House of Commons - Business, Enterprise and Regulatory Reform

Select Committee on Business, Enterprise and Regulatory Reform Written Evidence

Memorandum submitted by the CBI

1. The CBI welcomes this opportunity to provide evidence to the Committee's inquiry into the implementation of the recommendations of the Women and Work Commission.

2. The Commission examined the causes of the remaining gender pay gap for women. It recognises that much progress has been made since the introduction of the Equal Pay Act 30 years ago. More women are in employment and occupy a greater number of senior positions. Girls are outperforming boys at school and their aspirations are high. The gender pay gap has more than halved from 37% in 1970 to 13.5% today. However, the Commission recognises that despite these important changes, a pay and opportunity gap for women remains. It makes 40 practical recommendations to close the pay gap.

3. The CBI was closely involved in the work of the Commission. Our evidence to the Commission stressed that much progress has already been made by the business community to tackle the causes of the gender pay gap for women. The UK has a female employment rate of 70%—higher than in most EU states—and employers are using a variety of approaches to deliver further progress. In particular, they are seeking to encourage women into non-traditional roles and higher paying sectors.

4. Occupational and vertical segregation are being tackled by employers at the highest level. The numbers of women in senior positions is increasing—only 8% of all managers were women in 1990 but in 2003 nearly one third were female. Employers recognise the advantages that can be gained from increasing the number of women at board level and there are currently a number of schemes such as Women Directors on Boards that are dedicated to achieving this.

5. Employers in the UK also have a good record of providing flexible employment opportunities that suit the needs of women with caring responsibilities. Their willingness to embrace flexible forms of work have contributed to the high participation rates of women in the labour market. The right to request flexible working introduced in 2003, with CBI support, is working well—90% of requests have been granted.

6. While acknowledging that progress has been made, employers are not complacent. The Commission's final report was well received with employers—they are committed to tackling the remaining causes of the gender pay gap. Business is playing its role, but we acknowledge that more needs to be done by all stakeholders. Improved careers advice, better work experience and placements, improved education and gender stereotypes education, culture, media and sport are key themes. The report also rightly emphasises the Government's key role in supporting good and affordable childcare so that women are free to develop their career potential.

7. This paper sets out how employers and the CBI are responding to those Commission recommendations which are relevant to employers.

Recommendation 1

1. The Department for Education and Skills and relevant Scotland, Wales and Northern Ireland departments publish strategic documents, in reaction to the analysis in this report, which describe a systemic change in the way education is delivered in order to reduce stereotypical choices, improve take-up of vocational skills training, and improve employment outcomes for young women. The document should set out the goals for a national World of Work Programme, meshing with existing initiatives, but providing a new framework for vocational skills and work experience, through primary, secondary and tertiary education. It should include:

a curriculum for vocational skills that provides a joined-up framework for practical learning;

clarification of what students can expect in terms of entitlements to study for vocational qualifications, what the different qualifications and standards mean and how they relate to each other;

the promotion of Young Apprenticeships to 14-16 year olds in occupations not traditionally taken up by their gender;

employer visits to schools and "taster" days for primary school pupils;

work experience placements for pupils pre-14 in an occupation not traditionally taken up by their gender;

careers education co-ordinators in schools to organise the provision of group visits, "taster days" and work experience.

EMPLOYERS ARE CONTRIBUTING TO A JOINED-UP FRAMEWORK FOR PRACTICAL LEARNING THROUGH SECTOR SKILLS COUNCILS

2. Employers are actively working to ensure more women are encouraged to enter traditionally male-dominated careers in order to address present and future skills gaps and skills shortages and that young women recognise the pay consequences of joining certain sectors or careers.

3. The 14-19 educational reform programme seeks to raise the standing of vocational education and the introduction of Specialised Diplomas from September 2008 is an important initiative. Employers have been involved in developing the content of the Diplomas to ensure that they deliver skills employers want. With the greater emphasis on work related learning, there is a real opportunity inspire young people to consider non-stereotypical subjects and careers.

4. In addition three key SSCs are working on projects, with active employer involvement, designed play a key role in increasing the proportion of women in their industries. These activities are a key part of the Sector Skills Agreements in these sectors:

— e-skills are facilitating projects designed to increase the number of women in IT through the development of women's networks and schools workshops, such as the Computer Clubs for Girls initiative. This project is being rolled-out nationally, following successful piloting in the South East. The clubs target 10-14 year-old girls, offering e-learning which complements the national curriculum. Survey results show that around two-thirds of participants are more likely to be interested in an IT career than girls who have not been involved in the scheme.

— ConstructionSkills has addressed the need for more women to enter the industry through targeted events during National Construction Week, apprenticeship bursaries for women, their "Positive Image" campaign, and highlighting and promoting case studies of women in construction.

— SEMTA, the SSC for science, engineering and manufacturing technologies, organises projects such as Insight and WiSE (Women into Science and Engineering) in order to promote science and engineering as suitable careers to young women, parents, teachers, careers advisers and the media.

EMPLOYERS OFFER APPRENTICESHIPS IN NON-TRADITIONAL OCCUPATIONS

5. Many employers are doing a great deal to attract more women into their apprenticeship schemes in sectors where they are under-represented and lessons should be learnt from their good practice. [1]For example, the construction sector is looking for solutions to fill apprenticeship positions at a time when women represent only 1% of total starts. [2]Companies in engineering are also developing innovative ways of attracting girls and the CBI's report Raising skills, delivering prosperity published last autumn, provides good practice case studies on work experience and apprenticeships among CBI member companies to provide role models for employers looking to move forward.

6. Of course, employers wishing to recruit and retain a more diverse apprenticeship workforce encounter a number of barriers, the majority of which are attitudinal and social—as the Apprenticeship Task Force report Good Practice in Promoting Diversity in Apprenticeships made clear. Some employers have found that changing job descriptions and recruitment techniques for a variety of technological vacancies in sectors such as computing and engineering has produced big increases in the number of female candidates applying for them. BT rewrote their advertisements for Apprenticeships as "Career Starts" to remove the emphasis on what they call "poles and holes". By focusing on the way they advertise positions to potential applicants, BT addressed a hidden problem, that of "self-deselection" by women. BT found that women are more likely to rule themselves out of certain jobs than men, and that re-thinking job titles and job descriptions was effective in encouraging women to apply for jobs that were traditionally the preserve of men. This kind of seemingly minor adjustment had a significant impact on the application rates of females to certain jobs and training schemes. It is also a change which can easily be spread through the promotion of good practice among employers in the private and public sectors.

Case Study: Equalitec

Equalitec looks particularly at the issues surrounding returning to the workplace after a career break or period of unemployment, developing and testing schemes to address these issues. Promoting IT as an option for women is also important because it provides an opportunity for women whose background may be in SET (science, engineering and technology) but who may have taken time out of the labour market. Equalitec offers practical means to renew or re-orient a career in IT and technology by providing training modules, work placements, work shadowing, and mentoring circles.

EMPLOYERS ARE PLAYING A MAJOR ROLE THROUGH EDUCATION-BUSINESS PARTNERSHIPS

7. Occupational segregation (the concentration of women in lower paid sectors such as retail, health and childcare) is a major cause of the pay gap. Addressing it will require educators and employers to work together to improve the quality of careers advice and work experience. Old stereotypes can be broken by work experience placements in occupations not traditionally taken up by young women, "taster days" for pupils in primary school and the promotion of apprenticeships in occupations normally dominated by men.

