Is the UK Getting it Wrong on "Equalities"?

Jason wrote last week about the UK Government's increased focus on diversity in purchasing. As your UK correspondent, I couldn't let his comments pass without comment -- particularly as they were somewhat critical. (I'll ignore his dig about how Britain has "the distinguished legacy of spreading bureaucracy worldwide," other than to say I would characterise it as “spreading good government worldwide.”)

I have to declare an interest here: Over the years, I have worked on a number of occasions as a consultant with the UK Treasury's Office of Government Commerce, whose role is to improve public procurement. I have even worked a little around the whole “equalities” issue in public procurement and on projects to help smaller businesses (SMEs) gain a better chance of winning government contracts. I do, however, have some sympathy with Jason when he says, "at the end of the day, government should be in business to get the best value for taxpayers, period." But perhaps my issue is with the word “period.” Is “best value” the only goal, and anyway, how do we define “best value”? Clearly, it is not just lowest price. These days, very few of us are absolute, red-in-tooth-and-claw free marketeers. The bank bailouts probably cured that dream.

Government has a role; much as we may believe in the markets, they are not perfect. And none of us (I assume) would want our government to buy military equipment from “Axis of Evil” countries, even if it were really, really cheap; or goods manufactured by 7-year-old slaves in a pit somewhere. So governments are always going to consider SOME issues that are not purely who tenders the lowest price. The problem is in deciding where we should draw the line in terms of looking at other factors. Is it unreasonable for the UK government to take an interest in how construction firms are training youngsters as part of their multi-billion Olympic contracts? Or whether they are operating “sustainable” supply chains? Most of us, I suspect, would support such actions. What about encouraging those firms to train more women, who are still a minority in the engineering and construction industries? Or what about encouraging a more diverse workforce in (say) a major law firm that works for government but has precious few female or ethnic-minority partners? It doesn't seem unreasonable to me that the UK government has some right to promote wider social policies through the £170 billion a year it spends with suppliers.

But I do agree with Jason in that it mustn't become a huge bureaucratic burden. The work OGC has been doing on SME access to contracts for instance, arising from the Glover Review of 2008, has been very keen not to impose such burdens on business or government purchasers. (See chapter 5 of the report “Accelerating the SME economic engine: through transparent, simple and strategic procurement” for that discussion). We are well aware, for instance, of how the quota systems have worked (or not worked) in the US ... The other reassurance is that there are some checks and balances in the UK. The Business Ministry is well aware of burdens on industry, particularly at the moment given the recessionary situation. And the European Union keeps a close eye on public procurement; of course, that has some bureaucratic elements as well -- but the rules are genuinely designed to promote open competition. They insist, for instance, that public organisations can only use "equalities" as an evaluation factor in tenders where it is really relevant to the specific contract in question. I was involved a couple of years ago in a major government contract which involved the chosen supplier communicating with -- and even going into -- the homes of the most disadvantaged people in the UK; minorities, the very old, disabled people, and so on. Knowing that the supplier and its staff understood what we might call “diversity and equalities” issues was therefore key, so was made an important evaluation criterion, an example, I think, of an appropriate consideration of wider social factors in order to make a better purchasing decision. I would hope that the Equalities Act would make purchasers think about what they need from their suppliers, and where it is appropriate to persuade or influence suppliers to do things differently. That does not mean that I hope that every contract will be accompanied by a 78-point “equalities checklist,” a bunch of equalities inspectors, or some similar nonsense. And if I'm wrong, I will allow Jason to always say, "I told you so!"

Cheers, Peter

-- Peter Smith

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