David Cullinane (Waterford, Sinn Fein)
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201. To ask the Minister for Public Expenditure and Reform his views on the delay in the issuing of guidance to local authorities on the use of social contracts in public contracts; and if he will make a statement on the matter. [17810/16]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Government is keen to explore to scope for including social clauses in public contracts where they are suited to the objective of the contract and would have the greatest impact. In this context, the Office of Government Procurement (OGP) is examining social clauses with a view to assessing where they can be deployed to contribute to employment or training opportunities for the long term unemployed. 

It is important to adopt a targeted approach to the use of social clauses in 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.  

Two examples of this approach currently in progress are the Grangegorman Development and the Devolved Schools Build Programme.  In relation to the latter, a clause has been included in the Public Works contracts which require that:

- 10% of the aggregate time worked on site to have been undertaken by individuals who have been registered on a national unemployment register within the EU for a continuous period of at least 12 months immediately prior to their employment on the project.

- 2.5% of the aggregate time worked on site to have been undertaken by individuals who are employed under a registered scheme of apprenticeship or other similar national, accredited training or educational work placement arrangement.

Experience of these pilots have been positive and is contributing to the development of policy on this issue.

It should be noted that social clauses are not new.  A social clause requiring compliance with all aspects of Employment Law has been incorporated into the suite of public works contracts since their introduction in 2007.The clause permits deductions from the interim payments scheduled under the contract for non-compliance and places considerable a burden on both the contracting authority and Contractor in demonstrating and verifying compliance.

However, this is a complex area and account must also be taken to ensure that:

- value for money is not adversely affected;

- additional costs are not placed on domestic suppliers relative to other potential suppliers;

- contracts are of a minimum scale to absorb the increased administrative requirements, and;

- the targeted benefit is capable of being measured and monitored during the execution of the contract.

In this context also, care must be taken not to disproportionately impact on SME's bidding for public contracts.

The OGP advised that it would issue guidance on social clauses after the transposition of the new public procurement EU Directives, two of which were transposed last month.  I understand that the OGP will be issuing practical guidance to Public Bodies in the coming months.