MPA/MPS contract regulations – equalities statement

Report: 13
Date: 1 May 2003
By: Clerk

Summary

The Authority’s contract regulations are currently being reviewed. The working group leading this review is seeking to ensure equality objectives and implications are taken into account when drafting these. The report seeks members’ views on the proposed approach to incorporating equalities within the regulations.

A. Recommendation

The Board is asked to agree:

1. the equalities and diversity statement attached in Appendix 1 for inclusion in the MPA’s contract regulations.
2. To request a report from the Commissioner on the cost implications arising from the approach set out in the statement.

B. Supporting information

Introduction

1. Contract regulations are a key element of the financial control framework within which the financial management of the Authority and the MPS takes place. They sit within a hierarchy of documents, which set out the governance arrangements in relation to finance as follows:

• Standing Orders approved by the Authority.
• Contract Regulations approved by the Authority.
• Financial Regulations approved by the Authority.
• Scheme of Delegation approved by the Authority.
• Scheme of Devolved Financial Management approved by the Treasurer/Commissioner
• Financial Instructions approved by the Treasurer/Commissioner

The Financial Regulations have been reviewed by the Authority and a joint MPA/MPS working group of officers is now considering amendments to Contract Regulations and the Scheme of Delegation to reflect the experience of the MPA’s operation since July 2000 and also changes in current best practice.

2. The Contract Regulations’ purpose is to set clear rules for the procurement of all goods, services, buildings, works, property and land. They set out the manner in which contracts are to be handled and the relative responsibilities of the Authority and the Commissioner in this process. The regulations are supported by a procurement strategy and practical guidance notes. Amendments to the contract regulations provide the opportunity to set out the Authority’s expectations upon those who manage or bid for contracts and inform the drafting of the subsidiary documentation. It is proposed that a new statement within the regulations refers to the Authority’s equalities objectives and framework with respect to contracts. A draft of this statement has been prepared (attached as appendix 1) and members’ comments on this are now sought.

3. Three specific matters are brought to members attention:

1. The statement proposes several equality-related objectives in paragraph 1. For the purposes of the Race Relations Amendment Act 2000, the draft regulations have been considered with regards to their impact upon minority ethnic businesses and service users. The premise that has been taken is that such businesses are under-represented in competing for and winning contracts. There is no clear definition of a ‘minority ethnic business’, which presents a difficulty in objective-setting, but for purposes of this report, this term refers to a business owned/led by people from the Black and Minority Ethnic (BME) groups or containing BME staff in high proportion. The draft statement’s emphasis is instead upon a much broader range of objectives, namely paragraph 1(a-d) in the statement. The need to see more BME businesses competing for and winning contracts is not made explicit as it is not felt appropriate to be so specific. The aim to contract with prospective tenderers that have and can demonstrate equal opportunity policies places a different emphasis and may be at odds with the practice in small business. Members are asked for their views on this issue.
2. Adopting equalities target-setting and performance monitoring may add additional costs to the contract management process. However, it is not clear at present the nature or scale of these and to what extent the MPS would be able to absorb them within current staffing resources. The statement recognises the value performance monitoring has made in driving forward and managing equality initiatives, but at this stage, it only refers to the need to give further consideration to the matter, not setting out any firm commitment to introducing new systems. It is suggested a report is sought from the Commissioner on the how the Authority’s expectations will be delivered and on their cost/resource implications, if any.
3. Under current practice, contracts are awarded to tenderers that can demonstrate the most economically advantageous offer. This means that several criteria, including costs, can be taken into account to assess the bid that is most favourable to the Authority. The statement publicises the Authority’s intention to ensure equalities and diversity criteria will be built into pre-tender work and, where appropriate, the specification stage and thus be included as part of the tender approval. The MPS have expressed the concern that such criteria could lead to an increase in costs and seeks to know whether the Authority is prepared to meet these.

4. A risk assessment has been carried out, exploring 3c further. Two options have been considered:

1. No additional funding is provided to meet the equalities and diversity objectives. Risks:
   1. The statement’s objectives are not achieved.
   2. Other elements of service receive less priority e.g. lower standards of service are specified in the tenders.
   3. Contractors is expected to absorb any additional costs which may limit competition and their viability over the duration of the contract.
2. Additional funding is proposed. Risks:
   1. The Authority pays for matters which the service/contractors should meet themselves through normal practice.
   2. The funding does not address the equality and diversity objectives set out.
   3. A wrong level of budget is set.
   4. Conflicts arise as to which services or contracts receive such funding or on the different elements to be funded i.e. policy development, monitoring, contract management, and specifications/standards of service.
   5. Contractors expect the Authority to fund all their equalities initiatives related to work for the Authority.
   6. The budget would be more effectively earmarked for other initiatives.