8. Business has been involved with schools and universities for many years and CBI members have previously said that they recognise they have a role to play in assisting schools in developing positive attitudes to work among school children. Preliminary analysis of the 2005 CBI Employment Trends Survey (ETS) data indicates that almost three-quarters (71%) of employers provide work experience for school students and around 59% for university students. There are clear business benefits to be gained from links with education. Not only does work experience provide employers with an opportunity to gauge the future recruitment pool, come into contact with potential employees, and influence the skills and attitude of young people, but experience of the world of work can also increase staff motivation and development, as well as raising the visibility and reputation of a company in its local community.

9. While many employers have valuable links with education establishments, many also perceive significant barriers to developing these. Research from City & Guilds found a quarter of employers surveyed saying they had not found a way to make work placement schemes effective. Most of the employers surveyed want a better dialogue with the schools and colleges they support. The ETS 2005 shows that employers would like more support with costs and with creating business-education partnerships, and better guidance on child protection and health and safety requirements. Employers believe that an effective national infrastructure to co-ordinate and support partnerships would encourage business to become further involved with education, as would good practice case studies.

10. The CBI has been stepping up its work to build on effective education-business partnerships to ensure that all young people get a taste of the world of work before making their career choice. Of course activities involving schools go beyond work experience/placements, but the CBI is now focusing resources on work experience as CBI members feel that students stand to gain valuable employability skills from successful work experience.

11. The CBI is conducting research on how to make work experience a more productive experience for both student and employer. Properly structured and focused work experience can help develop employability skills in young people and give them the confidence to use them in the workplace. It can help foster a positive attitude to work and a greater business awareness. Importantly, quality work experience has the potential to enthuse young people about particular careers—and has a real role to play in redressing the gender imbalance in particular professions.

12. A central element of the project will be a series of in-depth case studies highlighting examples of good practice in companies' practical experience of delivering work experience for young people.

Case study: HSBC

HSBC supports an enormous range of projects and initiatives. In Wales, the bank provides substantial funding for programmes where lessons are delivered through fun initiatives. For example, its work with Young Enterprise gives students valuable business experience by enabling them to run their own companies while still in full-time education.

Student Investor

The HSBC School Branch initiative gives pupils the opportunity to run their own branch within schools. A network of HSBC employees provides technical and educational support but the pupils themselves make the decisions and operate the system.

Partners in Leadership

Case study: The Esh Group

Fit for Employment

120 youngsters from socially and economically deprived areas are given the opportunity each year to join the construction experience programme with the Esh group. What makes it unique is that 20 full-time jobs are on offer to those within the cohort who meet the benchmarks and show the desire to work in the group. The placements are structured in three phases.

Phase 1

Over 10 weeks in the summer term of year 10, students in groups of 12 experience a week each, where all aspects of the workplace environment are explained and they examine their own abilities in problem solving, leadership and teamworking. The students visit different parts of the workplace and develop an understanding of the job opportunities within construction. At the conclusion of this phase those students that decide that they would like to work in this sector are required to write a formal letter of application to attend the second week. Those who feel they would not like to work in construction are also required to write—giving their reasons for not continuing, which must be positive (ie to stay in full-time education).

Phase 2

The focus of the second week (during the spring term of year 11) is on making career choices within construction. This includes a computer model of a construction project—in this case, a house. The actual project has already been completed by the company, but the students have no information on how the project was put into practice. Every student is assigned a different task (for instance electrician, bricklayer, quantity surveyor, interior designer, landscaper, etc) but they must work as a team. Once they have finished this project, the company takes them out to see the show-house that an Esh Group company has actually built. The students then present their work to the board members. The application of key skills is an important ingredient. Those who now believe that they have a future in construction apply and undergo a formal interview for the specific role they hope to obtain.

Phase 3

Those who are successful now have the opportunity to work for two weeks in a part of the business of their choosing. Dependent upon their achieving satisfactory grades at GCSE, 20 of the students are then offered full-time posts with apprenticeships.

Results

13. Not only do 20 young people per year find full time employment within the Esh Group, many more are motivated to find work elsewhere within the construction sector as well as in other sectors. The percentage of young people from the full cohort entering the "Not in Employment, Education or Training" (NEET) has been dramatically reduced. GCSE attainment has shown a significant improvement resulting in an increased number deciding to stay on in full-time education. Every young person has benefited from the experience, irrespective of whether or not they have been successful in gaining a job with the Esh Group, and the Connexions Service support the remaining cohort in finding their future career opportunities. The school, the students, the families, the community and the company have all benefited from this innovative scheme.

CBI IS TAKING ACTION ON GENDER NOT ONLY AT THE DOMESTIC, BUT ALSO AT EU LEVEL

14. The EU Commission has recently published a Roadmap for equality between men and women 2006-10. Proposals include helping set up a new European institute for gender equality, reviewing all existing EU gender equality laws, increasing awareness of gender inequality, ensuring gender equality is considered in all policies and pressing for better statistics. The roadmap points to future Commission work involving a Communication on demography. This is thought to include the issue of reconciliation of family and work life such as parental leave and a Communication on the pay gap in 2007.

15. The first annual evaluation of the Framework of Actions on gender equality, developed by the social partners at EU level, took place in February 2006. The CBI met with employers' organisations to evaluate progress that has been made in promoting gender equality in the workplace. The meeting took place one year after the voluntary Framework of Actions on gender equality, agreed by UNICE and ETUC. The Framework identified priorities for action, including supporting work-life balance, addressing gender roles and tackling the gender pay gap. The CBI outlined the work UK employers have undertaken in these areas at the evaluation meeting and will contribute to the progress report in June.

Recommendation 3

16. The Sector Skills Councils should work with employers on providing and promoting Apprenticeships for women in industries where there are skills shortages. The report also recommended that the development of a comprehensive plan to tackle the segregation of jobs, into those mostly done by one gender or the other, should be part of every Sector Skills Agreement.

17. Employers are involved with the SSCs to ensure vocational education is relevant, practical, and therefore an attractive option to young people. Many companies have already opened their apprenticeship programmes to those over 25 years old and others are considering doing so. Anecdotal evidence from CBI members indicates that lifting the age brackets of apprenticeship programmes has resulted in more members of minority groups and women taking up apprenticeships.

Case Study: Women into Science and Technology

Directory of Initiatives

WiSE's directory is useful as improving the retention and returners' rate in science, engineering and technology subjects is particularly difficult due to the rapid technological changes that can occur while women are away from the labour market.

Recommendation 5

18. The Department for Education and Skills and relevant Scotland, Wales and Northern Ireland departments should ensure that teacher training emphasises the need to challenge gender stereotypes, both in delivery of careers education and in subject teaching, and that it allows for a work placement for all trainee teachers, including observing workers in non-traditional occupations.

19. The CBI supports this recommendation—employers have a role to play by getting involved with schools to tackle gender stereotypes, but the main responsibility lies with the education system and careers advice. CBI members believe that teacher placements in business would contribute to their knowledge of business and careers, a knowledge which is often lacking. Organisations such as Head Teachers in Industry, of which Digby Jones, CBI Director-General is President, organise such teacher placements in industry and vice versa for this very purpose.

