Fair Deal Webinar

Gary Delderfield and Jane Marshall
18 October 2013
Fair Deal Agenda
•
•
•
•
•
•

What is it
How has it changed
How does it apply to new contracts
How does it apply to retend...
Fair Deal
- What is it?
Fair Deal:
What is it?
• 1999 – HM Treasury non-statutory guidance
• 2000 – Annexed to Cabinet Office Statement of
Practic...
Linked to changes to public service
schemes
• Retention of Fair Deal protection part of the
‘deal’
• Separate Heads of Agr...
New Fair Deal
- How has it changed?
New Fair Deal:
When does it come into effect?
• Immediate effect!
• Reflected in procurement practice as soon as
practicab...
New Fair Deal:
Which bodies does it apply to?
• Central government departments and agencies
• NHS
• Extended to:
– maintai...
New Fair Deal:
Application to local government?
• Still covered by Best Value Authorities Staff
Transfers (Pensions) Direc...
New Fair Deal
- New contracts
First generation contracts:
Old Fair Deal – A Quick Reminder
PUBLIC BODY
Service
Contract

Public
Service
Pension
Scheme

TUPE

CONTRACTOR

Bulk
Transfer
GAD
Certified
Scheme

OR
Publ...
First generation contracts:
New Fair Deal
PUBLIC BODY
Service
Contract

TUPE

CONTRACTOR

Public
Service
Pension
Scheme
First generation contracts:
New Fair Deal
•
•
•
•
•

Delivered by continued access on new contracts
Significant change to ...
First generation contracts:
New Fair Deal
• Delivered by continued access on new contracts
• Significant change to old Fai...
First generation contracts:
New Fair Deal
• Non-active members
– enrol back into scheme on day new
employment commences
• ...
Participation in the public service
pension schemes
• Terms still to be decided by each scheme
• Amendments required in so...
First generation contracts:
New Fair Deal
• Pros:
– Simpler
– Cost savings (direct
and indirect)
– No bulk transfers
– Emp...
New Fair Deal
- Retenders
Re-tenders:
Old Fair Deal – A Quick Reminder
2013

2003
PUBLIC BODY

Service
Contract

TUPE

CONTRACTOR 1

Public
Service
Pension
Scheme

PUBLIC BODY
New
Service
Contr...
Retenders:
New Fair Deal
2013

2003
Public
Service
Pension
Scheme

PUBLIC BODY

Service
Contract 1

TUPE

Bulk
Transfer
1

PUBLIC BODY

Bulk
Transf...
Retenders:
New Fair Deal
• Default - Access back to appropriate public
service pension scheme (Change from 2012 draft
guid...
Retenders:
New Fair Deal
• Details provided to bidders:
– Letter A (BCS onward bulk transfer terms)
– Letter B (Terms requ...
Retenders:
New Fair Deal
•

•
•
•
•

Works in an ideal world:
– Knowledge and understanding of new regime
– Enforceable on...
New Fair Deal
- Practical issues
Practical issues:
- Which bodies are not covered by Fair
Deal?
• Local and other best value authorities
• Further and high...
Practical issues
- Existing procurements?
• New Fair deal has immediate effect
• Existing procurement not to be terminated...
Practical issues
- Future of broadly comparable schemes
• New contracts - May be exceptional
circumstances when apply old ...
Practical issues
- Returning employees to public
service schemes
• Circumstances other than retender?
• Examples:
– Insolv...
Questions

33
Fair Deal Webinar
•
•
•
•

Fair Deal Briefing Note
Webinar recording on website
Eversheds Speedbriefs
Reform Tracker Page
For further information please
contact:
Gary Delderfield
: 0845 497 1786
: 0782 691 8202
@:
garydelderfield@eversheds.co...
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Fair Deal webinar - 18 October 2013

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Fair Deal webinar - 18 October 2013

