The power that the scale of public sector procurement offers to negotiate better prices has long been understood and is widely acknowledged. The public sector collectively spends over £250bn a year and is increasingly using collective negotiation to bring that scale to bear through purchasing frameworks, agreements negotiated by purchasing consortia which set out minimum standards and maximum prices for goods and services as varied as computer equipment and the provision of temporary cleaning staff.
Less acknowledged is the potential of public buying - through its scale and its wide scope - to positively influence responsible procurement among suppliers. Though the state has set sustainability standards, through both guidance and regulation, these are generally light touch. Little is required of businesses in terms of, for example, addressing modern slavery in their supply chains, and most public organisations fell outside organisational requirements to report under the Modern Slavery Act 2015.
Sustainability issues are becoming increasingly acute, however. The climate crisis is intensifying, and our understanding is growing of the complexities involved in identifying and remedying cases of modern slavery. There is also increasing recognition of the links between such issues. Climate change is making parts of the world more difficult to sustain human life, creating migrations which make those leaving their traditional regions vulnerable to exploitation, for example. Understanding where goods originate would allow buyers to monitor a range of sustainability issues since, for example, measuring greenhouse gas emissions in a product's supply chain requires an appreciation of where materials and good have travelled from and to, and the provenance of goods is essential to knowing where to begin looking for cases of modern slavery in supply chains.
Public procurement’s potential role in helping to address such issues is therefore becoming increasingly important. Researchers at the University of Sussex, University of Bath, and the University of the West of England therefore conducted a study in 2023, along with the London Universities Purchasing Consortium and modern slavery charity Unseen UK, to understand how the UK public sector is addressing such risks. The project, funded by the Modern Slavery PEC, involved interviews with procurement staff in public sector organisations, their suppliers and focus groups with public sector buyers and people with lived experience of modern slavery.
"Climate change is making parts of the world more difficult to sustain human life, creating migrations which make those leaving their traditional regions vulnerable to exploitation"
The researchers found a general lack of recognition of the links between sustainability issues, which is hampering the ability of public sector organisations to address climate and modern slavery risks at the same time. The core cause of the public sector’s inability to address modern slavery and climate change in its supply chains is a lack of resources. Executives have not prioritised managing such risks, and the sector has gradually lost supply chain management expertise in favour of procurement knowledge over a number of decades. Purchasing consortia are delivering results beyond those that might be expected of such small organisations, but these are also short of the resources required to actively manage the range of suppliers they deal with on the ground.
Resource constraints mean that public sector buyers often resort to using sustainability data management firms - organisations which pool supplier information as a service sold to buyers - but many such organisations rely on self-reported supplier data and public sector buyers lack the expertise to know what the gaps are in these data and how to fill those gaps. The result is that many public sector organisations are relying on - and paying sometimes substantial amount of money to - third parties to manage significant risks without understanding the extent to which they are assured against those risks.
At the same time, while regulation is increasing on sustainability issues, the law makes it extremely difficult for public buyers to disqualify companies which are known to have poor environmental and modern slavery records from tendering for public contracts. While individual public organisations can choose to prioritise responsible firms, therefore, unethical companies will continue to be listed among those firms which make it onto framework agreements, enhancing the risks that public goods are made unethically.
Perhaps most importantly of all, however, the scale and scope of public procurement could make public buying a key lever in improving the performance of private companies when it comes to assuring against climate and modern slavery risks. Forcing companies to continually improve how they reduce their climate impacts and mitigate and remedy modern slavery could create the “race to the top” that the Modern Slavery Act was supposed to create.
"The scale and scope of public procurement could make public buying a key lever in improving the performance of private companies when it comes to assuring against climate and modern slavery risks."
Forcing suppliers of cleaning services, for example, to carry out proper, ongoing checks, to develop expertise in identifying and dealing with cases as they arise, and creating relationships with the police and other relevant organisations would raise the bar for other firms in that industry and differentiate responsible firms from those which failed to take such issues seriously.
Dr Michael Rogerson, University of Sussex and Dr Johanne Grosvold, University of Bath has led the research project on public procurement in addressing modern slavery and climate change. You can read more about the project below.