Recommendation 6

20. The Department for Education and Skills and relevant Scotland, Wales and Northern Ireland departments should ensure that all young people have access to careers information, advice and guidance. National standards should confirm that it challenges gender stereotypes, gives young people a real understanding of the pay, rewards and challenges of occupations, particularly those not traditionally taken up by their gender.

21. CBI members support this recommendation and believe it is key to tackling gender occupational segregation. The CBI is continuing to lobby for clear and unbiased information, advice and guidance for young people to enable them to make informed choices when it comes to their futures. Quality careers advice will encourage young people to consider all the options available to them and not merely rely on preconception of "women's work" or "men's work".

22. A culture-shift is taken place, with more young people interested in non-traditional careers, a choice welcomed by employers: some 80% of girls and 55% of boys said that they would or might be interested in learning to do a non-traditional job:

— three-quarters (76%) of girls and six in 10 boys (59%) said that they would like to try work normally done by the opposite sex before making a final job choice;

— a quarter of boys said caring work sounded interesting or very interesting and 12% of girls were interested in construction;

— many employers also want to take on a more diverse range of recruits;

— seven in 10 employers surveyed thought atypical recruits could bring positive benefits to their business; and

— eight in 10 said a better gender mix would create a better range of skills and talents.

EMPLOYERS ARE WORKING TO MAKE NON-TRADITIONAL CAREERS ATTRACTIVE TO WOMEN

23. Obtaining a clear idea of the perceived problems which deter women from entering a particular profession is vital. In the construction sector, the Royal Institute of Chartered Surveyors (RICS) and the Royal Institute of British Architects (RIBA) have been working to better understand and resolve problems relating to the low number of women in each profession. RICS has undertaken a major review and has acted on this in a number of ways. A benchmarking tool allows employers to check their policies and assess whether they are gender neutral and female-friendly.

24. The RIBA work has resulted in action in the key areas of careers, mentors and returners:

careers

returners

mentoring

Case Study: The Royal Institute of British Architects

Why do women leave architecture?

— better dissemination of employment legislation and good practice;

— on-line returner retraining;

— mentoring and advisory/helpline support; and

— embedding of gender equality in both the curriculum and practices of architecture schools.

The architectural profession has responded with a range of programmes that offer practical help to women returners and those who wish to balance their career with family responsibilities. As well as making their promotional literature more diverse in the range of environments and people shown, the RIBA has developed practical schemes. Their new Employment Policy has two aims, first to educate architects on their statutory obligations such as the right to request flexible working for parents of young children and second to share best practice of firms where women are able to maintain a work-life balance while developing professionally.

Case Study: The Royal Institute of Chartered Surveyors

Raising the Ratio

Raising the ratio

(the representation of women within chartered surveying)

25. Nevertheless, CBI members recognise more needs to be done. Too many girls receive poor careers advice—and do not realise the pay consequences of dropping subjects such as Science and Mathematics in favour of English and History or choosing vocational courses in childcare rather than engineering or construction. Taking an Engineering degree boost earnings for women by 31%, three times more than those who study arts subjects. Employers already work with schools and careers services to encourage boys and girls to consider no job "off limits"—but further progress is essential if the pay gap is to be closed.

26. CBI members have expressed concern that young people are ill informed about their future career options. The CBI's Employment Trends Survey shows 56% of employers are dissatisfied with school leavers' knowledge about their job or career. This is a poor reflection on the current standard of careers advice. Employers expect young people to be able to make informed choices about the range of education, employment and training options available to them.

27. Careers advice must improve if young people are achieve their full potential. The CBI's response to the green paper Youth Matters, in November, argued that:

— benchmarks for Information Advice and Guidance (IAG) could help drive up standards;

— advice must be high quality and accountable against a set of key benchmarks; and

— diversity of provision is needed to secure the best quality of services for young people.

IAG BENCHMARKS COULD HELP DRIVE UP STANDARDS

28. A set of benchmarks could assist in raising quality standards by making clear the responsibilities of schools, colleges and advisers and the information they should be providing to young people. Despite there being a statutory duty for the provision of careers services and the establishment of Connexions in 2001, quality and consistency of advice has remained patchy and is not providing all young people with the advice they need. Government must ensure quality standards are adhered to and advisers are fully qualified to provide the essential information young people need to fulfil their potential.

29. The OECD has been involved in major reviews of national career guidance policies and has produced a set of benchmarks against which national careers services can be benchmarked. These benchmarks focus on providing advice at particular key transition points, development of career management skills, investigation and experience of learning and work opportunities, access to labour market information and access to individual guidance from qualified practitioners independent of particular institutions. Government should consider making these the basis of future standard guidelines against which careers guidance should be measured.

ADVICE MUST BE HIGH QUALITY AND ACCOUNTABLE AGAINST A SET OF KEY BENCHMARKS

30. The CBI has proposed four key benchmarks, inspired by the OECD guidelines which the careers service should have at their core and be held accountable to:

Guaranteed guidance at 11, 14 and 16—

Experienced and knowledgeable advisers—

Understanding the world of work—

Recent examples from Scotland and Wales suggest the best way to improve links between education and the labour market is through an all-age careers service. This should be given further consideration for England. At the very least, linkages with adult employment and training services such as JobCentre Plus must be improved so smooth transitions are made from education into employment and that guidance continues after school or college. This could help to ensure young people do not fall between the responsibilities of different services at age 19. This will also give young people a link to post-16 and 19 employment and training options.

Ensuring impartiality—

Advice should present a full range of careers to both young men and women and point out the implications of choosing certain careers. The CBI's evidence to the Women and Work Commission pointed out that 97% of those studying for apprenticeships in childcare were women whereas the number of female engineering and construction apprentices were 3% and 1% respectively. At graduate level, female engineering and technology graduates numbered just 14%. The careers service has a key role in challenging misconceptions of young people and providing good quality IAG on the options available to them.

DIVERSITY OF PROVISION IS NEEDED TO SECURE THE BEST QUALITY OF SERVICES FOR YOUNG PEOPLE

31. The CBI supports the government's proposal to "involve a wide range of organisations from the voluntary, community and private sectors in order to increase choice and secure the best outcomes" for young people. CBI members have much to contribute to the government's agenda—both in terms of imaginative solutions and cost-effective services. The CBI's view is not that the private sector has all the answers or should always be the main provider. Rather it is that as the new framework for children's and young people's services takes shape, the government should give voluntary and business organisations the opportunity to contribute to the emerging agenda and use their innovative ideas and expertise to deliver the outcomes the government seeks.

32. A market where the public, private and voluntary sectors can compete, on a level playing field, to deliver services can lead to an increase in standards. For example Central London Connexions was subject to competitive tendering and received the only grade 1 OFSTED rating for careers advice. Private sector outsourced LEAs have improved exam results at a faster rate than the national average. The transfer of services or employees from one sector to another can be a driver for improved productivity, as in the case of private prisons.

