendation 17. The Welsh Government must prioritise ensuring that the procurement
workforce has the capacity and capability to implement the new procurement and contract
management duties of the Bill and provide the training necessary to do so. This training should
be in place before the coming into force of the legislation and the RIA updated to reflect the
estimated costs.
Recommendation 18. The Welsh Government should take steps to ensure that public bodies
are able to collaborate effectively to build capacity, capability, and expertise by setting out in its
response to this report:
▪ a clarification of the roles and relationship between the Procurement Centre of
Excellence and the SPC’s procurement sub-group;
▪ how it intends to ensure that the Procurement Centre of Excellence and SPC’s
procurement sub-group will play a role in driving the collaboration agenda forward.
Working with industry
In addition to working with public bodies, there will be a role for the Welsh Government working
with businesses and suppliers particularly in the construction industry. We note that some good
practice already exists but that risks remain whereby socially responsible procurement
obligations are pushed down the supply chain to subcontractors. It is not clear how the Bill will
address these issues and some of the evidence suggested that the issue could only be tackled
through cultural (rather than legal) change. We would therefore like to see the Welsh
Government work with industry bodies and representatives involved in construction
procurement to develop robust guidance on how socially responsible procurement obligations
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and risk should be shared through the whole of the supply chain, to address cultural and
behavioural issues.
Recommendation 19. The Welsh Government should work with industry bodies and
representatives involved in construction procurement to develop robust guidance on how
socially responsible procurement obligations and risk should be shared through the whole of
the supply chain and also seek to address related cultural and behavioural issues.
Reporting and compliance
Overly onerous reporting requirements could impact on the same “stretched” resources
responsible for implementing the Bill which could further impede delivery. The Bill creates a
number of new reporting requirements. We are not convinced that these, taken together, strike
the right balance between the need to increase transparency; keep the administrative burden
placed on public bodies to a minimum and avoid duplication of reporting requirements from
other duties. The Welsh Government should set out how it intends to address these concerns.
Recommendation 20. The Welsh Government should set out how it will ensure that
reporting requirements in the Bill are streamlined to ensure an appropriate balance between the
need to increase transparency; keep the administrative burden placed on public bodies to a
minimum; and avoid duplication of reporting requirements from other duties.
Powers to investigate
While the Bill’s powers to investigate procurement activities are a necessary aspect of
compliance, we share concerns that greater clarity is needed around both the criteria for
exercising these powers and how they relate with existing powers given to the Auditor General,
the Future Generations Commissioner and others. We further note the Deputy Future
Generations Commissioner’s comments that the powers to investigate in this Bill not only risk
duplication but are narrower in their potential scope.
Recommendation 21. The Welsh Government should set out how Welsh Government
procurement investigations will interact with existing powers held by the Future Generations
Commissioner, and how its approach as envisaged in the legislation will add value and avoid
duplication.
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Recommendation 22. The Welsh Government should set out the criteria that would trigger
an investigation under section 41 of the Bill and its position on the need to consult the Auditor
General for Wales before the commencement of such an investigation.
Recommendation 23. The Welsh Government should bring forward amendments at Stage 2
detailing the criteria that would trigger an investigation under section 41 on the face of the Bill.
Guidance
Previous experiences show that clear guidance can play a pivotal role in implementation and we
have alluded to areas where we would welcome specific issues reflected in guidance throughout
this report. Engagement with all interested parties, alongside opportunities to scrutinise and
challenge the guidance in draft form will strengthen the quality of the guidance, and as a result,
strengthen implementation of the Bill. We would therefore welcome assurances from the Welsh
Government that the statutory guidance will be published in draft form, for consideration by
stakeholders and the Senedd, for a minimum of six sitting weeks (excluding weeks when the
Senedd is in Recess).
Recommendation 24. The Welsh Government should make a commitment to publish the
statutory guidance in draft form for consideration by stakeholders and the Senedd with a
minimum consultation period of six sitting weeks.
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8. Financial implications and other considerations
Financial implications for public bodies
189. Denbighshire County Council and Natural Resources Wales (NRW) highlighted additional
costs facing public bodies. Denbighshire County Council questioned whether any financial
support will be available to public bodies to support the implementation of the legislation. NRW
asked whether the SPC will be directing public bodies to implement new initiatives, and stated
that if so they argued that public bodies would need additional funding allocations.187
Regulatory Impact Assessment
190. Audit Wales raised a number of issues relating to the Bill’s Regulatory Impact Assessment
(RIA):
▪ The Welsh Government is currently consulting on whether to include an additional
eight public bodies within the well-being duty of the Well-being of Future
Generations Act 2015. If this goes ahead, these bodies will also be subject to the
social partnership and socially responsible procurement duties in this Bill.
Consequently, costs to public bodies will also increase.
▪ The additional public bodies subject to the Well-being of Future Generations Act are
“reasonably likely” to generate additional costs for the Future Generations
Commissioner’s office.
