End of pay rule set to cut outsourcing costs

Scrapping of two-tier code will enable public sector contractors to cut staff pay and benefits

Francis Maude

Francis Maude

The two-tier code regulating pay and conditions to staff in the public sector has been scrapped by the government. The code, introduced in 2003, was created to ensure that contractors providing a public service employed new recruits on comparable terms as existing staff, including a “reasonable” pension.

The government has replaced the code with the non-statutory ‘Principles of Good Employment Practice’. This will enable private firms bidding for public sector work,...

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