33. To ensure that local authorities commission services fairly, the government should issue clear national guidance. There is a lack of clarity in how a "high-performing" Connexions service will be judged and at what point local authorities could commission new arrangements. There has yet to be a firm indication of what new local arrangements involving schools, colleges and children's trusts may look like. The CBI is concerned that new arrangements may benefit existing providers or be provided "in-house" within schools and colleges. It needs to be made clearer how schools and colleges will be expected to buy-in services and implement quality standards. Given the evidence that where responsibility for IAG lies with schools and colleges, advice is often not impartial or provided by knowledgeable advisers, we must avoid the situation where returning responsibility to schools and colleges fails to deliver the high quality advice young people need. Schools and colleges should only opt out of local authority partnerships when there is clear evidence that present services are inadequate and they can demonstrate how they will provide improved impartial and independent guidance.

34. The CBI supports the principles contained in the draft Five Year Vision for Joint Planning and Commissioning of Children's Services, namely: the planning and commissioning function should be independent of decision making from service providers; Commissioners must follow national and EU procurement laws; and decisions must be transparent and fair. To ensure that national guidance is adhered to and implemented at a local level, the government could consider using the Change Advisors based in the Government Offices of the Regions who should be able to require evidence from local authorities that their plans for the provision of services demonstrate that they are following national guidance. The CBI welcomes the focus on accountability to agreed future standards for schools, colleges and providers and proposes these should be rigorously enforced. There is already a statutory requirement for schools to provide advice from Year 7 and current evidence shows quality and consistency is patchy.

35. One solution the government could consider is to extend the lead partner model currently used for Adult IAG services. This model limits the lead partner to providing a maximum of 39% of service provision and compels them to seek partnership with other providers from the public, voluntary and private sectors and to engage in capacity building. The government should consider trailing these arrangements where established public private partnerships have delivered successful outcomes for example outsourced LEAs such as Walsall.

36. Employers are currently waiting to hear from the DfES on how they wish to proceed following the consultation. Employers will then determine how they can work with Government to ensure young people are able to fulfil their potential, including in non-traditional roles.

37. Recommendation 9

38. Careers literature and on-line careers resources that challenge gender stereotypes should be targeted at parents and carers, who should also be invited to attend the employer visits to schools and "taster days".

39. The CBI also supports this recommendation: careers literature and on-line careers resources should challenge gender stereotypes should be targeted at parents and carers, who should also be invited to attend the employer visits to schools and "taster days". Employers welcome not only pupils, but also teachers and parents to activities, and many are in contact with the parent(s) of young people on work experience placements.

40. Recommendation 11

41. The DTI should establish a UK-wide Quality Part-Time Work Change Initiative of £5 million to support new initiatives aimed at achieving a culture change, so that more senior jobs—particularly in the skilled occupations and the professions—are more open to part-time and flexible working. This should start from junior management level upwards, and include the roles considered "stepping stones" to senior management. Eligible projects might be:

— identifying senior role models, working part time or job sharing, who will champion the spread of best practice among managers;

— web-based job matching of those wanting to work part time with those offering quality jobs on a part-time or job share basis;

— job share services to put potential job share partners in touch and aimed at high quality occupations;

— specialist consultancy services to embed quality part-time work;

— e-networks for senior and professional women; and

— other initiatives to spread best practice and achieve culture change.

42. Employers are taking practical steps to help women break through the "glass ceiling", so that there are more women in senior positions. Schemes such as "Women Directors on Boards" use mentoring to encourage women to aim for the top level in their careers. And employers have a good record of providing flexible working opportunities that suit the needs of women with caring responsibilities. Ninety percent of employers now offer at least one form of flexible working.

43. Occupational segregation and the glass ceiling are both influenced by the work and career choices that women make. Research into the career choices made by "high flying" professional men and women suggests that men prioritise promotional prospects and salary while female executives are more likely to prioritise quality of life factors such as family and personal needs. And women returning to the labour market after a period of absence (typically to start a family) often look for employment close to their homes as this allows them to balance their work with childcare or other family-related responsibilities. Jobs in residential areas tend to be in the retail, education and health sectors which are lower paid than the average.

44. Employers in the UK also have a good record of providing flexible employment opportunities. These can be of particular benefit to women with caring responsibilities. Ninety per cent of employers now offer at least one form of flexible working, with part-time work, flexitime and job-sharing the most popular. Employers' willingness to embrace flexible forms of work have contributed to the high participation rates of women in the labour market. The right to request flexible working introduced in 2003 with CBI support is working well—90% of requests have been granted and at the same time it is clear that employers have the right to say "no" if they cannot accommodate a request.

45. The numbers of women in senior positions is increasing—only 8% of all managers were women in 1990 but in 2003 nearly one third (30%) of managers were female. Eleven per cent of all directors were women in 2003, a large rise from the 2% figure in 1990. [10]

46. Employers recognise the advantages that can be gained from increasing the number of women at board level and there are currently a number of schemes that are dedicated to achieving this. The driver for these schemes is often the market itself, particularly in "client-facing" sectors where customers are looking for providers of professional services to reflect their own or their customers' profile.

47. Innovative schemes which have combined mentoring programmes with top-level backing for greater female involvement in business at the highest level are delivering results. The Department of Trade and Industry (DTI)-commissioned 2003 Female FTSE Index, a study by academics at Cranfield University found that, for the first time, more than 100 directorships on FTSE 100 boards were filled by women, representing a 20% increase on the previous year and a "milestone" for female business leaders. [11]This is part of an increased appetite for more diverse boards that has been spurred on by the Tyson and Higgs reports, both of which looked at the role of non-executive directors and both of which recommended that more diverse boards would be of benefit to companies. [12]

48. Research clearly demonstrates that although being female is not in itself an obstacle to being appointed as a non-executive director (NED), other issues can pose particular difficulties for female candidates. Getting more women noticed by board appointees and headhunters requires commitment from companies who may not realise that they are implicitly limiting their talent pool by relying on "safe" candidates. When there is a high supply of strong candidates from a traditional, male-dominated business background, there is not always the incentive to look beyond this field.

49. The work of Moloney Search, a recruitment agency specialising in board-level appointments, has been informed by a survey of 1000 "high-flying women" aged 35-45 which identified the following barriers to female appointments to boards:

— not being on anyone's "radar screen" (cited by 52% of respondents);

— haven't yet held a NED (15%);

— not yet being at Group Board level (14%);

— not having broad enough experience (9%);

— being too young (8%); and

— being female (2%).

The will to increase the number of women in senior business roles is there and some women are willing candidates, but many companies do not know where to begin when seeking a diverse range of candidates.

Case Study: Moloney Search

Moloney Search set up "Diverse Board Appointments" in July 2004 to meet the growing demand for a diverse range of candidates at board level. They specialise in tracking the careers of talented women and ensuring that they are considered for board-level appointments later in their career. Their clients, companies looking for shortlists of people who will add value to the corporate governance of the organisation, know that Moloney Search will provide them with a range of candidates which includes talented women and goes beyond the "safe" list of established names that, although full of well-qualified people, may tend towards a self-perpetuating and somewhat closed pool of talent. The creation of Diverse Board Appointments demonstrates that demand exists from companies to increase the number of women at senior levels.