5. To deal with the issues raised, members are asked to agree to receiving a more detailed report from the Commissioner on the cost and funding implications of the statement, particularly with regards to where extra costs may be incurred within the service or on the part of contractors. The report will also be required to draw upon studies that demonstrate the cost advantages and benefits of good equalities practice.

6. The Commission for Racial Equality has recently issued draft guidance on procurement. The guidance advises local authorities specifically on how the tendering process can be made duly mindful of race equality. It covers contracts compliance, contract packaging, select lists, and marketing issues. The working group will be considering these matters and review the supporting tendering practice notes in the light of these.

C. Equality and diversity implications

The assumption being made by the working group and used in this report is that although the MPA/MPS have striven to promote open and fair competition for contract work, the Authority needs to take a more pro-active approach to widen the competition to better encompass the MPA’s equality priority groups that are currently under-represented in the delivery of services. The draft statement aims to advise contractors and contract managers of the priority with which equalities will feature in the tendering and management of contracts. The statement also seeks to ensure services are specified in a way that is responsive and appropriate to all Londoners.

D. Financial implications

A report is sought from the MPS on the possible cost and resource implications, if any, of new system requirements arising from the proposed equalities statement.

E. Background papers

‘Race Equality and Procurement in Local Government: a draft guide to meeting the duty to promote race equality’, Commission for Racial Equality, 2003

F. Contact details

Report author: Jude Sequeira

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

Appendix 1: Contract regulations: draft equalities and diversity statement

1. The Metropolitan Police Authority has a adopted and published an equal opportunity statement which states the Authority’s values to treat everyone fairly, be open and honest, to work in partnership and to change to improve. The statement specifies the Authority’s commitment that it will not seek to discriminate on the grounds of race, gender, disability, sexual orientation, religion or belief. In addition to its own objectives, the Authority supports the objectives set out in Metropolitan Police Service’s Diversity Strategy and the MPS’ work towards meeting these. The Authority also has to comply with legislative duties, national and European, to act in a non-discriminatory way, and to promote equal opportunities and good community relations. The Authority will therefore aim to ensure its contract strategies, regulations, policy statements and processes shall:

1. promote open and fair competition
2. ensure service delivery is accessible and responsive to the diversity of people living and working in or visiting London.
3. encourages the provision of work, service and goods by businesses that support equal opportunity policies and which help ensure the Authority complies with its statutory duties.
4. enable London to become the safest world city, through taking account of the social, economic and environmental impacts of tenders, where relevant.

2. To achieve these objectives and fulfil its statutory duties with respect to equality matters, the Authority will particularly welcome tenders from businesses that:

1. promote equal opportunities in their workplaces and in the delivery of their services;
2. strive towards achieving a workforce that reflects the diverse population of London;
3. value consultation as a means for delivering responsive services;
4. have developed a complaints policy for dealing with complaints from members of the public in a timely and respectful way;
5. work with the police and its partner agencies in tackling the causes of crime and social exclusion as well as promoting good community relations between persons of different race, religion and beliefs;
6. are prepared to maintain and supply employee-related data requested by the Authority in terms of race, gender, disability and sexuality;
7. will promote accessibility in the workplace and for the Authority’s service recipients.
8. can demonstrate positive action in favour of persons from the Authority’s equality priority groups.

3. The Authority issues this statement to inform those interested in competing for contracts for the Authority that the above factors may be taken into account in identifying ‘the most economically advantageous offer’ in combination with that achieving ‘best value.’

4. For its part, the Authority, through the Metropolitan Police Service, will aim to:

1. Identify works, services and goods that are particularly relevant to equality and diversity considerations.
2. Advise the London Development Agency and other relevant organisations of the skills, technical knowledge, and capacity it requires, to enable such organisations to build local capacity and widen competition in London with regards to these requirements, especially amongst business owned/led by persons from under-represented groups.
3. Discuss with and hear from businesses new to providing work, services and goods to the Authority, in order to ensure they have maximum opportunity to compete for contracts.
4. Keep under review its tendering processes in the light of best practice, guidance and codes of practice as issued by relevant bodies.
5. Consult with service users to seek to ensure contract specifications identify the needs of all users and potential users.
6. Consider setting targets and developing systems to monitor diversity outcomes in the key stages of contract tendering.
7. Demonstrate internal resource capacity and expertise able to provide guidance to prospective tenderers/contractors as well as those purchasing works, services and goods, on the equality and diversity objectives above.

5. The Authority recognises the value of reducing inequalities and promoting diversity in terms of crime, service costs and achieving continuous improvement. It therefore expects the Metropolitan Police Service to ensure it helps fulfil the above stated objectives to the best of its ability.

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