  1. 1. Fair Deal Webinar Gary Delderfield and Jane Marshall 18 October 2013
  2. 2. Fair Deal Agenda • • • • • • What is it How has it changed How does it apply to new contracts How does it apply to retenders Practical issues Questions
  3. 3. Fair Deal - What is it?
  4. 4. Fair Deal: What is it? • 1999 – HM Treasury non-statutory guidance • 2000 – Annexed to Cabinet Office Statement of Practice on staff transfers • 2004 – HM Treasury further guidance • 2007 – Best Value Direction for local authorities • 2010 – Lord Hutton Interim Report • 2011 – HM Treasury Consultation • 2012 – Response and draft guidance • October 2013 – Final new guidance
  5. 5. Linked to changes to public service schemes • Retention of Fair Deal protection part of the ‘deal’ • Separate Heads of Agreement for each scheme: – New CARE benefit structure – New governance arrangements – Access for private contractors • LGPS – 2014 • Teachers, Civil Service, NHS etc – 2015 • Scheme specific changes – separate process
  6. 6. New Fair Deal - How has it changed?
  7. 7. New Fair Deal: When does it come into effect? • Immediate effect! • Reflected in procurement practice as soon as practicable • Changes to public service schemes to be made asap • Long-stop date April 2015
  8. 8. New Fair Deal: Which bodies does it apply to? • Central government departments and agencies • NHS • Extended to: – maintained schools (except where local authority specific guidance applies) – academies; and – other parts of public sector under control of Government ministers
  9. 9. New Fair Deal: Application to local government? • Still covered by Best Value Authorities Staff Transfers (Pensions) Direction 2007 • Employees in maintained schools where employed by local authority • Possible DCLG consultation on amendments to the Direction? • Relevant where commissioning former NHS services • Fair Deal does apply to other bodies in LGPS – e.g. academies
  10. 10. New Fair Deal - New contracts
  11. 11. First generation contracts: Old Fair Deal – A Quick Reminder
  12. 12. PUBLIC BODY Service Contract Public Service Pension Scheme TUPE CONTRACTOR Bulk Transfer GAD Certified Scheme OR Public Service Pension Scheme £££
  13. 13. First generation contracts: New Fair Deal
  14. 14. PUBLIC BODY Service Contract TUPE CONTRACTOR Public Service Pension Scheme
  15. 15. First generation contracts: New Fair Deal • • • • • Delivered by continued access on new contracts Significant change to old Fair Deal! No choice for bidder No bulk transfer Employee eligible to be a member of public service scheme - enrol back into scheme on day new employment commences – Cost implications! • Protection to cease if stop working on contract • Ability to voluntarily agree changes to T&Cs?
  16. 16. First generation contracts: New Fair Deal • Delivered by continued access on new contracts • Significant change to old Fair Deal! • No choice for bidder • No bulk transfer
  17. 17. First generation contracts: New Fair Deal • Non-active members – enrol back into scheme on day new employment commences • Cost implications • Protection to cease if stop working on contract • Ability to voluntarily agree changes to T&Cs?
  18. 18. Participation in the public service pension schemes • Terms still to be decided by each scheme • Amendments required in some cases • Known unknowns: – ‘Participation Agreement’ required – Differential rate of employer contributions? – Exit payment? – Indemnities, bonds or guarantees? – Administration costs?
  19. 19. First generation contracts: New Fair Deal • Pros: – Simpler – Cost savings (direct and indirect) – No bulk transfers – Employee/union friendly • Cons: – Lack of control – Terms of participation? – Unknown costs?
  20. 20. New Fair Deal - Retenders
  21. 21. Re-tenders: Old Fair Deal – A Quick Reminder
  22. 22. 2013 2003 PUBLIC BODY Service Contract TUPE CONTRACTOR 1 Public Service Pension Scheme PUBLIC BODY New Service Contract Bulk Transfer 1 GAD Scheme GAD Scheme 2 Bulk Transfer 2 TUPE 2 CONTRACTOR 2
  23. 23. Retenders: New Fair Deal
  24. 24. 2013 2003 Public Service Pension Scheme PUBLIC BODY Service Contract 1 TUPE Bulk Transfer 1 PUBLIC BODY Bulk Transfer 2 New Service Contract 2 £££? CONTRACTOR 1 GAD Scheme TUPE 2 CONTRACTOR 2
  25. 25. Retenders: New Fair Deal • Default - Access back to appropriate public service pension scheme (Change from 2012 draft guidance) • Option for bulk transfer from current BCS on day for day (or equivalent)credit basis
  26. 26. Retenders: New Fair Deal • Details provided to bidders: – Letter A (BCS onward bulk transfer terms) – Letter B (Terms required by public service scheme) • Bidders indicate agreement or price adjustment!! • Shortfall underwritten by authority
  27. 27. Retenders: New Fair Deal • • • • • Works in an ideal world: – Knowledge and understanding of new regime – Enforceable onward bulk transfer terms – Early engagement with public service scheme – Timely provision of information to bidders Will it work in practice? Extra work and cost for bidders Financial risk if get it wrong Cost to public body of underwriting shortfall
  28. 28. New Fair Deal - Practical issues
  29. 29. Practical issues: - Which bodies are not covered by Fair Deal? • Local and other best value authorities • Further and higher education • Social housing • Other parts of public sector – open to adopt Fair Deal principles
  30. 30. Practical issues - Existing procurements? • New Fair deal has immediate effect • Existing procurement not to be terminated or delayed to accommodate new Fair Deal • If at advanced stage – contracting authority to consider if legitimate or desirable to apply new Fair Deal • Careful consideration of procurement law!
  31. 31. Practical issues - Future of broadly comparable schemes • New contracts - May be exceptional circumstances when apply old Fair Deal • Re-tender - Treat bidders equally - Incumbent to have option? • Comparable to current public service scheme • Where not possible – comparable to old scheme • Exceptional circumstances – require incumbent and bidders to offer BCS • Only if not otherwise possible to comply with procurement law
  32. 32. Practical issues - Returning employees to public service schemes • Circumstances other than retender? • Examples: – Insolvent employer – Change of ownership – Sub-contracting to new employer • Case by case basis
  33. 33. Questions 33
  34. 34. Fair Deal Webinar • • • • Fair Deal Briefing Note Webinar recording on website Eversheds Speedbriefs Reform Tracker Page
  35. 35. For further information please contact: Gary Delderfield : 0845 497 1786 : 0782 691 8202 @: garydelderfield@eversheds.com Jane Marshall : 0845 497 1219 : 07919 173 281 @: janemarshall@eversheds.com

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