50. The Women Directors on Boards (WDoB) scheme, which was set up in October 2004 by a consortium of FTSE 100 companies, relies on mentoring and the effective use of positive role models as two of the most effective ways of encouraging people from under-represented groups in any walk of life to consider careers for which they are well-qualified. WDoB has had considerable success in raising awareness of the effectiveness of mentoring and the doors it can open for female business people.

Case Study: Women Directors on Boards

The Women Directors on Boards (WDoB)

51. CBI will be working with DTI to identify role models and champion best practice. In the meantime, CBI will be publishing a guide on flexible working including a legal summary and good practice case studies. The report, Striking a Work-Life Balance, identifies some key lessons learnt from the case studies' experiences and promotes all forms of flexible working including:

— flexible time, covering all sorts of non-standard hours arrangements—flexi-time, part-time, term-time, job sharing, compressed hours and annualised hours and many other arrangements;

— flexible location, covering working from home, working on the move and working from telecentres and satellite offices; and

— flexible contracts, covering practices such as outsourcing, use of agency workers, temporary or fixed term and casual labour.

52. All the case studies of companies, large and small and in different sectors, show that flexible working embraces a wide variety of employment policies. In practice, these are combined in differing ways at different companies to meet particular demands. The challenge for all companies is to provide as much flexibility as possible without losing operational efficiency.

Case Study: NEC Group

The NEC Group organises exhibitions, conferences, concerts, sporting championships and entertainment events at five venues. These are the NEC and the NEC Arena, located just south of Birmingham, as well as the ICC, the NIA and the Symphony Hall in Birmingham city centre. The company employs approximately 1,000 permanent and fixed-term staff, and can use up to 3,000 additional casual workers over a 12-month period to cover peak times.

Changing business demands suit a flexible working policy

For the NEC Group, the peaks and troughs in demand for its exhibition and other events are a regular and important feature of the business. A flexible workforce is therefore essential to ensure that the NEC Group can meet business demands. Many of its flexible working practices are driven by the employer rather than the employee. Other considerations also come into play as NEC Group wants to be considered an employer of choice and sees flexible working, and facilitating flexible working, as a means of recruiting and retaining key skills.

Flexible working benefits permanent and fixed-term staff

There are 10 types of working pattern. This includes annualised hours for operational departments, reflecting the need for flexible working hours to meet the large peaks in demand. Flexible working patterns also include part-time working, job sharing and some home working. These work patterns are largely driven by employee demand. How these work patterns and requests to work them operate is contained in the company's work-life balance policy. This covers maternity leave, paternity leave, parental leave, dependant's leave, adoption leave, flexible working, home working and the provision of childcare facilities.

Company policy permits home working for some but not all of the time, reflecting the view that some parts of the job may be successfully completed at home. NEC does not require employees to attend their normal place of work for all of their contractual working day or week. Home working also requires the prior authorisation of the applicant's manager.

The provision of childcare facilities is seen by the company as underpinning its work-life balance policy. The nursery is run in conjunction with an external supplier and provides 35 places, with 20 reserved for NEC Group employees. Places are allocated on a first come, first served basis, with employees paying a lower rate than other users of the nursery.

The NEC Group is now seeking to combine these flexible practices and policies with further development of its health and well being policies for its staff, such as improved private healthcare arrangements, health surveillance, healthy eating and a healthy lifestyle.

A more balanced workforce, a better work-life balance

The work-life balance policy (reflecting in part the statutory requirements) has led to an increase in the number of employees, mainly women, working part-time. The return rate from maternity leave has also increased, particularly in senior positions, and this has provided useful role models for many women in the NEC Group. Allowing women to return part-time after maternity leave has meant they can retain their position on the career ladder—and that their experience and enthusiasm is not lost to the company. The extensive use of flexible working gives HR a crucial role in providing specialist advice, but the NEC Group believes that requests by employees for flexible working should never be considered in isolation—the impact on the business and client companies must also be taken into account.

Recommendation 16

53. The right to request flexible working should be extended over time to cover a wider group of employees.

54. The CBI has worked with government on the flexible working agenda and the rights of parents of young children to request flexible working has been a success. CBI members support flexible working practices where they are compatible with business needs and the right to request has been successful to date in helping employees to balance their work and family lives without imposing undue burdens on employers.

55. Three years after the right was introduced, employers have accepted the vast majority of requests. The CBI Employment Trends Survey 2005 indicates that requests were fully accepted in three-quarters of cases (55% formally and 20% informally) and a compromise reached in a further 15% of cases. Just one in ten requests was refused. These acceptance rates are virtually unchanged since 2004, when 77% of requests were fully accepted, 16% resulted in a compromise and 8% declined.

56. Crucially, the success of the right is due to the way it balances employers' and employees' needs. Employers are willing to give requests due consideration and to accommodate flexible working where practical, but they must be able to decide whether accepting a request would damage the business or impose excessive burdens on other employees. The fact that employees may only make one request per year, and that any change is permanent, means that employees must give sufficient thought to their request and the impact it will have on their work. In light of the success of this new right, CBI members welcome the Government's commitment not to change the structure of the right.

57. Employers are, however, now more likely to report a negative impact of the right to request flexible working. Just because the right has been successful for parents with young children does not necessarily mean that this success will be mirrored when eligibility is extended to further groups of employees, given that employers are likely to be faced with significantly different types of requests.

58. The CBI Employment Trends Survey indicated that, in 2004, a year after the introduction of the right, most firms (62%) reported that it was having no impact on their organisation. In 2005, this had fallen to 52%. The proportion reporting a negative impact has risen from 11% to 26%, while the number reporting a positive impact has fallen from 25% to 21%. These figures suggest it is becoming more difficult for employers to accommodate requests to work flexibly and show that the Government must be cautious in extending the right to new groups of employees. The increased negative impact may also indicate that employers were able to accommodate requests more easily when there were fewer people working flexibly. For some companies, there is a limit to the amount of flexibility they can offer meaning that the requests employers receive in the future may be more difficult to accept. But the fact that acceptance rates are so high shows that employers are still willing to accommodate requests, even if they prove challenging.

59. Given the success of the right to request to date, employers accept a gradual extension of the right to those with caring responsibilities. As was made clear in our recent response to the DTI's consultation on the draft flexible working amendment regulations, CBI members feel very strongly that the Government should only extend it to one group of employees at a time. This will avoid a large and sudden increase in the number of requests which may lead to capacity difficulties and allow employers time to get used to accommodating the needs of carers which are likely to be very different to those with children under six.

60. Extending the right to further groups of employees, beyond parents of young children and carers, in the future would be acceptable and welcomed by the CBI if this approach proves successful.

Case study: BUPA

BUPA's vision is to take care of the lives in the company's hands. BUPA is commited to ensuring that all its stakeholders are respected and treated responsibly. Implicit in this is that everyone at BUPA is valued equally and appreciated for the unique contribution they make to the business.

Work/Life Balance and flexible working

Work/Life Balance and flexible working arrangements are a high priority for BUPA UK Membership. The traditional nine to five rigid working pattern is becoming less relevant to employees within the demands of a 24 hour culture. Work/Life Balance and flexible working arrangements help the business to provide a practical demonstration of the BUPA Vision by enabling employees to balance their work life with their home life commitments.

