Equality Duty Revised Draft Regulations Analysis of Consultation Findings

SECTION 4: FINDINGS - PROPOSALS RELATING TO PUBLIC PROCUREMENT

4.1 This section deals with the findings on proposals relating to public procurement (covered in Regulation 9). The revised proposals involve specific procurement duties to make clear when and how a contracting authority should have due regard to the General Duty.

Award criteria

4.2 Question 10 asked:

"Do you agree that where a listed authority is a contracting authority and proposes to enter into a relevant agreement on the basis of an offer which is the most economically advantageous it must have due regard to whether the award criteria should include considerations relevant to its performance of the General Duty?"

Table 11. Responses to yes/no/don't know element of Question 10

Response	Respondents	% of all respondents	% of respondents addressing y/n/dk
Yes	109	78	85
No	9	6	7
Don't know	10	7	8
Not answered	12	9
Total	140

4.3 This question was addressed by 131 respondents (94%) and almost all of these (128) addressed the "yes", "no" or "don't know" element. There was a high level of agreement both among respondents covered by the Regulations and those not covered, with 85% of those who addressed this element stating "yes". A total of 7% stated "no" and 8% answered "don't know". Around three quarters of those who stated "no" or "don't know" were from organisations covered by the Regulations, and around a quarter were from respondents not covered. A small number of respondents (5) did not tick any of the boxes provided, but made comments (here or elsewhere) relating directly to this question. Of these, it could be inferred that 3 agreed with the proposal, at least in principle, 1 disagreed, and in 1 case, their overall view could not be inferred.

4.4 A large number (82%) made additional comments at this question, and a few were made elsewhere. The comments again focused on perceived benefits of, or general support for the proposal (the largest number); issues or concerns (the smallest number); and suggestions or perceived requirements for the way forward.

Perceived benefits - inclusion of considerations in award criteria

4.5 Around two thirds of those who made additional comments, including respondents of different types, identified perceived benefits or highlighted support for this proposal. The most common involved expressions of general support, or a perceived positive impact on equality. Other themes included specific benefits relating to the contracting relationship, and perceived benefits relating to the approach / process in public authorities (highlighted by a small number).

4.6 Among the general comments, a number welcomed the inclusion of the proposal, or restated their agreement (or strong agreement) with the question, sometimes stressing the importance of the proposed requirement, or the general value of its inclusion in the Regulations. The relevance of equality to procurement, and the opportunity to influence practice was also highlighted. Several respondents from organisations covered by the Regulations stated that they were already taking this type of action, expressed their commitment to this, or stated that the requirement was consistent with other work, good practice and wider developments. A small number of respondents also identified issues that require to be addressed in the current situation.

4.7 A further common theme was the identification of a positive impact on equality, particularly in terms of consistency with the General Duty (an issue raised particularly, but not only, by respondents from organisations covered by the Regulations), helping to ensure compliance with this and helping to ensure that it is not undermined. Other suggested benefits included: ensuring consideration of equality; avoiding discrimination; promoting equalities work (including in relation to employment of staff); promoting mainstreaming; demonstrating leadership; and using procurement as a lever for change. Several respondents, including a number from equality organisations, suggested the opportunity for impact through this Regulation, and the potential to extend the coverage of the General Duty to other sectors.

4.8 In terms of the contracting relationship, a small number of perceived benefits were also highlighted by respondents of different types. These included the prevention of negative or discriminatory practices, such as: the use of contracting to "dodge" Regulations; the exclusion of some groups from the process; an assumption that finance and procurement policy and practice take precedence over equality considerations; failure to deliver the General Duty; and undermining public authorities' equalities work.

4.9 Other perceived benefits of the proposal included: generally making business sense; protecting authorities' reputations; removing barriers to bidding and broadening opportunities; and widening supplier diversity. It was also suggested that it would help: ensure adherence to the same rules by contractors, including "arm's length" organisations; develop understanding of equality standards among contractors; highlight the importance of procurement to equality issues; improve services; and develop contractors' reputations. A few respondents (including some equality organisations and an individual respondent) stated that organisations supported with public funds should require high standards of equality practice. It was also suggested by a local authority respondent that "best value" involves taking account of the wider impact and benefits of a contract.

