308. Public procurement was cited by many witnesses
as an important lever the Government could use to raise the ethnic
minority employment rate, both directly and by influencing the
recruitment and subcontracting decisions of private companies.
The Minister for Employment and Welfare Reform, Jim Murphy, told
us that procurement was the DWP's "most effective intervention
at the moment," and that it could create a culture in which
"if organisations wish to procure from Government then they
have to be more sensitive to the issue of ethnic minority employment,
with a fair chance for many more people to get involved in the
Alan Christie of the CRE told us that "public procurement
is probably the best way of getting employment opportunities,
raising the employment rate of disadvantaged populations, like
ethnic minorities [
309. The Minister told us that he had asked the Ethnic
Minority Employment Task force (EMET) to focus on how public procurement
could promote ethnic minority employment. However, he said that
this was "not in a quota sense but in a monitoring sense."
International evidence, he said, showed that this could have a
significant impact on companies hoping to win Government contracts.
He added that a stricter approach could be adopted if this approach
did not produce results: "if that does not have the desired
and anticipated outcome then, of course, we could look much further."
310. The Ethnic Minority Employment Taskforce, a
cross-departmental body made up of ministers and representatives
from groups such as the TUC, CBI and CRE, is running pilots to
investigate promoting racial equality through public procurement.
For example, Jobcentre Plus is piloting "revised terms and
conditions in recently let New Deal contracts" with the aim
of requiring both suppliers and subcontractors to "supply
and comply with policies on harassment, equality, diversity training
and supplier diversity," and requiring suppliers to "report
the proportion of employees who are female, disabled and from
an ethnic minority group." Other approaches are being tried
in pilots at the Home Office and Department for Education and
Skills. EMET notes that the pilots "do not include setting
quotas or any positive discrimination measures."
311. The focus on procurement is to be welcomed,
as it is likely to have a real impact on the decisions made by
businesses competing for Government contracts. However, we heard
some evidence that the Government as a whole is not doing enough
to make use of this lever. Alan Christie of the Commission for
Racial Equality told us it was "concerning" that "more
effort is not put into making that [procurement policy] broader,
deeper, bigger, more successful than it is currently."
312. The Ethnic Minority Advisory Group told us that:
"[w]hilst procurement policies may be underpinned by clear
equality and diversity principles, the application by public and
private sector institutions invariably fail in delivering these
] an emphasis on clear equality and diversity enforcement
principles is needed to ensure that these are delivered in practice
and impact on employment outcomes for ethnic minority groups in
It stated that existing procurement rules fail to create a level
playing field for ethnic minority businesses and organisations:
"Fatima, the Asian women's network based in
] says that current policies in local authorities
such as Best Value do not allow ethnic minority businesses or
organisations to compete equally for public sector contracts as
their size often requires them to adopt full cost recovery accounting
in their bids which makes them less competitive than the more
established and larger companies [
] local authorities are
ill-equipped to support ethnic minority organisations and their
procedures, so even at the pre-qualification level [there] are
barriers to entry."
313. If this problem is not addressed quickly, EMAG
warned, then inequities might become entrenched, because "most
authorities are in the process of drawing up their preferred supplier
lists now and so if ethnic minority organisations miss out in
this window it would take a few more years to catch up."
314. The problems created by existing procurement
rules were also mentioned by Alan Christie of the CRE, who told
us that "procurement professionals will tell you that this
is difficult, this is hard, there is an additional level of complication
and they have got many other factors to take into account [
meeting their competitive tender responsibilities, they have got
to get value for money, and so on and so forth."
Mr Christie told us that there were good examples of procurement
policy promoting ethnic minority employment, such as Transport
for London's procurement for the East London Line project.
315. As we discussed elsewhere in the report, the
DWP is currently centralising Jobcentre Plus procurement, in order
to create a "centre of excellence". We
recommend that the DWP ensure that its own procurement sets an
example to other public bodies in setting high standards for equal
opportunities policies in the firms with which it contracts. Promoting
racial equality should be one of the priorities of the new "centre
of excellence" in procurement. We recommend that if public
procurement proves to be a useful tool in improving racial equality,
all public bodies should adopt a similar approach to procurement.
We also recommend that the
DWP set out what "further" approaches it would consider
to promote racial equality.