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Public sector clients must monitor their supply chains

Monday August 17th, 2015

The Government’s announcement that it plans to tackle the horror of child slavery by making UK companies responsible for the employment practices of their supply chains surely raises wider opportunities for public sector procurement.

There is every reason why the public sector as a purchaser of goods and services should require their suppliers, and in turn those suppliers’ suppliers throughout the supply chain, to meet defined standards. This is especially the case for employment standards.

John Tizard

John Tizard

Many public bodies are insisting that contracted providers of services should pay the Living Wage (though there is a long way to go in respect of critical services such as social care). Yet it is striking that few public bodies have as yet chosen to set the same requirement for the suppliers of goods.

I feel that the public sector procurement profession should launch an informed public debate on what can be done to ensure that wider public policy goals are secured when public money is deployed to purchase goods and services, as much as when these services are directly managed within the public sector. Public procurement should be ‘values based’, not price based, and all participants. including suppliers, should be required to match these values.

Such a debate should include how to ensure, and the implications of requiring that:

  • all suppliers and those employers in their goods and services supply chains in the UK pay the Living Wage; recognise trade unions; and can prove that they are exemplar employers
  • all suppliers and those employers in their goods and services supply chains outside the UK pay the local equivalent of the Living Wage; meet ILO’s standards of employment; forbid slave or any other form of forced labour; and adopt defined health and safety standards for all their employees
  • all suppliers and the suppliers in their goods and services supply chains, wherever they are in the world, meet, at the bare minimum, EU standards for environment sustainability
  • all suppliers (and the suppliers in the supply chains), wherever they are located, practise defined standards of governance and ethics
  • all these conditions be included in all public sector contracts; and how such contractual terms can be enforced in proportionate and non-bureaucratic yet robust ways

If the public sector were to adopt such measures in the UK, it would be in a strong position to argue for an EU-wide approach and wider international applications; and to persuade the UK business sector to follow suit.

The level of public spend with the business, social and charity sectors is very significant and is forecast to grow in absolute terms and as a proportion of GDP over the next decade. Accordingly, there are strong arguments for harnessing this expenditure to secure political, social, environmental and economic goals – which would surely be a sign of mature and “joined up” government.

There are many other policy goals that can be sought through external spending by the public sector, but the ones listed earlier in this piece would be a great start on what should become as natural in public procurement as the application of the EU public procurement regulations. And ideally, the conditions listed above would become integral to these EU regulations.

I don’t believe these suggestions are onerous or bureaucratic. Rather, I believe they are common sense, and I call upon the public procurement profession to seize the initiative and show bold progressive leadership and demonstrate that public procurement can have a moral purpose.

 

John Tizard

Online: www.johntizard.com
Twitter: @johntizard
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