Work/life balance in BUPA is about people gaining control of when and where they work, helping them to improve general wellbeing. It is about finding a balance between personal needs, responsibilities and desires, and the needs and responsibilities of work—to the mutual benefit of both individual and employer. This programme exceeds flexible working legislation requirements. It offers a suite of flexible working options which respond to individual circumstances, including part time, job sharing, compressed hours, homeworking, term time working, flexitime and flexible hours.

BUPA UK Membership won a Personnel Today Award in 2001 for its approach to flexible working. It is cited as a differentiator in attracting people to work for the business, particularly in BUPA's call centre environments, and BUPA has seen ongoing improvement in employee satisfaction scores over the last few years. The company won a place in the 2005 Sunday Times Top 100 Best Companies and feedback included data and comments from staff specifically about their appreciation of the work-life balance opportunities available to them.

Recommendation 17

61. Employers should ensure that their managers, at all levels, are regularly and continually trained on diversity and flexibility issues.

62. The CBI encourages its members to take action on diversity, there are clear business benefits. There are many ways of achieving equality and diversity, diversity training, mentoring programmes and involvement with schools. Companies are able to judge which approach is most appropriate, taking into account factors such as the location and size of the company. While the CBI generally encourages its members to provide diversity training where this is judged appropriate, decisions as to what type of training, if any, should be provided are taken by individual employers. However, anecdotal evidence indicates that diversity training is becoming a widespread phenomenon across the private sector.

Recommendation 20

63. Acas and the Northern Ireland Labour Relations Agency should be funded to develop a training package to support flexible working and that this package be delivered free to small firms.

64. The CBI is exploring with SME members whether a training package is the appropriate way of responding to this issue. Evidence suggests that new firms are reluctant to take on their first employee. While the number of businesses in the UK has risen over recent years, the number of small employers has remained relatively constant. Ways must be explored that enable firms to take on their first employee—whether that is a part-time/flexible worker or not.

Recommendation 22

65. A £20 million package to pilot measures designed to enable women to change direction, and progress in their jobs and careers, through raising their skill levels. It should be led by the Department for Education and Skills and relevant Scotland, Wales and Northern Ireland departments and the Department for Work and Pensions.

Women who are not in work who already have a Level 2 qualification should be entitled to free skills coaching, under the New Deal for Skills, and additional help to gain employment and training in an area of skills shortage.

Train to Gain, through the network of skills brokers, should be particularly focused on employers and sectors employing the greatest numbers of low-skilled women, particularly those from ethnic minorities.

Women should have access to a high-quality careers information, advice and guidance service which tackles gender stereotypes under the New Deal for Skills and Train to Gain, which provides support in work and may include additional training.

Free Level 3 training (free for the individual, match-funded by the employer) under Train to Gain should be piloted with employers from the five "c" sectors, particularly those employing part-time workers.

Further pilots for Adult Apprenticeships or Train to Gain in areas of skills shortage should be introduced and focused on women returners.

66. Employers welcome this recommendation. If training to lead to employment, it is imperative that newly acquired skills are in demand in the labour market. Training must be accompanied by high quality, non-biased careers advice, for which the CBI has been lobbying for a long time (see Recommendation 6 for further information).

67. The most effective strategies to close the skills gap and thus raise participation rates among disadvantaged groups such as women, older workers and ethnic minorities are those that work with the grain of employer need. The CBI supported the National Employer Training Pilots (NETPs) which provided free work related training in the workplace in a flexible manner. The National Employment Training Programme "Train to Gain" was rolled out in April and builds on the success of the NETPs.

68. The initial programme delivered real success in raising the basic and intermediate skills of low-skilled employees—women have been particular beneficiaries of this initiative—but also ethnic minorities. To date, around 100,000 learners have been involved in the pilots and the evaluation reports indicate that the majority of participants are women. The typical learner is a middle-aged woman who left school by 16 and is working full-time in a low-skill occupation such as a care assistant or machine operator. Improving the skills and therefore the career prospects of these women is vital to reducing the large number of low earning women and the gender pay gap. Ethnic minority adults have also been particular beneficiaries of the National Employer Training Pilots—12% of employees who have received training are from ethnic minority groups.

69. CBI members welcomed the piloting of the Train to Gain approach to level 3 training. The focus of Train to Gain on the hard-to-reach is welcome. The extra funding of £10 million in each of the next two years for Level 3 training, particularly focused on ethnic minority women, is a welcome step.

70. Employers also support the Adult Apprenticeship pilots. Making the most of employees and attracting new workers is vital to the competitiveness of UK firms. At the CBI Age Conference in June, spreading good practice on age diversity, many employers reported that they have already opened their apprenticeship schemes to older worker or were considering doing so.

Recommendation 23

71. The Skills Alliance Delivery Group, which has an overview of skills activity including that related to the London 2012 Olympic Games, should ensure that reducing the gender segregation of jobs is part of plans for tackling skills shortages in the relevant sectors, such as construction.

72. The Equal Opportunities Commission completed a two-year investigation in March 2005 looking at why women and men continue to work in traditional jobs and why young people choose Apprenticeships and other vocational training in traditional sectors. The Investigation focused on five sectors where there are currently skills shortages and an imbalance in the concentration of women and men; Construction, Childcare, Engineering, Plumbing, ICT. The investigation found that Britain is failing to provide real opportunity and choice for young people entering training and work, with girls from lower socio-economic groups losing out the most. The SSCs in the relevant sectors are rightly focusing on this key issue.

73. There is a view to taking this forward and producing a document on the business case for tackling occupational segregation. This will also fulfil our role as social partners on the EU-level.

Recommendation 24

74. The Department for Education and Skills, DTI, Department for Work and Pensions and relevant Scotland, Wales and Northern Ireland departments should develop programmes, linking with Train to Gain and the Sector Skills Councils, identifying best practice on career development and working with partner employers to create career paths. The programme should consider how best to:

recruit and retain women into nontraditional jobs; and

develop career paths for those working part time.

75. The SSCs could play a useful role with respect to career development and career paths. The CBI understands from the SSDA that they are currently developing detailed labour market analyses on a sectoral basis. The SSDA has received £10 million to reengage women into sectors in which they are under-represented sectors, sectors which are also suffering from skills gaps. Various SSCs are pioneering innovative ways to do this.

Recommendation 26

76. All organisations promoting entrepreneurship to women should promote, as a key benefit, the work-life balance and flexible working possibilities of running your own business.

77. Employers are involved promoting entrepreneurship and enterprise skills at all levels—both at school and in the workplace. Increasingly girls are outperforming boys throughout education. The increasing emphasis on work related learning in the curriculum is offering employers opportunities to inspire young women. Events like "Entreprise Week", run by Enterprise Insight which the CBI co-founded, have proved successful in engaging and inspiring people across the age spectrum—both in the classroom and the workplace.

Case study: Shell

Live

78. The government has set itself a target to "reduce the gap between male and female self-employment rates". To achieve this it has taken numerous steps, including developing a Strategic Framework for Women's Enterprise. It has also set up a Task Force on Women's Enterprise, working with the Regional Development Agencies, who have made a commitment to developing women's enterprise within their regional economic strategies.

