The Equality Duty: Obstacle or Opportunity

The Equality Duty: Obstacle or Opportunity

It’s long been recognised that procurers in the public and private sector possess the potential to move beyond the ‘right product, right time, right price’ mantra that permeates much of their profession. The extent to which procurement can be used as a lever to promote wider socio-economic benefits has been widely debated, albeit with mixed results. For some, the power of the public (and private?) purse should be pressed into service to alleviate inequalities and bolster regeneration of communities and disadvantaged businesses. Others see equality as antithetical to procurement objectives and a needless administrative burden.

These competing currents shaped the evolution and introduction of the Single Equality Act. Conceived by a Labour government, this legislative device was intended to ensure that the pursuit of equality was integral to all the functions of public sector bodies. Procurement was to be named in recognition of its central importance to wider social goals. That was then. The advent of the Coalition Government with an alternative vision for the public sector has seen a weakening of the intended purpose of the Act, and the removal of procurement as named vehicle for the promotion of equality.

The dropping of procurement is clearly a setback for many who believe that it would have provided a much needed stick to encourage procurers to acknowledge the importance of social, as well as economic, returns on their activities. Procurers are not noted for their embrace of wider equality considerations. And the extent to which such considerations will be recognised in an era of severe public sector retrenchment certainly invites further scepticism. When this is set against the laisser fair approach of central Government, hopes for substantive change might well fade.

The Government recently published the results of its consultation on the new Equality Duty. Nearly half of the many contributions to this process related to procurement. The Government has responded in variety of ways. The key changes to the regulations are that: public authorities should publish sufficient information to show that they complied with the general duty; public authorities should report on their engagement with interested parties, particularly in relation to the setting of equality objectives; and public authorities should undertake an ‘equality analysis’ of the effects of their policies.

Although procurement is not identified as a specific function for attention, each of these changes provides grounds for (qualified) optimism. For example, public authorities ‘will need to publish sufficient information to demonstrate compliance with the duty across their functions’. Surely this includes procurement, since it is a key activity of such bodies. Although there is currently no guidance on the meaning of ‘sufficient information’, there is no reason to suggest that diversity data on existing and potential suppliers should be excluded. Empowered citizens – which the Government hope all of us will become – may be in a position to demand access to such information. After all, ‘transparency’ is current preoccupation of policy makers.

The requirement for public authorities to report on the engagement activity that they have undertaken in developing their objectives is another potentially useful incentive to encourage a more inclusive approach to procurement. Research undertaken by the Centre for Research in Ethnic Minority Entrepreneurship (CRÈME) and many others has shown that enlightened procurers can diversify their supply base by engaging with a range of networks (for example, intermediary organisations, representatives of minority enterprise, business associations). The regulations could encourage productive interactions between equality-conscious procurement officers and intermediary bodies with access to firms that are ‘fit to supply’ the public sector.

We don’t yet know what form the ‘equality analysis’ envisaged in the regulations will take; but at a minimum, public authorities will need to be cognisant of the equality implications of their policies. The Government has made clear that ‘in order to comply with the general duty, public authorities need to understand the impact of their current and proposed policies and practices.’ This requirement could well cast light on how public authorities (and their private sector partners) are endeavouring to incorporate equality considerations in their procurement practices. It may encourage the procurers to become more ‘diversity-aware’ by including equality as one of the factors that they have to consider as part of their work.

Notwithstanding these recent amendments, the Equality Duty remains shrouded with ambiguity. There is little consensus on how the Duty will operate in practice, and much remains to be clarified. This will no doubt mean that the legal profession will be the immediate beneficiaries, eagerly exploiting the occasionally nebulous drafting of the regulations. However, and in keeping glass half-full sentiments of this posting, we should bear in mind the following. First, the Equalities and Human Rights Commission (EHRC) have been tasked with the job of providing guidance to accompany the regulations. The EHRC is a keen advocate of effective and inclusive approaches to procurement. It is taking soundings from a range of interested parties on how the regulations can work in a way that produces ‘better procurement practice’ (where equality and procurement objectives complement rather contradict each other).

Second, there are many public and private sector organisations that are working to become more inclusive without the stimulus of government legislation. Organisations like CRÈME, Business in the Community and Supplier Diversity Europe have considerable experience of working on this agenda. These experiences could be shared as part of a process to disseminate exemplar initiatives.

Finally the less prescriptive approach favoured by the Government (and evident in the regulations), provides ample scope for innovation in this area. As the organisations noted above have demonstrated, there are many ways of pursuing equality outcomes through the procurement process. We need to use these examples to think more imaginatively about moving towards this goal. The Equality Duty may not have gone as far as some would have liked; but it certainly offers an invitation to think creatively about an issue that will only increase in importance.

Monder Ram

New Migrant Businesses: Challenges and Opportunities

It’s a difficult time for many small firms at the moment. But does it get any tougher for new migrant who have to cope with the twin pressures of adapting to a new society and making their way in the business world from scratch? The Midlands, like many other parts of the country, has seen a wave of migration from a wide range countries. This is sometimes called new migration, or ‘super-diversity’[1] in contrast to established patterns from countries in the Caribbean and South Asia. Many new migrants establish their own businesses, a process of great importance for their economic integration. Yet it remains a neglected contributor to entrepreneurial activity.