▪ Costs included in the RIA do not include those that would be incurred by the four
Corporate Joint Committees.188
191. DFG Commissioner, Marie Brousseau-Navarro highlighted the experience of implementing
the WFG Act and how costs are often underestimated:
“[…] based on our experience, 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
187 Written evidence, Denbighshire County Council, Natural Resources Wales 188 Written evidence, Audit Wales
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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.”189
Facility time
192. Trade unions have raised issues around additional facility time required to fulfil obligations
in relation to the social partnership duty. The Wales TUC and NEU Cymru both stated that
“under no circumstances can unions be expected to use existing facility time to engage in this
work (unless this is agreed at a local level)”.190 The Wales TUC also commented that the
implementation of the duty will require additional resource for social partners to implement it.
However, the level of resource is currently unknown as social partners have insufficient
knowledge of what effective engagement would be required to make the duty work.191
193. Bethan Thomas of Unison argued that more facility time would be beneficial for
employees and employers:
“We will need to see an increase in facility time for us to fully engage and co-
operate in terms of implementing the legislation. What I would say about
that is that I think that you can’t underestimate the value of that facility time
in terms of it will be a short, initial burst of facility time and resource that will
be needed, but the longer term benefits and impact of co-creation of ideas
and solutions to challenges can’t be underestimated.[…] The engagement of
trade unions in these matters has been well recognised as being beneficial to
workforces, to workplaces, to employers and culturally, and there’s evidence
in TUC papers that can seek to put a value on the positive engagement of
trade unions with their employers.”192
194. Tom Hoyles of GMB and Mary Williams of Unite the Union agreed that more facility time
would be needed to deal with the additional workload created by the legislation.193
195. The Deputy Minister said that at present the Welsh Government did not possess a “full
picture ”of trade union facility time across the public sector “largely because arrangements are
189 Record of Proceedings, paragraph 334 – 11 July 2022 190 Written evidence, Wales TUC, NEU Cymru 191 Written evidence, Wales TUC 192 Record of Proceedings, paragraph 203 – 4 July 2022 193 Record of Proceedings, paragraphs 307 and 308 – 4 July 2022
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made locally within each public body”. An official confirmed work was currently underway to
review this and “establish a baseline for what facility time currently exists across the public
service in Wales”. It was anticipated that this work would be completed by Christmas 2022 and
the Deputy Minister agreed to keep us updated on outcomes.194
Post-implementation evaluation
196. Evidence from the IWA and Audit Wales emphasised post-legislative scrutiny and the need
for evaluation of the implementation of the Bill if it becomes law.195
197. Both the Explanatory Memorandum and the Deputy Minister in her appearances before us
outlined the intention to undertake post-implementation evaluation.196 The Deputy Minister also
emphasised the importance of transparency in this process stating that “most of the information
and advice produced by the Social Partnership Council for Welsh Ministers will also be
published”.197
The Committee’s view
Financial implications and the RIA
We note the concerns relating to the financial implications and potential costs to public bodies
arising as a consequence of the Bill. There is clearly a need to better reflect these in the
Regulatory Impact Assessment, particularly if additional public bodies come under the scope of
the legislation. We therefore expect the Welsh Government to liaise with public bodies in
response to these concerns and bring forward a revised RIA at the end of Stage 2 to reflect any
changes required.
Recommendation 25. The Welsh Government should liaise with public bodies in response to
concerns that the RIA underestimates the potential costs arising as a consequence of the Bill
and bring forward a revised RIA at the end of Stage 2 to reflect any changes required.
Facility time
The need for additional facility time as a result of the Bill has been raised by several trade union
representatives during the development of this legislation. For us to effectively scrutinise the
194 Record of proceedings, paragraphs 53 to 58 – 3 October 2022 195 Written evidence, the IWA; Audit Wales 196 Explanatory Memorandum; Record of Proceedings, paragraphs 55 and 56 – 20 June 2022 197 Record of Proceedings, paragraph 55 – 20 June 2022
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proposals, and for public bodies and trade unions to understand the potential costs and
benefits, the Welsh Government should provide more detail on this issue.
Recommendation 26. The Welsh Government should work with employers and the trade
union movement to understand whether extra facility time will be needed for trade unions to
fulfil their obligations relating to the Bill and provide this detail via an updated Regulatory
Impact Assessment by the end of stage 2 to reflect the potential costs and benefits of this
additional facility time.
Post-implementation evaluation
We welcome the commitment, at the outset of the legislative process, to post-implementation
evaluation, should the Bill become law. We note the commitment of the Deputy Minister to
transparency and would like to see this reflected more broadly, to aid the process of scrutiny
and evaluation. Furthermore, we note that following the ending of the Shadow Social
Partnership Council in July 2022, the Deputy Minister plans to establish a Social Partnership
‘Forum’ to prepare the ground for the arrangements envisaged in this Bill. We would welcome
publication of the work of the Shadow Social Partnership Council in line with what is being
proposed for the SPC and to inform the work of the Forum. This should include publication of
agenda, minutes, and outputs for the Shadow Council and any evaluation or lesson learning
exercise undertaken of its work.
