The Supply Chain Sustainability School
The new Single Equalities Bill and how it impacts procurement
Article written by Shaun McCarthy, Director of Action Sustainability and Chair of the Commission for a Sustainable London 2012
The UK has a raft of legislation which has developed progressively over the past 40 years to tackle discrimination in various forms. Not only has this created a confusing legal landscape but, more importantly, there is evidence that this legislation is simply not working. Discrimination remains a significant problem and people from some disadvantaged groups still find it harder to find employment. Evidence shows that:
Despite progress since 1997 to reduce the gender pay gap, women still earn, on average, 22.6% less per hour than men. If the current trend continues, the pay gap between men and women will not close until 2085.
The gap between the employment rate of disabled people and the overall employment rate has decreased from 34.5% to 26.3% since 1998, but disabled people are still more than twice as likely to be out of work as non-disabled people.
Ethnic minorities were 17.9% less likely to find work in 1997. The difference is still 13%.
The new single equality bill helps tackle these issues by bringing together a number of requirements under a single act. It is intended to strengthen the current legislation by:
introducing a new public sector duty to consider reducing socioeconomic inequalities;
putting a new Equality Duty on public bodies;
using public procurement to improve equality;
introducing gender pay and equality reports;
extending the scope to use positive action;
banning age discrimination outside the workplace;
strengthening the powers of employment tribunals;
protecting carers from discrimination;
protecting breastfeeding mothers;
banning discrimination in private members' clubs; and
strengthening protection from discrimination for disabled people.
There will be a specific requirement for public bodies to promote equalities and diversity through their procurement. There are already some examples of good practice in this area from Transport for London and the London 2012 project, both of whom expect their suppliers to have diversity action plans to support their work for the client. LOCOG, the Olympic Games operator, requires all suppliers to take part in the
Diversity Works for London scheme
In future, public purchasers will be able to insist their suppliers take positive action to address inequalities in their workforce and supply chain. For example, in the construction industry, where there are traditionally fewer female employees, specific action can be taken to provide training in order to upskill an under-represented group to provide the appropriate skills.
It is early days for this new legislation in terms of the impact it may have on businesses but it could be profound. Businesses will need to move away from a passive "equal opportunities" approach to a more pro-active strategy for equalities. For example, organisations may be required to regularly review gender pay differences and publish the results, and in terms of the supply chain suppliers may be required to have pro-active strategies to deal with diversity. The pre-qualification process may need to reflect this, and organisations may be required to work with long term suppliers to help improve their approach to diversity, using schemes like Diversity Works for London.
Although the legislation is new, this type of approach is not new for many companies. In 2000, I instigated BAA's action to target minority businesses around Heathrow to participate in the supply chain. There was no question of positive discrimination; suppliers had to be competitive to win business. The subsequent significant increase in diverse suppliers winning business represents a more competitive supply chain, saving costs.
It is important to create the right organisational culture where people are prepared to be open about their minority status. People are usually willing to declare their ethnic origin but fewer are prepared to declare themselves as disabled or to be Lesbian, Gay, Bisexual or Transgendered (LBGT). Managements must create an environment where people can declare their minority status without fear of discrimination.
For businesses, failure to be positive about minorities is to miss an opportunity to attract talented people or competitive suppliers. This legislation should not be seen as a burden; good businesses should embrace it as a reason to increase the relentless search for talent and competitive suppliers.
To download the latest version of the Equalities Bill
To read a press release about the Equalities Bill
Procurement and supplier diversity in the 2012 Olympics
Buying from SMEs key to local economic stimulation
Fair treatment of suppliers is key to surviving the recession
Top 50 companies for supplier diversity
Inquiry into race in the construction industry
Apprenticeship boost for Londoners
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