Zero-hours work may cost firms government deals

Zero-hours contracts see staff unsure of whether they have work from week-to-week. Picture: TSPL
Zero-hours contracts see staff unsure of whether they have work from week-to-week. Picture: TSPL
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SCOTTISH public sector bosses could be allowed to consider the inappropriateness of awarding contracts to companies which use controversial zero-hours contracts.

New legislation is being brought that aims to reform the way the public sector buys in goods and services.

Unions and others have criticised the use of zero-hours contracts, under which people do not know if they have work from one week to the next.

Guidance being brought in as part of the Procurement Reform Bill could allow for the approach a company takes to workforce matters, such as whether they use such contracts, to be taken into consideration when assessing if they should be awarded a contract.

Similarly, public sector bosses could also consider whether firms use blacklisting or pay their staff the living wage, which is higher than the national minimum wage, when deciding who to award a contract to.

The Bill, put forward by the Scottish Government, also aims to make it easier for smaller companies and the voluntary sector to win work from the public sector.

‘Business friendly and socially responsible’

Deputy First Minister Nicola Sturgeon said the legislation promotes an approach that is “both business friendly and socially responsible”.

Scotland already has one of the best records in Europe for small to medium-sized enterprises (SMEs) winning work from the public sector but Sturgeon said the Bill would build on that by making the process of bidding for public sector contracts more transparent and accessible.

The legislation could also lead to greater use of community benefit clauses which could see companies required to provide training, apprenticeships or opportunities for disabled people as part of the contract.

“Changes to public procurement rules will ensure Scotland retains its place as a world leader in public procurement reform, promoting an approach that is both business friendly and socially responsible,” Ms Sturgeon said.

“This Bill will provide a national legislative framework for sustainable public procurement, ensuring that we maximise the economic benefit brought to Scotland from effective and efficient public procurement spend.

“This Bill will also make it easier for the public sector to buy goods and services, helping to boost our economy and get people into work.

“Scotland has one of highest levels of public procurement spend on SMEs in the EU. The Bill will build on and secure that success and continue to make it easier for SMEs to find and compete for public sector contracts.”

Unions welcome plan

Grahame Smith, general secretary of the Scottish Trades Union Congress (STUC) said: “The STUC enthusiastically welcomes parts of this important Bill especially its provisions to disqualify firms engaging in tax avoidance and blacklisting from the public procurement process and the commitment to introduce further guidance on workforce matters.”

He added that parts of the legislation were “very disappointing” adding: “It is difficult to believe that community benefits will be extended and improved by simply handing contracting authorities a duty to ‘consider’ whether to impose as part of the contract.

“The STUC is also sceptical that the significant additional requirements placed on local authorities and other contracting agencies will have ‘no overall net impact on costs’ “.

Vaughan Hart, managing director of the Scottish Building Federation welcomed the publication of the Bill.

“This legislation has been a long time coming.” he said.

“We have recently highlighted the spiralling cost to Scottish construction firms of participating in public tenders - now running to almost £100 million a year.

“With a growing pipeline of publicly funded infrastructure projects planned over the years ahead, this Bill offers the potential to transform the efficiency of public procurement -and to encourage many more particularly smaller building companies to bid for public sector contracts. We will look forward to scrutinising the detail in the months ahead.”