The Secretary of State for Health and Social Care stated that he wanted “this to be a turning point in the UK’s mission to eradicate slavery and human trafficking in supply chains around the globe. As the biggest public procurer in the country, the NHS is well placed to spearhead this work.”
This will be a welcome addition to ensuring transparency in some of the largest supply chains, especially given the criticisms of the current approaches to reporting (let alone compliance) under the Modern Slavery Act 2015. The government’s own Modern Slavery Statement also sets the tone for this amendment (and perhaps further similar approaches in the future), in keeping with the approach expected in the corporate world - i.e. top-level commitment: “All governments have a responsibility to ensure taxpayers’ money does not inadvertently fund criminal activity and to protect vulnerable workers in their supply chains from exploitation.”
This approach is also consistent with the government’s transparency in supply chains consultation which resulted in a commitment from government that large public bodies not currently captured by legislation would be required to publish a modern slavery statement. This would require legislative change, although, in practice, many public sector organisations already voluntarily publish statements
What does this mean in practice for the NHS and those who form its supply chains?
Put simply, suppliers are likely to face increased questioning on their supply chain due diligence, regardless of their size.
Future procurement processes
The Act does not detail the approach that will be taken to eradicating the use of goods and services by the NHS that are “tainted” by slavery and human trafficking. It requires the Secretary of State to make regulations, and those regulations may include provisions around:
- the procurement processes to be followed;
- steps to be taken by public bodies for assessing and addressing risk; and
- contractual requirements.
We consider what this amendment could potentially mean in practice below:
- Possible amendments to the Crown Commercial Service Standard Selection Questionnaire to allow contracting authorities to assess risk and further tailor their individual procurements (although amendments can currently be made to Part 3)
- Extension of mandatory exclusion grounds to include matters other than offences is a possibility, given that offences under the Modern Slavery Act are already grounds for exclusion
- More focus on pricing, noting that abnormally low tenders (a potential red flag for exploitation) are already covered by the Public Contracts Regulations 2015, but we may see more explicit links to exploitation in regulations going forward
- Using social value to score bidders against commitments to eradicating modern slavery and paying living wages etc
- Whilst there are various safeguards within standard NHS contracts already, we may see enhanced contractual requirements with clear audit and self-certification provisions for suppliers
Any amendments to the procurement regime for healthcare services are likely to be incorporated into to the new Provider Selection Regime. For further information on these proposals please see our Health and Care Bill 2021: Provider Selection article and Provider Selection Regime: Starter for ten on the supplementary consultation article.
What this means for suppliers of goods and services to the NHS
For those supplying goods and services to the NHS there is likely to be a significant increase in supply chain due diligence questions and requests for policy data.
One of the key challenges of transparency in supply chains is the extent to which an organisation can monitor its entire supply chain, with the Act stating that goods or services will be “tainted” by slavery and modern trafficking:“…if slavery and human trafficking takes place in relation to anyone involved in the supply chain for providing those goods or services.”
Suppliers will want to monitor updates on the detail of how this provision is likely to be implemented in practice so that they can prepare systems and controls to ensure they are taking the necessary steps around supply chain monitoring to meet the regulatory requirements once they become clear.
We are already starting to see:
- organisations (regardless of size or type) beginning to develop appropriate and effective systems and controls to monitor their supply chains; and
- the Government’s Modern Slavery Statement Registry increasing the focus placed on the content of statements as it becomes easier to compare organisations.
Organisations which currently provide goods and/or services to the NHS or which are commissioned to provide NHS services may wish to consider:
- internal risk analysis for modern slavery and human trafficking in their supply chain;
- updating supplier due diligence and contractual provisions to enable monitoring of supply chains;
- providing training to procurement and commercial contracting functions; and
- adoption of a modern slavery policy and publishing a voluntary statement (if not legally required to publish).
How we can help
Our experts can assist NHS organisations and suppliers to the NHS with any queries around the public procurement regime and modern slavery compliance. We can:
- Assist with the design of compliant procurement processes, including concerns around high risks of modern slavery or corruption
- Provide training around the public procurement regime
- Provide training on the current modern slavery regime and best practice
- Assist with the design of compliance framework, due diligence, systems and controls
- Assist with modern slavery statements (mandatory and voluntary)
- Assist with contractual documents and standard contract provisions proportionate to risks