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Businesses must sign ‘social responsibility charter’ to win contracts

Businesses must sign ‘social responsibility charter’ to win contracts

🕔29.Oct 2012

Firms wishing to conduct business with Birmingham City Council are being asked to sign a social responsibility charter, with a clear hint that those refusing to do so may not win contracts with the local authority in future.

The council’s Labour leadership is beginning a period of  consultation into the charter, which will require suppliers of services to use local supply chains wherever possible, create employment and training schemes for communities, and to pay staff substantially more than the minimum wage.

The charter sets out a wide range of principles that companies bidding to supply the council with up to £1 billion of goods and services must stick to. These include:

  • Adhere to the council’s jobs and skills policies by creating training opportunities at every stage during the procurement process.
  • Recognise employees’ rights of freedom of association and collective bargaining, including not using ‘blacklists’ in recruitment processes.
  • Not discriminate in respect of recruitment, compensation, access to training, promotion, termination of employment or retirement based upon race, caste, national origin, religion, age, disability (including learning disability), mental health issues, gender, marital status, sexual orientation, union membership or political affiliation.
  • Eliminate unnecessary waste by adopting the, reduce, reuse, recycle philosophy. Be a good neighbour by minimising noise and environmental damage.

It’s proposed that some clauses in the charter will be voluntary, but those setting out a commitment to paying the Living Wage and purchasing supplies and recruiting employees locally are likely to be mandatory. The threshold at which the charter’s principles will apply to small firms will be subject to consultation.

Fears that the charter might break European competition rules are being downplayed by council leaders. They insist that the Public Vale Act 2012 places a duty on local authorities to consider how what is being procured might improve the economic, social and environmental well-being of their areas.

Coun Stewart Stacey, cabinet member for Commissioning, Contracting and Improvement, said the council wanted to use its annual £1 billion purchasing power to boost the local economy by committing firms to “buy in Birmingham”.

And he made it clear that future procurement decisions “will take account of the principles of the charter and it will form part of the terms of new Birmingham City Council contracts”.

Coun Stacey (Lab Acocks Green) added: “We intend, through this innovative procurement strategy that puts Birmingham first, to offer a lifeline to our city’s struggling economy and create much needed jobs and apprenticeships.

“But it’s not just the direct economic benefits that procurement can support; our purchasing power will be used to encourage suppliers and partners to make a positive contribution to Birmingham’s communities through activities such as mentoring and capacity building, and working with schools and third sector groups.”

The council will now listen to views on the charter from its private and third sector providers, after it launched a six-week consultation alongside strategic partner, Amey, which won the contract in 2010 to manage and maintain the city’s roads for 25 years.

One of the first decisions of the city’s Labour administration, which took control in May, was to introduce the Living Wage of £7.20 an hour for 3,000 low-paid council workers. The figure is substantially higher than the national minimum wage of £6.08.

Coun Stacey added: “Putting more money in the pockets of Brummies will help local shops and businesses, creating a virtuous spiral that can treble its value to the local economy; and there is plenty of evidence that paying the Living Wage boosts flexibility and performance, reduces sickness and aids staff retention.”

City council leader Sir Albert Bore (Lab Ladywood) said: “Our overarching aim is using the power of procurement to increase the volume of spend on local suppliers and local employees to stimulate growth in the local economy by increasing the re-spend of employees and local suppliers and sub-suppliers.

“To achieve this we have identified a set of guiding principles which form the backbone of the charter, we have considered that these are the essential ones required to help boost the Birmingham economy, create much needed jobs and improve the overall quality of life for Birmingham’s citizens.”

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