Mary Lou McDonald (Dublin Central, Sinn Fein)
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13. To ask the Minister for Public Expenditure and Reform his plans to increase the social dividend and community benefit from spending on public procurement contracts, in view of the impending requirements under the new EU rules agreed in January 2014. [42057/14]

Brendan Howlin (Wexford, Labour)
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The main purpose of the EU public procurement regime is to open up the market and to ensure the free movement of supplies, services and works within the EU having regard to Treaty of Rome principles including transparency, proportionality and equal treatment. This is the rationale that shapes the detailed rules (Directives) governing the regime.

The new EU rules comprise a suite of three Directives (Public Procurement, Utilities and Concessions) that repeal the existing rules governing the conduct of procurement across the EU but the basic architecture of EU procurement will remain intact. The changes in the new regime were agreed principally to streamline the public procurement process and to put in place more simplified and flexible rules to reduce red tape and to make the procurement process more efficient.

While most of the rules are mandatory for Ireland and all other Member States to implement into national law, there is some limited policy latitude permitted to Member States in transposing the new regime into national legislation. The Office of Government Procurement (OGP) is currently exploring policy choices as part of the transposition process. In this context, I launched on Friday last, 31st October, a public consultation on the new Directives.  The document is available on the OGP website www.procurement.ie and written submissions are invited from stakeholders and interested parties on the issues raised in the consultation document by 12 December 2014. Consideration will be given to the responses received, (including those related to the environmental, social and labour law considerations article 18(2) requirements)  when drafting the Statutory Instruments to implement the EU rules into national law.

Social clauses in contracts place obligations on suppliers to perform actions focussed on broader policy considerations. They can be used in public procurement in cases where they are targeted at factoring into the procurement process consideration of social issues such as employment opportunities, equal opportunities and social inclusion.  In order to be compatible with EU law, they must be made known to all interested parties at tender stage and must not restrict participation by contractors from other Member States.

As the Deputy is fully aware, the Government has recently supported in principle a Private Members Bill put forward by her Party in relation to social clauses.  The Government is not opposed to the principle of social clauses and sees significant merit in developing a social clauses framework.  We believe however that the inclusion of social clauses needs to be done in a targeted manner and not in the "across the board manner" suggested by the Bill.  The Government favours a targeted approach to the use of social clauses focussed on contracts where employers are likely to be hiring additional workers to deliver the contract.  This is likely to mitigate the risk of displacing workers already in employment while offering the opportunity of assisting with labour activation measures for the long-term unemployed.  

I should point out that, as the Deputy is aware, there are already a number of initiatives under way in this area.

A devolved schools programme is being administered by the NDFA on behalf of the Department of Education and Skills.  This involves three contracts covering fourteen sites with the works comprising both stand-alone, new build and extensions/refurbishment works. Construction work started on all three of the contracts during Spring 2014. The aggregate capital value of the contracts is c. €70m.  I understand that overall compliance in relation to the pilot clause has been good. The Department of Social Protection and its local Intreo offices are working closely with the appointed contractors to support the pilot initiative.  There has been strong positive engagement from the contractors involved in each of the projects.

In addition on the 9th of June I announced the establishment of a Social Clauses Project Group to pro-actively look at projects with a view to including social clauses to ensure those awarded contracts contribute to employment or training opportunities for long term unemployed.

Specific projects that are currently in planning and are deemed potentially suitable for the inclusion of employment opportunities and social inclusion will be identified and targeted to maximise the potential opportunities from these projects.

I have asked the Office of Government Procurement to review this pilot project after 12 months and then to issue guidance.

Overall the Government believes that further debate and discussion is required as to the correct policy approach regarding enabling social clauses, mindful of the need to maintain flexibility and adapt to changing circumstances.