4.10 A small number of comments were made about perceived benefits relating to the overall approach / process in public authorities, and these related to: promoting transparency and accountability; and promoting overall good practice in procurement.

Issues or concerns raised - inclusion of considerations in award criteria

4.11 Around a quarter of respondents who made comments raised issues or concerns with this proposal. These were raised by respondents of different types, and related to: aspects of the substance of the proposal (the most common theme); a perceived lack of need for the proposal; and other aspects of its implementation.

4.12 The largest number of issues or concerns raised related to the substance of the requirement, and particularly concerns that Section 9(1) restricts "due regard" to consideration of agreements on the basis of an offer which is "most economically advantageous". This issue was raised particularly by equality organisations and trade unions / professional bodies and comments included that this could: narrow the understanding of how equality and other considerations influence procurement; encourage listed authorities to discount equality and other social considerations in favour of a more cost-focused analysis; negate the added value of factors such as peer support and empowerment of minority groups; introduce further complexity to equalities and procurement; and undermine the need to embed equality in the procurement process. One health respondent also stated that "best value" is not always the same as "economically advantageous" and a few respondents stated that a range of factors should be taken into account.

4.13 A small number of issues were raised by organisations covered by the Regulations relating to a perceived lack of clarity with aspects of the Regulation. For example, it was suggested that it is not clear: what is required; how it would translate into practice; whether using the award criteria, as opposed to other methods, is the most appropriate; and whether it will require the contracting body to build in considerations relevant to the General Duty in award criteria for all contracts, or only those where potential impact is assessed to be relevant. One respondent from a trade union / professional body stated that the term "due regard" is not defined in the draft Regulations. One of the "other" public bodies stated that there is a lack of clarity about how to apply the rule of relevance and proportionality. One education respondent stated that the obligations are weakened without clarity for a public authority on what it "must" do in any given situation. The same respondent raised a specific question about how to treat contracts underway prior to April 2012, but not let until afterwards.

4.14 In terms of other aspects of the substance of the proposal, a small number of respondents expressed concerns about the stage at which consideration is required (i.e. after an offer has been assessed as most economically advantageous). One education respondent stated that creating a separate specific duty for procurement suggests that considering equality within this function is more important than in other functions, which, they argued, is not always the case.

4.15 A small number of respondents (generally, although not only those who disagreed with the proposal) suggested that this proposal is not required. One education respondent stated that they did not consider it necessary to create a separate specific duty as a public authority is required to give due regard to equality within all of its functions, including procurement. A small number of other respondents argued that there is not enough evidence of need for the Regulation, or that public authorities are already required to pay due regard to the General Duty in carrying out their procurement functions. One individual respondent (who agreed with the proposal) stated that the argument used for inclusion of the Regulation was weak, and that the key issue is the role of procurement as a driver for change.

4.16 A small number of other concerns were raised about aspects of the implementation of the proposal. These included that this could: be difficult to evidence and monitor; introduce confusion where such compliance does not form part of the agreement in other areas of the UK; bring legal complications, including raising issues with other European legislation on procurement. It was also suggested that it could: introduce the expectation that the public sector will "police" the private sector in respect of equality; have a negative impact on carrying out core duties; introduce irrelevant factors; and be onerous for smaller suppliers and contracting authorities.

Suggestions for the way forward - inclusion of considerations in award criteria

4.17 More than half of the respondents who made comments identified suggestions or perceived requirements for the way forward in relation to this proposal. These related broadly to: aspects of the substance of the proposal; aspects of implementation of the Regulation; and the need for guidance. Again, some of these reflected the concerns identified previously, and they were made by respondents of different types.

4.18 In relation to aspects of the substance of the proposal, a small number of respondents (particularly from equality organisations) suggested the removal or rewording of "most economically advantageous", or stated that there is a need to focus on added value and social responsibility as well as economics, for the reasons noted above.

4.19 Other suggestions were also made about the substance of the Regulation. For example, a few respondents from equality organisations stated that the requirement should apply to all procurement activity and at all stages, and one suggested that the contracting authority should be required to give due regard to whether the procurement process itself considers the needs of equality groups. One local authority stated that there would be benefits in having a pre-qualification requirement to meet the required equality standards before submitting a tender. One education respondent argued that the Regulation should only apply when contracting for services to be provided on behalf of the organisation, but not in procurement for other work, services or supplies.

