Welsh public bodies and contractors entering into construction or outsourcing contracts with Welsh Government and Welsh public bodies need to be aware of the new socially responsible reporting duties, the new model clauses for works contracts over £2m and the public services outsourcing and workforce code.

Background

Y Deddf Partneriaeth Gymdeithasol a Chaffael Cyhoeddus (Cymru) 2023/The Social Partnership and Public Procurement (Wales) Act 2023 (the Act) requires public bodies to add value and promote the well-being of people in Wales through procurement. These bodies include those defined as 'public bodies' in the Deddf Llesiant Cenedlaethau’r Dyfodol/Well-being of Future Generations (Wales) Act 2015, such as local authorities, Local Health Boards, NRW and Transport for Wales.

Parties entering into certain types of contract for or with Welsh Government and Welsh public bodies, including construction or outsourcing contracts, need to be aware of the requirements and the recent developments that have been enacted.

Rheoliadau Partneriaeth Gymdeithasol a Chaffael Cyhoeddus (Cymru) 2026/The Social Partnership and Public Procurement (Wales) Regulations 2026 (the Regulations) came into force on 25 March 2026 and add further detail to the requirements of the Act, in terms of annual reporting.

Additionally, provisions relating to social public works clauses, which will be mandatory to consider in construction contracts over £2m for Welsh public bodies, have come into force and the Welsh Government has recently published a set of model clauses.

The new Plaid Cymru Welsh Government is expected to apply the socially responsible procurement framework more ambitiously, and therefore further guidance or regulatory extension is possible.

Caffael Cymdeithasol Gyfrifol/Socially responsible procurement

A contracting authority must seek to improve economic, social, environmental and cultural well-being by ensuring that it carries out procurement in a socially responsible way. A 'prescribed contract' includes major construction contracts (those with an estimated value of £2m or more) and outsourcing services contract. Under the Regulations, 'prescribed contracts' now also includes:

1. contracts between one or more economic operators and one or more contracting authorities in Wales for the execution of works, the supply of products or the provision of services; and
2. framework agreements, with the exception of certain excluded contracts and those with an estimated value under threshold, which is currently c. £5m.

The contracting authority is required to create, maintain and publish a register of contracts, including details such as the name and address of the contractor, the subject matter and the estimated value of the contract.

Annual reporting

A contracting authority which has awarded any prescribed contracts in a financial year must prepare and publish an annual report on public procurement setting out certain information.

Regulation 6 of the Regulations supplements section 39 of the Act and requires that, where a contracting authority is required to publish such an annual report, it must include information about the estimated value of contracts awarded to contractors (expressed as a percentage) that satisfy the following conditions:

• provides Welsh language opportunities;
• lives in Wales or has its principal place of business in Wales;
• is an SME;
• is a value-driven NGO which reinvests its surpluses to further social, environmental or cultural objectives;
• has a publicly-available and current carbon reduction plan which confirms a commitment to achieving net zero greenhouse gas emissions by 2050;
• has an environmental policy statement;
• is an Accredited Living Wage Employer;
• recognises a trade union;
• has no workers on a zero hours contract or, if it does, regularly reviews the appropriateness of such arrangements;
• has an equality, diversity and inclusion (EDI) policy and provides regular EDI training to all staff; or
• is a signatory to the Welsh Ministers’ code of practice on ethical employment in supply chains.

This information is required by the Welsh Ministers to assess the extent to which a contracting authority meeting its socially responsible procurement objectives contributes to the achievement of well-being goals, including in relation to economic, environmental and social considerations and promoting and facilitating use of the Welsh language.

Cymalau gwaith cyhoeddus cymdeithasol/Social public works clauses

The Welsh Ministers have published model clauses for major construction contracts, called social public works clauses, which are designed to improve economic, social, environmental and cultural well-being. The intended improvements relate to:

• prompt payments;
• providing employment opportunities to younger people, older people, long-term unemployed, disabled people and otherwise disadvantaged people;
• compliance with health and safety and trade union representation;
• providing appropriate training;
• providing sub-contracting opportunities to SME and volunteer organisations; and
• environmental concerns, including sustainable management of natural resources, use of sustainable materials, climate change resilience reduction of greenhouse gas emissions and enhancement of the natural environment and biodiversity.

Welsh Ministers will need to be notified of the reasons for any decision not to include the clauses and can give a Ministerial Direction if they do not accept them. For transparency, these decisions will be in the public domain.

If a contracting authority intends to include social public works clauses in a major construction contract, it must also take all reasonable steps to ensure these clauses are implemented between the contractor and any subcontractor. 

In addition, the public services outsourcing and workforce code has been published and contains model clauses for major outsourcing contracts; this deals with employment and pensions matters and is intended to avoid a two-tier workforce.

Socially responsible procurement: What contractors should know

Although the Act applies directly to public bodies in Wales, the entire supply chain for prescribed contracts is impacted. 

Contractors bidding for work from contracting authorities in Wales need to be aware of the requirements of the Act and the Regulations and be prepared to demonstrate compliance as part of the tender process.

In particular, contractors should:

• be prepared to demonstrate compliance with the conditions set out in regulation 6 of the Regulations when tendering for work under a prescribed contract, as implementing these initiatives is likely to assist in meeting scoring criteria and may carry significantly greater weight under the new Plaid Cymru administration;
• be aware of the information that a contracting authority is required to publish in its register of contracts, and consider issues regarding commercially sensitive information; and
• consider the model social public works clauses, not only when entering into its own major construction contracts, but how these provisions can be incorporated in its downstream sub-contracts.