​Changes to Public Procurement 1 April 2023 - Modern Slavery

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Modern slavery can occur in any country or sector, including the UK. The risk of modern slavery in a contract is not linked to its value, low value contracts can also pose a high risk of modern slavery.

​The UK Government has published updated guidance for public sector buyers that came into effect on the 1st April 2023. What are buyers required to do? Read on to find out.

Avoid a one size fits all approach 

In publishing the updated guidance on Modern Slavery the authors of  ‘Tackling Modern Slavery in Government Supply Chains’ are keen to point out that any modern slavery criteria and its implementation must be proportionate to the contract when assessing risks in existing contracts.

UK Government guidance states:
 
“Your approach must not impose any unnecessary burdens that would deter a wide diversity of suppliers, including small and medium sized enterprises (SMEs), Voluntary, Community and Social Enterprise (VCSE) suppliers and those owned by under-represented groups, from competing for public contracts. You should not adopt a blanket approach to managing modern slavery risks - your approach should be proportionate based on the risks identified”
 
It will require more effort, skill and experience on procurements part to conduct a supply chain mapping exercise and to segment the supplier base than it would to just implement a blanket approach to modern slavery.
 
Let’s now take a look at the UK Governments suggested approach to tackling modern slavery in Government supply chains.

The new 4 stage UK Government approach 
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1 Identify and manage risks
2 Risk assess existing contracts
3 Take action when victims of modern slavery are identified
4 Training
 
We will now look at each of the 4 stages in more detail.

1 Identify and manage risks
​

The steps involved in this stage are:

• Review and amend public procurement and contract management Standard Operating Procedures (SOPs).
• Assess modern slavery risks in new procurements using Table 1 in  ‘Tackling Modern Slavery in Government Supply Chains’
• Design new procurements in line with the associated risk level

 
Before you head off down a rabbit hole, you could start by inviting suppliers to complete the Modern Slavery Assessment Tool (MSAT).
 
The results should help you to establish where the supply chains are located, and the nature of risks in relation to those locations. MSAT could form part of a Request for Information (RFI), prior to the release of the Invitation To Tender (ITT).

​2 Risk assess existing contracts
​

The steps involved in this stage are:

• Carry out a risk assessment on your existing contracts
• Apply strengthened contract management to manage risks, working with suppliers to progressively improve

 
UK Government advisory notes suggest that:
 
“Even if a bidder has self-declared that the exclusion grounds do not apply, contracting authorities should conduct due diligence on the bidder and their supply chain members”
 
In 2022 the Department for Business, Energy & Industrial Strategy (BEIS)  pledged to increase enforcement to make sure good businesses aren’t undercut by unscrupulous rival employers who aren’t paying or treating their workers correctly.
 
My previous blog post discussed how mini umbrella company fraud is not limited to a specific trade sector; it can be found whenever labour supply chains are used.
 
The guidance suggests public sector buyers pay attention to any contract that is reliant on:

• low paid, low-skilled labour,
• temporary, agency and seasonal workers,
• dangerous and/or physically demanding work,  
• remote and/or home based workers.  

 
The existence of one or more of the above factors is said to put the contract at a higher risk of modern slavery.

​3 Take action when victims of modern slavery are identified
​

The steps involved in this stage are:

• Work openly and proactively with your supply chain to resolve issues and change working practices
• Consider terminating your contract only as a last resort

 
For more detail on modern slavery in public procurement processes please read this blog ‘is your supply chain breaking the law?’

4 Training
​

​The steps involved in this stage are:

• Raise awareness of modern slavery and human rights abuses amongst your staff and deliver/make available appropriate training.

 
Modern slavery is an issue that requires continuous focus and improvement and is reliant on effective supplier relationship management.
 
The best way to mitigate the risks of modern slavery is through effective contract management, unannounced supplier site visits and supplier audits, speaking directly to employees.
 
UK Government guidance states that the primary driver to taking action should be to address the human risk and the victims of modern slavery in the supply chain, not reputational risk to the organisation.

The barriers to change 
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Public sector buyers have a reputation for poor contract management. Part of the issue may be linked to the targets set for public sector buyers.
 
A decade of targets associated with contract uptake and framework revenue generation has provided no incentive for buyers to manage the contract, aside from chasing management information for billing purposes.
 
However, a change of focus may be hard to implement, as most public procurement organisations have become dependent on the revenue generated from framework agreements.

About the Author
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Naomi Clews

Naomi Clews, management consultant and owner of boutique procurement advisory firm Naomi Clews Consultancy Limited has 18 years public procurement process knowledge, experience and skills. Find out more here. ​