79. As the CBI report Boosting Enterprise Across the Population, published in May, set out, there is some evidence that female entrepreneurship levels have increased over the past few years: 4% of women are now self-employed compared to 3.6% in 2000. The Global Entrepreneurship Monitor also shows that over the next three years 6.4% of women expect to start a business. This has increased from 5.1% two years ago. However, it is still apparent that nearly twice as many men than women expect to start a business.

80. It is also important to put this into perspective. While female self-employment has increased, it has increased at a much slower rate than the male self-employment rate. In fact the percentage of self-employed people who are female has actually fallen from 27.8% in 2000 to 26.6%. The gap between male and female self-employment has therefore widened.

81. While promoting the benefits of work life balance and flexible working are important, driving up female entrepreneurship levels requires the dismantling of other key barriers and the development of high quality support. A 2005 study by Association for Chartered and Certified Accountants, Access to finance: women's enterprise and the role of the accountant, showed that self-employed women at start-up spend less time engaged in activity related to acquiring finance, start businesses with lower investment and are more likely to use credit card debt as a source of start-up capital. The government must work to ensure that potential female entrepreneurs have access to proper information on different types of finance.

82. The problem is not just that fewer women and ethnic minorities start-up a business, but that a significant number of these businesses fail or do not grow significantly. Global Entrepreneurship Monitor 2005 shows that not only do women entrepreneurs have a lower turnover in their first year of trading, they forecast much lower growth for the next three years than men.

83. While it is therefore right to encourage more start-ups, it is important that these new businesses are encouraged to thrive and grow. The evidence clearly shows that those entrepreneurs who are supported by their peers are more successful. A number of Business Links have recognised this, and are developing women's networks for example. However, much more in this area could be done, particularly in developing mentoring schemes, particularly by the Regional Development Agencies.

Recommendation 30

84. Private sector companies should consider the implications of this report for how they operate in order to make the most difference to the most women. A cross-government UK-wide package of measures should support awareness raising and capacity building to enable organisations to adopt solutions most relevant to them, which will have the most impact on women's pay and opportunity, including:

promotion of best practice via business links and the business.gov website;

£1 million funding for Investors in People (IiP). This should be used to support the adoption of the IiP Standard by small firms focusing on those growing rapidly, and to market to all firms—particularly in the five "c" sectors—the IiP Profile, in order to spread best practice on equality and diversity, fair pay and reward, and training;

supporting employee involvement in workplace equality development via £5 million additional funding for the Union Modernisation Fund for capacity building to support training and development for equality reps in the private and public sectors; and

support for the development and marketing of equality checks.

85. The CBI is playing its part in raising awareness among employers of gender diversity issues and spreading good practice. The CBI runs an Equality and Diversity Forum three times a year. CBI members on the forum provide a steer to CBI lobbying and exchange good practice. The recommendations of the WAWC were discussed with the Forum, as well as with other relevant committees. Awareness was also raised through e-bulletins and regular publications.

86. The CBI also organises and participates in events aimed at spreading good practice. For instance, the CBI Director-General, Sir Digby Jones, spoke in February at the Ford Diversity Conference.The Conference included a well-received session on incerasing the representation of women in male-dominated industries. Sir Digby stressed in his speech that it is through enabling employers to learn from each other and raising understanding of what has worked that we can further improve the work that has already been achieved on this crucial issue.

87. The CBI believes the Small Firms Initiative (SFI) should be extended. This programme had developed in response to CBI lobbying and offered financial support to help smaller businesses assess their training needs and link training with their overall business strategy. SFI was aimed at very small firms (five to 49 employees) and ran from 2002-06, offering up to £1,250 worth of advice and support in the form of an initial skills needs analysis, business development plan and brokered training arrangement. The evaluation showed that almost half (46%) of the firms reported improved productivity, that the culture of the organisations was changed in favour of training and communication—linked firmly to business strategy. All this was accomplished with very little "deadweight"—only 6% of the firms would have gone ahead with IiP involvement anyway. The CBI recommends the expansion of this initiative—and other schemes to encourage more small firms to access the benefits of the IiP framework and standard.

88. However, while the CBI supports the IiP standard, care must not be taken to flood the market with standards and checks. This would be confusing to employers and could undermine the effectiveness of existing standards and checks. Employers prefer few standards, which are clear and add value.

Recommendation 31

89. DTI, through partners such as Opportunity Now, should build a set of exemplar companies willing to pilot projects such as:

a new offer to schools to give girls work experience, in particular in non-traditional jobs;

setting up a new women's network in senior or traditionally male jobs within the company;

actively promoting quality part-time jobs;

a recruitment round which supports women returners' development needs including confidence building and other support mechanisms;

developing career pathways for women working in lower-paid jobs;

providing paid time off, support and facilities to a network of equality reps; and

undertaking an equal pay review.

90. The CBI supports the work of Opportunity Now and has been in discussions with them on how best to take forward our joint commitment to best practice exchange. On equal pay reviews CBI evidence indicates that employers are well on the way to achieving the target that was set for the number of voluntary pay reviews. The CBI Employment Trends Survey 2005 shows that 44% of large organisations have or are planning to conduct an equal pay review—well on the way to meeting the government's target of 45% by 2008. Many employers already undertake equal pay reviews and still more are active in tackling the causes of the pay gap but choose not to undertake a formal equal pay review but to, for example, set up networks for women in senior positions.

91. Employers typically undertake a review where they believe they have a problem or where it is part of a good practice review of gender issues. Typically, where firms did find a pay gap, this was because there were more men than women in senior positions within the company.

Recommendation 35

92. The Equal Opportunities Commission or Commission for Equality and Human Rights, with support from DTI, the Office of Government Commerce, the Scottish Executive Procurement Directorate and other interested stakeholders, should develop practical, equalities-led procurement advice which actively encourages public sector procuring authorities to promote good practice in diversity and equal pay matters among contractors so that it becomes the norm.

Public authorities should ensure that their contractors promote gender equality in line with the public sector Gender Duty, and equal pay in line with current legislation. This intention should be flagged up in contract documents to ensure that it is built into contractors' plans and bids.

Government should appoint a ministerial champion of procurement as a means of spreading best practice in diversity and equal pay matters.

— Private sector companies who engage in substantial procurement should also use procurement to spread best practice.

93. The CBI supports this recommendation—public procurement, if effectively used, could be a lever for further achieving equality and diversity in the private sector. This offers a real alternative to the imposition of further regulatory burdens. Working in partnership with business through demonstration of a clear business case is an effective strategy for ensuring business buy-in to the continuing drive to promote equality.

94. As the race duty is the only one in force at the moment, the CBI has been focussing mainly on racial equality in public procurement. Lessons should be learned from this experience to ensure the forthcoming gender and disability duties are more effective. The CBI and the Commission for Racial Equality (CRE) jointly chaired a stakeholder meeting in November 2005 to identify ways to achieve this goal, following on from a joint publication in 2003, Public procurement and race equality: Briefing for suppliers. This brief has sought to provide clarity for private sector employers on how they can work within a public procurement framework and work in partnership with public and private employers to develop good practice on equality of opportunity where possible. Firms undertaking work for the public sector should enter into an "early and ongoing dialogue with public authorities" in order to reach a common understanding of what might be achievable in all areas. The CBI is now exploring ways to increase the use of procurement to increase diversity in partnership with the CRE.

