6.23 The Government's Best Value review in 2002 has led to the publication of the Best Value Code of Practice, which came into practice in March this year, and is currently being rolled out across England for all new contracts. The Best Value Code of Practice applies to new joiners to workforces employed by contractors in areas covered by Best Value. These include local authority projects in a wide variety of areas, such as transport, education, police and fire services, waste management, and housing.
6.24 The Code of Practice protects both term and conditions of employment and pensions. It requires that new joiners be offered terms and conditions that are "fair and reasonable" and "overall, no less favourable" than those available to transferees. The deal is designed to protect workers while maintaining the flexibility for employers to deliver quality public services. It does not prevent firms in tight labour markets from offering packages superior to those afforded by the public sector.
6.25 The terms and conditions should "offer reasonable pension arrangements", defined as either:
• membership of the local government scheme;
• membership of a "good-quality" employer pension scheme (if it is defined-contribution, the employer must match employee contributions up to six per cent); or
• a stakeholder pension (with the same matching requirement).
The government has since announced that this standard should also be written into new TUPE regulations to apply to all compulsory transfers of staff in the economy. It will remain open to any employer to set out a standard for protection of transferees which exceeds this minimum standard: and the government remains committed to maintaining its own standard of pension protection where TUPE applies.
6.26 The Government is monitoring the performance of these new measures to assess their effectiveness in preventing the emergence of the two-tier issue, whilst maintaining flexibility to support the delivery of high quality public services. Going forward, the Office of the Deputy Prime Minister have recently welcomed a proposal from the LGA, the Employers' Organisation for Local Government, the TUC and the CBI on an alternative dispute resolution procedure as part of the Code of Practice, although the detail is yet to be finalised.