Recommendation 27. The Welsh Government should publish the agenda, minutes and
outputs for the Shadow Social Partnership Council. To enable transparency these documents
should be published before the end of 2022.
Recommendation 28. The Welsh Government should publish any work undertaken to
evaluate and learn the lessons of the work of the Shadow Social Partnership Council at the
earliest opportunity and no later than July 2023.
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Annex A: List of oral evidence sessions
The following witnesses provided oral evidence to the
committee on the dates noted below. Transcripts of all oral
evidence sessions can be viewed on the Committee’s
website.
Date Name and Organisation
20 June 2022 Hannah Blythyn, Deputy Minister for Social Partnership
Welsh Government
Neil Surman, Deputy Director - Social Partnership
Welsh Government
Sue Hurrell, Head of Fair Work Procurement
Welsh Government
Neil Buffin, Deputy Director - Legal Services
Welsh Government
27 June 2022 Richard Tompkins
NHS Employers
Sue Hill
Betsi Cadwaladr University Health Board
Geraint Thomas, Temporary Assistant Chief Officer
South Wales Fire and Rescue Service
Helen Rees, Head of Procurement
Mid and West Wales Fire & Rescue Service
Shân Morris, Assistant Chief Officer
North Wales Fire and Rescue Service
4 July 2022 Leighton Jenkins
CBI Wales
Ben Cottam
Federation of Small Businesses Wales
Paul Slevin
Chambers Wales
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Date Name and Organisation
Richard Selby
Institute of Directors Wales
Nisreen Mansour
Trades Union Congress Wales
Bethan Thomas
UNISON
Darren Williams
Professional and Commercial Services Union
Professor Phil Banfield
British Medical Association
Mary Williams
Unite
Kelly Andrews
GMB
Dr Victoria Winckler
Bevan Foundation
11 July 2022 Ed Evans
CECA Wales
Liz Lucas
Caerphilly Council
Ruth Marks
Wales Council for Voluntary Action
Kirsty Cumming
Community Leisure UK
Professor Alan Felstead
Cardiff University
Professor Edmund Heery
Cardiff University
Professor Lydia Hayes
University of Kent
Karen Higgins
Welsh Local Government Association
Jon Rae
Welsh Local Government Association
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Date Name and Organisation
Marie Brousseau-Navarro
Future Generations Commissioner’s Office
Alice Horn
Future Generations Commissioner’s Office
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Annex B: List of written evidence
The following people and organisations provided written
evidence to the Committee. All Consultation responses and
additional written information can be viewed on the
Committee’s website.
Reference Organisation
SPPP Bill 01 Civil Engineering Contractors Association
SPPP Bill 02 Professor Alan Felstead, Cardiff University
SPPP Bill 03 Colleges Wales
SPPP Bill 04 Federation of Small Business Wales
SPPP Bill 05 Denbighshire County Council
SPPP Bill 06 Community Housing Cymru
SPPP Bill 07 Equality and Human Rights Commission Wales
SPPP Bill 08 Chartered Institute of Building
SPPP Bill 09 British Standards Institution
SPPP Bill 10 Wrexham Council
SPPP Bill 11 Amnesty International Wales
SPPP Bill 12 Size of Wales, Cytun, Welsh Centre for International Affairs, Fair Trade Wales,
WWF Cymru
SPPP Bill 13 Wales Council for Voluntary Action
SPPP Bill 14 Chwarae Teg
SPPP Bill 15 Rail, Maritime and Transport Workers Union
SPPP Bill 16 Natural Resources Wales
SPPP Bill 17 Universities Wales
SPPP Bill 18 Royal Collage of Nursing Wales
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Reference Organisation
SPPP Bill 19 Cwmpas
SPPP Bill 20 Chambers Wales
SPPP Bill 21 National Education Union Cymru
SPPP Bill 22 TUC Wales
SPPP Bill 23 Institute of Welsh Affairs
SPPP Bill 24 Open Rights Group
SPPP Bill 25 Fair Trade Wales
SPPP Bill 26 Digital Health and Care Wales
SPPP Bill 27 Tomorrow’s Company
SPPP Bill 28 Welsh Language Commissioner
SPPP Bill 29 Audit Wales
SPPP Bill 30 Digital Health and Care Wales (no. 2)
SPPP Bill 31 Welsh Local Government Association
- Health Service Procurement (Wales) Bill - response
- Agriculture (Wales) Bill - Printing changes to the Bill as amended at Stage 3
- Health Service Procurement (Wales) Bill - Welsh Government: Purpose and effect table – 24 May 2023
- Health Service Procurement (Wales) Bill - Notice of Amendments – 24 May 2023
- Food (Wales) Bill - response