95. The public sector has considerable spending power—NAO statistics for 2003 show that government has an annual expenditure of £109 billion, including £42 billion spent by local authorities alone. The recent National Employment Panel publication Enterprising People, Enterprising Places suggested that there is "little systematic use of public purchasing power to promote good practice in race equality or supplier diversity for ethnic minorities". The CBI believes that procurement could be a highly effective tool for encouraging equality as long as "value for money" remains the basis for awarding contracts.

96. The new CBI report Working together: Embedding good employment in public services urges public service employers to support the recent WWC recommendations in supporting equality through procurement. Public bodies working in partnership with employers through demonstration of a clear business case for diversity is an effective strategy for ensuring more business buy-in to the continuing drive to promote equality. The CBI's contribution to the WWC stressed that if any obligations around equal pay were to be imposed on contractors they must be sufficiently precise to be fully understood and that the actual award of the contract must remain on the basis of value for money

97. There remains significant room for improvement in the application of public sector equality criterion to competitive tendering processes by public sector procurement officials. Furthermore, while larger companies may be able to include rigorous equality criteria in their procurement, this will be difficult for SMEs, who make up 99.9% of employers in the UK and are unlikely to have specialised HR departments.

98. Government will need to take steps to improve the capabilities of procurement officials if they are to make the sophisticated qualitative judgements needed to consider qualitative criteria effectively. Equality criteria should be a vehicle for improving outcomes and fostering innovation, not a tick-box process. CBI members have reported that inconsistent application of procurement criteria is creating confusion among private sector contractors bidding for public sector contracts. For example, contractors are unsure as to whether and how "race equality" criteria will be factored into the tendering process and some local authorities adopt a "lowest cost" mentality when awarding contracts. Companies that have gone to great lengths to make equality a central part of their bid then lose out on the basis of cost alone. The CBI believes that greater clarity is needed for public bodies on the use of procurement to promote equal opportunities for without a level playing field, businesses will not be compelled to enter the bidding process. [14]

99. The Race Relations (Amendment) Act, which gave public authorities a duty to promote race equality in carrying out all their functions, has indirectly affected thousands of private sector employers as a result of the public procurement process. The increase in public-private partnerships and private finance initiatives has presented both challenges and opportunities for all employers. It is vital that business is able to contribute to the promotion of equality of opportunity but it needs to be clear about the equality requirements that are to be factored into a bid. The new EU Consolidated Public Procurement Directive, which came into force in UK law in April 2006, makes clear that capacity and ability to meet social criteria can be considered at selection stage. However actual award of contracts must be based on value for money.

100. The CBI has also been working closely with the Discrimination Law Review (DLR) team. Public procurement was discussed by the Discrimination Law Review Business Group, consisting of CBI members and DLR staff, in October and January. Following on from these meetings and the recommendations of the WWC report, the CBI organised a successful meeting in May to allow the DLR team to learn from good practice in procurement in the private sector. The CBI is planning a conference in the autumn which will address how clients and contractors can work together to take account of the impact of equality and diversity considerations on service design.

Case study: BT

BT is committed to creating a diverse supply chain. The company created a strategy for Supplier Diversity in 2004 and is implementing changes in policy and practice in supply chain diversity.

BT believes that over the last two years the business case for Supplier Diversity has become significantly more persuasive. Local Government and central government ITT have become more detailed; the Supplier Diversity East Midlands initiative has received significant private and public sector support; the evolution of arguments about sustainable development are becoming more sophisticated (local labour force contracting); the development of the European Supplier Diversity initiative supported by large multinationals and the investment banking sector; the Institute of Purchasing and Supply has begun work on this area; the National Employment Panel initiative with JobCentre Plus is about to report on ways forward on Supplier Diversity—the working through of the RRA public duty is having an effect on procurement and we expect it to increase with the extension of the public duty across the disability and gender strands. Diversity Works for London is also developing thought leadership in this area whilst the Haringey Council has developed on the ground expertise. By 2003 BT had agreed with 55 of its suppliers that they would work towards the Sourcing with Human Dignity standard. In 2004 BT removed a minimum contract value condition of £250,000 so that more companies are now bidding for BT contracts, thereby working to Sourcing with Human Dignity standards.

During 2004 BT worked with 10 leading businesses and the Migration Policy Group to develop a European wide Supplier Diversity Initiative, of which the first phase will be piloted in the new financial year. Over the next two years BT will raise the standards its own programme and provide leadership to the European Supplier Diversity Initiative. BT wishes to develop a debate and discussion among stakeholders about supplier diversity and the reality of diversifying the supply chain and is holding a number of showcases to this end. The first one of which was held in March 2005 and sought to engage a wide range of stakeholders and suppliers in starting to think about the future and supplier diversity in its various guises.

BT believes it is still early days for many large companies in terms of understanding the market potential of supplier diversity and feels the company's job, as change agents at the centre, is to develop and enhance the debate and come to a creative and agreed way forward.

Recommendation 36

101. Current guidance to the equal pay questionnaire should be altered to make it clear that the Data Protection Act does not prevent the provision of pay information, in order to encourage employers to respond without the need for the employee to apply to a tribunal.

102. The CBI believes that this recommendation would result in a helpful clarification. Many employers see the business case for taking action on equality and diversity within their organisations, but confusion about legal requirements and fear of breaking the law hampers their efforts. Clarity, in combination with guidance and assistance from the future Commission for Equality and Human Rights, play a key role in further achieving equality and diversity in the private sector.

Recommendation 37

103. The Discrimination Law Review should consider more fully the issues of whether or not to extend the hypothetical comparator to equal pay claims, and of generic or representative equal pay claims.

104. The CBI is not convinced that equal pay legislation should be extended in the way suggested by this recommendation, and awaits a further exploration of the advantages and disadvantages of such an approach by the Discrimination Law Review.

June 2006

1 Good Practice in Promoting Diversity in Apprenticeships, Apprenticeship Task Force, 2004. Back

2 Gender and Innovation: Promoting Science, Engineering and Technology for Women, Warwick Institute for Employment Research at University of Warwick/DTI, 2004. Back

3 Directory of Initiatives 2004, WiSE, London, 2004. Back

4 Why do women leave architecture?, de Graft-Johnson, A, Manley, S and Greed, C, University of the West of England, 2003. Back

5 Architects' Employment and Earnings 2002 Mirza and Nacey Research, RIBA Journal, 2002 (quoted in Why do women leave architecture? p 1). Back

6 Raising the ratio: the surveying profession as a career. Survey results summary, Ellison, L, Kingston University, Royal Institute of Chartered Surveyors (RICS), 2003. p 1. Back

7 Raising the ratio: the surveying profession as a career. A report from the RICS Raising the Ratio Committee, Ellison, L, Kingston University, RICS, 2003. p 22. Back

8 End to End Review of Careers Education and Guidance, DFES 2005. Back

9 Connor and Little, Vocational Ladders or Crazy Paving?, 2005. Back

10 National Management Salary Survey, Chartered Management Institute/Remuneration Economics, 2003. Back

11 The 2003 Female FTSE Index, Singh, V, and Vinnicombe, S, Cranfield, 2003. Back