4.20 Further suggestions, made by small numbers in each case, were that the Regulation should: be "more robust"; and highlight and reinforce the European Regulations that state organisations can and should apply preference to disabled people's organisations in procurement. It was also suggested that "due regard" is not adequate, and that this must be mandatory and part of the contract. One respondent stated that they would have preferred the Duty in full, like the Welsh one, and another that there should be a more explicit requirement for contracting authorities to include equality related contract conditions. A small number of respondents suggested the inclusion of a clause, the use of appropriate clauses within European procurement Regulations, or the inclusion in all formal tender processes of a general undertaking to highlight the need to comply with relevant legislation (and explicitly the Equality Act 2010).

4.21 One education respondent stated that, if the aim is to build consideration of equality into procurement processes, the Scottish Government should consider placing duties on private sector providers directly. A small number of suggestions were also made about the approach in the Regulation, which stated that it should be: flexible in implementation; proportionate; compatible with European Union Public Procurement Rules; reasonable; measureable and monitored, with the findings reported and published. It was also stated that links could be made to the EQIA process. One respondent, however, stated explicitly that they would prefer to follow existing United Kingdom procurement requirements.

4.22 A small number of respondents sought additional clarification of specific issues. One questioned whether the substance of the contract should meet the contracting organisation's obligations of the General Duty, or whether the contracted organisation should uphold the spirit of the General Duty in the way it goes about its business (and how to evidence the latter). Another asked whether, where existing contracting arrangements are in place, there is scope for introduction of the additional review criteria to ensure performance in relation to the General Duty. Another stated that they would welcome discussion of the practical aspects of demonstrating that "due regard" has been taken, as well as an explicit description of what "considerations" should consist of in relation to the award criteria.

4.23 A number of respondents also made suggestions about aspects of the implementation of the Regulation. A small number of respondents (largely local authorities) suggested that the requirement implies at least a screening exercise to determine the relevance to equalities of the subject matter of the contract. It was also suggested that compliance with the General Duty should be one of a number of criteria. One respondent from an equality organisation stated that there is a need for a robust method of regulation (suggesting that details of this should be open to consultation) and another that a mechanism should be available to challenge whether "due regard" has been taken, that stops short of a legal challenge.

4.24 Suggestions were also made for wider developments, such as: a form of "kitemark" equality assurance; capacity building in the Black and Ethnic Minority (BME) sector; inclusion of the Regulations in wider relevant Regulations on public procurement. One respondent commented on the relevance of the role of a specific organisation. A few organisations covered by the Regulations suggested that the Regulation should not be implemented at present, but that the experience in Wales should be monitored, and that it may also be more appropriate to wait until the new procurement law is drafted.

4.25 A number of respondents (particularly, but not only from organisations covered by the Duty), as at previous questions, identified the need for guidance or issues to cover in this. These included: general procurement and equality; what contracting bodies can and must do (including non-local authority institutions); the level of consideration and detail of award criteria; implementation and monitoring; questions for screening / how to determine relevance; what is proportionate; the implications of European Union procurement law and other regulatory frameworks and practices; and reporting and publishing issues. A small number of comments were made on the nature of guidance (e.g. that it should contain examples, be clear and simple, and usable). Two respondents from "other" public bodies suggested that procurement should be considered in a separate paper with more specific guidance, clarification and consultation for public authorities. A small number of respondents recommended that the Scottish Government work with public authorities and other relevant bodies to develop clear guidelines, or identified examples from their own field that could inform the way forward.

Conditions

4.26 Question 11 asked:

"Do you agree that where a listed authority is a contracting authority and proposes to stipulate conditions relating to the performance of a relevant agreement it must have due regard to whether the conditions should include considerations relevant to its performance of the General Duty?"