The Centre for Research in Ethnic Minority Entrepreneurship (CREME) is actively engaged in researching and working with new migrant businesses and support organisations. Projects in the east and west Midlands have revealed:

•  An alarming dearth of information on the scale and nature of new migrant business activity
• Considerable interest in entrepreneurship as a career option amongst new migrants
• Involvement of new migrants in a diverse range of business activities
• Unacknowledged human capital within many businesses
• A lack of awareness of the existence and role of ‘mainstream’ business support agencies
• Active interest in pursuing appropriate support to develop their businesses
• A willingness to engage with business support professionals

 New migrants faced a number of barriers to enterprise:

 Access to finance. They  struggle to secure finance from banks and other ‘mainstream’ financial intermediaries. This leads to reliance on informal sources, and the running of severely under-capitalised businesses.

 Cultural constraints. Language is a major obstacle for some groups, as is a lack of familiarity with rules and regulations surrounding the business activities. Equally, business support intermediaries rarely have an appreciation of the different cultural traditions of new mi-grant communities.

 Trading patterns. The tendency for new migrants to trade primarily with their own communities means that their potential customer base is extremely narrow. There is a lack of attention to the need to diversify their businesses.

 Lack of information. New migrants often struggle to secure information on the process of business start-up and functions such as marketing and business planning.

 Business support professional face major challenges in responding to this growing segment of the small firm population. A lack of familiarity, capacity and ‘reach’ into these communities is a bar to effective engagement. Such challenges are likely to intensify in the light of the uncertainty surrounding the nature, form, and remit of new business support arrangements. Yet an appropriate policy response is imperative in the light of evidence that such firms can play a vital role in facilitating economic and social integration. As the Local Enterprise Partnerships and other interventions take shape, it will be interesting to see if they are attuned to the needs of new migrants. After all, the evidence suggests that they are: local to many areas; enterprising in many ways; and keen to work in partnership with responsive agencies. It could be an intriguing test of the ‘Big Society’.

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[1] Vertovec, S. (2007) ‘Super-diversity and its implications’, Ethnic and Racial Studies, 30(6): 1024-1054

Diversity and Enterprise: Where to Now?

 

You may ask yourself, well, how did I get there?
Letting the days go by, let the water hold me down
Letting the days go by, water flowing underground
Into the blue again, after the money’s gone
Once in a lifetime …

(‘Once in a Lifetime’, Talking Heads)

Disorientation, incredulity, and foreboding aren’t confined to the lyrics of this classic pop-song. Talk to people in the business support profession, particularly those with an interest in minority enterprise (women, ethnic minorities, and young people), and the sense of existential angst soon becomes evident. The reverberations of the most severe economic crisis in a generation and the Coalition Government’s policy towards enterprise are being keenly felt in the business support community. Nowhere is this truer than with Regional Development Agencies (RDAs) and Business Link service providers. Both institutions are to be axed. What follows their departure is unclear, as is the role of minority enterprise on the agenda of whatever new arrangements that eventually emerge.

RDAs and Business Links have often been active in promoting minority enterprise. They have pioneered initiatives such as minority business representative groups, community-based support, the collation of diversity data, and targeted policies on access to finance and procurement. Such measures have a sound economic case. For example, ethnic minority businesses: contribute an estimated £40 billion to the economy; constitute over a third of the small firm population in cities like Birmingham, Leicester and London; are significant employers of workers from disadvantaged communities; and are becoming increasingly diversified. They also face particular challenges, particularly in relation to banks and the exploitation of procurement opportunities in the public sector.

These features provided the basis for policy interventions at a national, regional and local level. Such activity, aided by growing research evidence, identified a number of key themes, including:

• The importance of adopting a strategic approach to encouraging entrepreneurship in disadvantaged communities
• Viewing minority enterprise as source of competitiveness, as well as a vehicle for economic inclusion
• Developing an evidence-based approach to interventions, which would require collating and using disaggregated data on minority entrepreneurs
• Encouraging a balance between ‘mainstream’ and ‘community-based’ measures
• The need to build imaginative relationships with private sector partners, rather than relying solely on public sector providers

How far these themes will be picked up by successor institutions is anyone’s guess. Local Enterprise Partnerships will be based on alliances between businesses and local authorities. They are intended to be responsive to local priorities; but they may not have responsibility for business support, and they are likely to have much less funding than their predecessors.  The indications are that enterprise agencies will have a much more prominent role. But doubts have already been expressed over their capacity, reach in minority communities, and ability to develop relationships with funders from the private sector. A number of growth hubs have also been announced; but will they have the resources and links with minority firms to deliver an inclusive approach to this agenda?

There are potential opportunities amidst the acute uncertainty and hefty challenges that shroud this agenda. Take the Single Equality Act: it will require public bodies (and their private sector partners) to engage seriously with diversity issues in all their operations. This includes procurement, which could have beneficial consequences for minority suppliers. Many private sector bodies are currently working with Higher Education Institutions in this area. CREME’s West Midlands-based project, the Minority Ethnic Enterprise Centre for Expertise, is a case in point. It is delivering real support to minority entrepreneurs from partners across a wide spectrum of sectors. And if the idea of the ‘Big Society’ is to have any traction, it will have to be embedded in diverse communities; enterprise has often been an effective means of addressing their concerns.