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Government FM contracts should include apprentices

22 April 2009

New guidance to help Government departments encourage contractors to provide skills training and apprenticeships in all publicly let contracts has been announced by Skills Secretary John Denham and Exchequer Secretary to the Treasury, Angela Eagle.

The guide, published by the Office of Government Commerce (OGC), provides practical advice to those responsible for letting publicly funded contracts on how to embed skills training and apprenticeships in all aspects and stages of the procurement process. It covers all types of public contracts for products and services from FM and IT to construction.

Total public procurement is worth around £175bn a year and offers a unique opportunity to invest in the nation's skills and build a more productive workforce better able to respond to technological changes. Other benefits include improving public services, getting greater value for money and helping people progress in their careers.

The guide advises those responsible for procurement on:
* how they can work within UK and EU regulations to include skills and apprenticeship requirements in public procurement processes as long as the requirements are relevant, proportionate, don't compromise value for money and don't unfairly discriminate against prospective contractors;
* how they can promote skills and apprenticeships at each stage of the procurement process, from the initial identification stage right through to the contract management stage; and
* case studies and illustrations of where authorities have successfully embedded skills and training opportunities in their procurements.

Skills Secretary John Denham said: "In tough times like these it is vital that we continue to invest in our nation's skills. We want to play a leading role by making greater use of the £175 billion a year Government spends procuring goods and services to promote skills and training opportunities. We have already made good progress by making sure that public construction projects include apprenticeships and training, going some way to ensuring that vital skills are built up. It is only right that the significant investment in new schools, colleges and hospitals does more than provide new buildings for world-class public services.”

Exchequer Secretary to the Treasury Angela Eagle said: "The publication of this pamphlet is a vital step in making the most out of the £175 billion a year that Government spends on public sector procurement. In helping to support and promote vital skills, training and apprenticeships, Government is ensuring that individuals and businesses have the tools they need to deal with the global economic downturn."

John Cridland, CBI Deputy Director-General, said: "Developing people's skills will help our economy to emerge from the recession in the best possible shape. It's right that the government continues to play its part by using public procurement to enhance the UK's skills base. The guidance and case studies in the OGC report will help ensure that central government and the wider public sector can improve the way they use their purchasing power to drive this critical investment in skills."

TUC General Secretary Brendan Barber said: "During the recession it is vital that the nation's investment in skills, and particularly apprenticeships, is maintained and indeed grows. Good employers will recognise that is crucial both to survive now and prosper in the future when the economy recovers. Public procurement is a key route to driving that investment, ensuring young people and adults have access to the skills and training opportunities they deserve. The TUC supports this new guidance which will help public authorities lead the way in driving investment in the skills of the workforce."

The guidance builds on last summer's commitment that all employees working on central Government contracts should have access to basic literacy and numeracy skills training if they needed it.

In last November's Pre-Budget Report, Ministers committed to consider the inclusion of relevant skills and apprenticeship requirements in the procurement of publicly funded construction projects. Making sure that public construction projects include apprenticeships and training will go some way to ensuring that vital skills are built up and maintained so that the industry is ready to take advantage of the upturn when it comes.

In 2008 the Department for Innovation Universities and Skills introduced a requirement that all building colleges for the future projects have a formal training plan in place that maximises access to apprenticeships for their workforce.

The Department for Children Schools and Families recently announced that it expected 1,000 extra apprenticeship places to be made available as part of its Building Schools for the Future programme. In addition the Olympic Delivery Authority is including a condition in new contracts that three per cent of the workforce working at the Olympic Park site are apprentices, creating an extra 250 places.

The Homes and Communities Agency is also committing today to maximising employment, training and apprenticeship opportunities across its annual investment budget of more than £5 billion. The HCA will be looking to include skills and training requirements in the next round of bids for the National Affordable Housing Programme and for Property and Regeneration work. It will also be working with partners on a voluntary basis to explore the scope for providing skills and apprenticeship opportunities on existing housing development and regeneration projects.

Ministers are now looking at how to extend the commitment beyond construction projects. Central Government IT contracts are worth around £14 billion annually and in the coming weeks Ministers will be holding a roundtable with the IT industry about how skills training opportunities can be embedded in public IT projects.

1. Promoting Skills Through Public Procurement can be found at http://www.dius.gov.uk/skillsprocurement.
2. In July 2008, central government, the Trade Unions and private and third sector organisations agreed a Joint Statement on access to skills, unions and advice in Government procurement, aiming to improve the quality of public service delivery by providing service providers' employees with access to basic skills training. For further details see: http://www.cabinetoffice.gov.uk/media/cabinetoffice/workforcematters/assets/CO_joint_statement.pdf

3. The 2008 Pre-Budget Report (PBR) announced that whenever Government Departments and their agencies let new construction contracts, they will consider making it a requirement that successful contractors have apprentices as an identified proportion of their workforce.
4. According to the Office of Government Commerce the public sector including Government departments, agencies and Local Government spend £175 billion annually on the procurement of products and services


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