Table 12. Responses to yes/no/don't know element of Question 11

Response	Respondents	% of all respondents	% of respondents addressing y/n/dk
Yes	107	76	87
No	8	6	7
Don't know	8	6	7
Not answered	17	12
Total	140

4.27 This question was addressed by 129 respondents (92%) and almost all of these (123) addressed the "yes", "no" or "don't know" element. There was a high level of agreement both among respondents covered by the Regulations and those not covered, and 87% of those who addressed this element stated "yes". A total of 7% stated "no", all of which were drawn from among those covered by the Regulations. A total of 7% answered "don't know". A small number of respondents (6) did not tick any of the boxes provided, but made comments (here or elsewhere) relating directly to this question. Of these, it could be inferred that 3 agreed with the proposal, at least in principle, and in the other cases, the respondent's overall view could not be inferred.

4.28 A large number of respondents (79%) made additional comments at this question. Most related to perceived benefits or general support. A small number related to issues or concerns, and some focused on suggestions or perceived requirements for the way forward.

Perceived benefits - inclusion of considerations in conditions

4.29 Around three quarters of those who made comments, including respondents of different types, identified perceived benefits of this proposal, welcomed it, or expressed their general support. Some of the comments made reference to previous answers (particularly relating to Question 10) which will not be reiterated in detail here. Themes included: overall expressions of support; a perceived positive impact on equality; and business benefits.

4.30 While several respondents expressed general support, a small number of organisations covered by the Regulations also stated that they already take the proposed approach; that it is consistent with their commitment to fairness and transparency; or that it is consistent with other developments. A small number of respondents also identified the requirement as being particularly important given the increasing role of contracting out / procurement in the provision of public services, or perceived problems with the use of this.

4.31 A further common theme among perceived benefits and reasons for supporting the proposal related to the potential for a positive impact on equality. Most of these comments related to either the overall promotion of equality, or the specific implications for meeting the General Duty. It was suggested, for example, that the proposal would: provide a clear direction to procurement officers and ensure appropriate consideration of equality issues; prevent discrimination and encourage more equitable practices in other sectors; raise awareness of relevant issues; and promote positive change. Other issues highlighted were: the perceived relevance of equality issues to procurement; the opportunity to make change in this way; or the view that the proposal would highlight the importance of procurement to equality issues. A few also suggested that it would provide opportunities to additional potential contractors, or help to ensure equitable access to services. One respondent also identified benefits for the supplier (e.g. better attendance, productivity and retention of employees).

4.32 Several respondents made specific reference to addressing the General Duty, with suggestions including that the proposal would: support implementation of this; avoid a public authority circumventing their duties; ensure that contractors are aware of the requirements; and support mainstreaming of the General Duty. It was also stated that: it would be consistent with good practice and with other developments; that it would allow monitoring and corrective action; and that it would enable public authorities to hold suppliers to account.

4.33 A small number of respondents from organisations covered by the Regulations identified benefits in terms of good business sense and practice, and enabling maximum value to be extracted from the contract.

Issues or concerns raised - inclusion of considerations in conditions

4.34 Around a tenth of respondents who made comments raised issues or concerns with this proposal. These comments were made largely by organisations covered by the Regulations, and two trade unions / professional bodies. A small number of these respondents made reference to their comments at Question 10 which will not be reiterated here. Other issues and concerns were raised by small numbers in each case (and mostly, but not only by respondents who disagreed with the proposal). These related to: aspects of the substance of the requirement; a perceived lack of need for the Regulation; implications of the requirement; and a small number of other specific concerns.

4.35 In terms of the substance of the requirement, it was suggested that there was a lack of clarity about what is required. In terms of the need for the Regulation, it was suggested that there is a lack of specific evidence that this is necessary. In terms of the implications of the requirement, concerns related to: the potential administrative burden or unrealistic expectation on the contractor; the perceived onerous task for third sector bodies and small and medium enterprises (SMEs); difficulties of implementation and monitoring; and potential confusion in relation to other parts of the United Kingdom.

4.36 In terms of other issues and concerns, respondents from a small number of trade unions / professional bodies stated that current work has indicated wide variation in the information held by public authorities about contractors, and inconsistent use of a shared definition of Arms Length External Organisations. Another respondent from an equality organisation expressed a general concern that some public bodies appear to assume that competitive tendering is the most appropriate way to procure all services.

Suggestions for the way forward - inclusion of considerations in conditions

4.37 Around a third of respondents (including respondents of different types, most of whom agreed with the proposal) identified suggestions or perceived requirements for the way forward. Themes on which suggestions were made included: aspects of the substance of the proposal; aspects of implementation; and issues relating to guidance.

