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Public sector procurement in the UK amounts to approximately £290 billion annually, representing about one-third of all public spending. This indicates that a significant portion of public sector funds is allocated towards the purchase of goods and services. In the March 2008 budget statement, the government expressed its desire to enhance the competitiveness of small and medium-sized enterprises (SMEs) in bidding for public sector contracts. Our objective is to establish a Black and Brown owned supplier procurement framework to the government. The framework will be overseen by three established overarching primary contractors who will serve major projects across various industries. These primary contractors will collaborate exclusively with black and brown owned SMEs in their supply chains.

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In 2010, the coalition government pledged to support small business procurement, with a specific target of awarding 25% of government contracts by value to small and medium-sized enterprises. We are striving to secure a similar commitment for Black and Brown owned businesses, aiming for 2% of contracts by value within that 25%.

The landscape of small businesses in the UK is predominantly white, with only 6% of SMEs led by individuals from minority ethnic groups, as per government data. Among them, just 11% are operated by Black entrepreneurs, totalling an estimated 9,321 Black-led businesses out of 5.6 million SMEs in total - a mere 0.167% of the SME population.

 

Black entrepreneurs spend the most time and money, out of all ethnic groups, in developing a basic business idea. Ideally, Black business owners would have access to sufficient resources to address their business requirements and societal aspirations. However, statistics from the British Business Bank reveal that Black entrepreneurs experience the poorest business outcomes in terms of median financial turnover (£25,000 per annum compared to £40,000 for Asian and other ethnic minorities) and labour productivity (£13,125 per annum compared to £22,222 for white entrepreneurs). 

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The primary contractors are responsible for imposing a fee on every contractor who successfully secures a contract within the established framework (through competition or direct award). This fee will be calculated as a percentage of the contract revenue. The collected funds will then be utilised for the training of start-ups owned by individuals of black and brown descent across the United Kingdom. The hubs will be located in Manchester, Birmingham and London.  The workshops are set to be conducted by experienced business owners who are Black and Brown consultants and business owners. It will be the main duty of the primary contractors to ensure that all providers are registered.

 

Despite investing significant time and resources in refining their business concepts, Black entrepreneurs experience the poorest financial outcomes compared to other ethnic groups in terms of median turnover. This procurement strategy not only aims to assist Black and Brown entrepreneurs in realising their business ideas but also provides them with a structured platform for business expansion and development. 

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Transforming Public Procurement Act change 2023

 

The reforms proposed within the new Procurement Act 2023 are important because they will improve our procurement regulations, so that every pound goes further for our communities and public services. They place value for money, public benefit, transparency and integrity at the heart of our procurement system and will modernise and unify our systems and processes. The reforms will get tough on underperforming suppliers, and exclude those who pose an unacceptable risk.

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For £1 of White British wealth households have;

Indian households have 90-95p

Pakistani households 50p

Black Caribbean 20p

Black African and Bangladeshi households have 10p

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In 2020, the Social Metrics Commission found that nearly half (46%, 900,000 people) of all people living in families where the household head was Black/African/Caribbean/Black British were in poverty, compared to just under one in five (19%) of those living in families where the head of household was White.

 

This strategy has the potential to generate sustainable wealth for black and brown families. It is evident that a thriving business can bring about positive financial outcomes for its employees, their children, and affiliated consultants, thereby establishing a continuous cycle that challenges systemic racism.

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It may be the case that those responsible for choosing and bestowing awards are hesitant to embrace approaches like these, but it is imperative. The call for inclusivity in procurement is highly essential. Often, a single entity is consistently granted contracts that are financed by the government. Consequently, this leads to the creation of long-term prosperity for their employees and associates, irrespective of their commitment to diversity or the lack thereof. The staff members and their families enjoy the advantages of these public tenders, perpetuating the cycle and exacerbating the disparities in household incomes and gender pay gaps, depending on the awarded organization's EDI strategy.

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