Businesses bidding for future public sector contracts will have to show they can also help to improve society by tackling big issues such as modern slavery and climate change under plans announced by the Cabinet Office.
At the Social Value Summit in London on Monday, Cabinet Office minister David Lidington announced that contracts would have to take into consideration the social impact that the business has, and this covers a huge range of areas such as the employment of disabled people, the prevention of modern slavery and the protection of the environment.
Lidington said the move will help to deliver the government’s target of a third of contracts going to small and medium-sized businesses by 2022. It suggested that it will also identify modern slavery risks in the government supply chain, while also ensuring that it protects the environment in as many ways as possible – including through procurement.
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The Cabinet Office minister said the government would now take special care with contracts to use firms of all sizes, including those owned by under-represented groups, and would also look more deeply at the safety of supply chains to reduce the risk of modern slavery and cyber security vulnerabilities. It would also encourage firms to employ people from diverse backgrounds, including those with disabilities and from ethnic minorities, and focus on prioritising staff training to boost employees’ long-term employability. Finally, it will focus on environmental sustainability to reduce the impacts of climate change.
The announcement is the latest in a host of policy announcements from Lidington following the collapse of Carillion last January.
In June, he said that the government would change its procurement rules to include “social value” in all assessments of providers for government work, and to require the publication of key performance indicators – such as response rates, on-time delivery and customer feedback – for critical contracts. Then in November he announced plans to further increase transparency, including the development of so-called living wills for major contracts that set out how services could be managed in the event of a corporate failure.
“Every year, the government spends £49bn with external organisations and it is morally right that we make sure none of that money goes to any organisations who profit from the evil practices of modern slavery,” said Lidington.
“Similarly, it is right that we demand that the organisations we work with meet the high standards we need to protect our environment and employ workforces which represent our diverse society, including people with disabilities and those from ethnic minorities.
“By making sure that these social values are reflected not just across the government, but through all the companies we work with, we will take a major step towards our goal of creating an economy that works for everyone.”
There will be a 12-week public consultation held on the proposals, to seek feedback from suppliers, public bodies and members of the public.