4.38 Several of the suggestions related to the substance of the proposal, including that the impact should be monitored and the findings published. It was also suggested that: contracts / Service Level Agreements should outline the clear expectations (or a condition) relating to delivery of the General Duty; and contractors should provide their policies and procedures to demonstrate compliance. One respondent stated that, where private contractors are contracted to provide public services or duties, a more specific obligation to comply with the General Duty should be considered by the contracting authority.

4.39 A small number of respondents suggested that all contracted work and services should be included, or that all contracts should stipulate that the service provided is equitable and reflects the target groups for which it is being procured. Suggestions were also made, however, that the proposed action should not be required where it is irrelevant (a suggestion made by a local authority), or that the Regulation should apply only when contracting for services to be provided on behalf of the organisation (a suggestion made by an education respondent). A small number of respondents stated that they would prefer this Regulation not to be implemented (e.g. until the revised Procurement Regulation is drafted, or to enable the experience in Wales to be monitored).

4.40 A small number of specific extensions to the Regulation were suggested. These included the suggestion by a local authority respondent that all sub contracted work (if applicable), must also be able to demonstrate due regard. Another respondent from an equality organisation suggested that partnerships such as Community Health and Care Partnerships, where non-public authority partners may be present, should be included where they deliver public services. Another respondent from an equality organisation suggested a penalty of being taken off the tendering list of providers for the future if suppliers do not adhere to the considerations, and a further respondent from an equality organisation suggested that there could be a requirement to consider how best to encourage under-represented firms to participate in the public procurement process. It was also suggested that the contracting authority should be required to give due regard to whether the procurement process itself considers the needs of equality groups; and that contracting authorities should be required to include consideration of their general duties in all public procurement activities and in entering into relevant agreements. One respondent from an equality organisation stated that "due regard" is not adequate.

4.41 A small number of issues for clarification were raised, including how this would work in practice, and the perceived benefits. A small number of comments were made relating to other aspects of implementing or taking forward the Regulation. In terms of its overall nature, suggestions included that it should be: flexible; reasonable and proportionate. One respondent stated that it should recognise that authorities already try to ensure that services delivered by a contracted external service provided are consistent with the General Duty requirements. It was also suggested that performance of the General Duty should not be the only criteria when assessing performance of an agreement. One further suggestion made was that, as the Scottish Government considers its priorities in the proposed Sustainable Procurement Bill, there is an opportunity to integrate the considerations on equality.

4.42 Several respondents of different types stressed the general need for clear and usable guidance on procurement, or identified specific issues to cover in this. These included: generally, how to translate this into practice; options and powers; the definition of "due regard"; what "considerations" might mean in practice; how to feature equality requirements in service contracts (e.g. in terms and conditions); implementation of the Public Sector Equality Duty by partnerships; performance indicators, the need for monitoring and measurement and the ability to confirm compliance (taking account of the varying size of contracts); and the need for reporting. Two respondents provided examples from their own fields (education and health) of relevant work that they suggested could inform practice.

Summary: Findings - proposals relating to public procurement

4.43 In summary, the main points relating to Section 4 are as follows:

• In relation to Question 10, there was a high level of agreement both among respondents covered by the Regulations and those not covered that where a listed authority is a contracting authority and proposes to enter into a relevant agreement on the basis of an offer which is the most economically advantageous it must have due regard to whether the award criteria should include considerations relevant to its performance of the General Duty. A total of 85% of respondents who addressed the yes/no element stated "yes", while a total of 7% stated "no" and 8% answered "don't know".
• In relation to Question 11, there was a high level of agreement both among respondents covered by the Regulations and those not covered, that where a listed authority is a contracting authority and proposes to stipulate conditions relating to the performance of a relevant agreement it must have due regard to whether the conditions should include considerations relevant to its performance of the General Duty. A total of 87% of respondents who addressed the yes/no element stated "yes", while 7% stated "no" (all of which were drawn from among those covered by the Regulations).
• Additional comments made at both of these questions focused on three main areas: perceived benefits of the proposal and expressions of general support; issues or concerns with the proposal; and suggestions or perceived requirements for the way forward.