R i s k , t r a n s p a r e n c y a n d s e c u r i t y between sectors.5 Reliance for assuring ethical standards was also placed on providers meeting legal and regulatory obligations, such as those directed at anti-bribery or corruption. Whilst necessary, we do not consider this sufficient assurance or a substitute for ethical consideration. One area which gave us particular concern arises from the size and complexity of supply chains, in particular the use of sub-contractors where there is potential for lack of visibility on the part of commissioners as to the performance of sub-contractors and the extent to which their behaviour is being monitored and evaluated. Clear lines of accountability need to be established between the commissioner and the lead contractor. However, with regard to whether small and medium enterprises (SMEs) might find an ethical framework an unnecessary or unworkable burden (due to their size), we found this concern not to be supported by those we met. There was a general sense that ongoing monitoring of contracts was limited and if it did occur was focused on performance and financial measures. This gives us some unease, especially when taken together with an acknowledgement from commissioners and providers that too many commissioners and contract managers are lacking the commercial skills to effectively manage providers. Conclusions It is evident from our research that currently there are no consistent structures or arrangements in place actively to promote the right ethical standards as part of a process for securing the regularity and propriety of commissioning and procuring of public services. There is a need for any such framework to be risk-based, flexible and proportionate, as stated in the CSPL report Getting the Balance Right: Implementing Standards of Conduct in Public Life: ‘In the standards field proportionality is concerned with the balance between propriety, accountability and efficiency; in the context in which decisions are made; and the outcomes intended’. How it is implemented in practice will depend on the nature of the public service being provided, the model of delivery and the kind of provider. The full report proposes an ethical standards framework as a guide and as a basis for further discussion. As well as making the following recommendations aimed at central government and reflecting the scope of the research itself. We consider that much of the research findings and many of our conclusions are generic and will be of broader relevance and application across the public sector. It is inherently difficult to contract for values and culture. But we believe we can build on existing mechanisms, many of which will Existing standards frameworks for supply chains Commonwealth Governance Handbook 2014/15 108 For the last 30 years, the UK government has been commissioning and procuring third parties to deliver public services. An estimated third of all public spending on services is now delivered by private companies. The National Audit Office estimates that the public sector spends £187 billion per year on goods and services with third parties across the public sector. The CBI calculates that the public services sector in the UK accounts for 7.2 per cent of GDP and employs 5.4 million people. The rate and value of public sector outsourcing contracts appears to be accelerating. As well as direct out-sourcing a very wide range of new ways of delivering public services now exists resulting in increasingly large and complex supply chains. At central government level, the Crown Commercial Service has been established to bring together the government’s commercial capability into a single organisation, to create expert commercial services for common goods and services as well as complex procurements, and to support departments’ projects when needed. Crown Representatives work across departments and manage either a small pool of the government’s key strategic suppliers or represent a particular sector of the market. As at April 2014 there are 21 Crown Representatives from a mix of commercial and public sector backgrounds. The Merlin Standard is designed to recognise and promote sustainable excellence within supply chains. Its aim is to encourage excellent supply chain management and to ensure fair treatment of partners and subcontractors by the prime contractor. The principles on which it is built include conduct and elements of the assessment of the organisation validated by supply chain partners includes such criteria as ‘culture in which communication is open, honest and without unreasonable constraint’, ‘procurement processes are fair and transparent’ and ‘it actively seeks users’ feedback…to inform and improve practices’ The Merlin Standard is a required standard for providers of the Department of Work and Pension Disability Assessments. SPRAM (Sustainable Procurement Risk Assessment Methodology) is a tool developed in-house by the Department of Work and Pensions for ensuring the department’s sustainable procurement targets and objectives (e.g. Small Medium Enterprises (SMEs) agenda, Greening Government Commitments, Equality duties) are factored in to contract programmes. It allows for the consideration and mitigation of potential environmental, economic and social risks associated with a contract. SPRAM must be completed prior to tender specifications being developed and updated on contract award. It is the responsibility of the procurement lead, the senior responsible officer and, during contract management, the non-commercial staff to ensure SPRAM is regularly updated and submitted as directed. All suppliers can expect to be subject to a SPRAM assessment. CAESER (Corporate Assessment of Environmental, Social and Economic Responsibility) is an online tool managed by NQC Ltd which validates high environmental standards in a supply chain. CAESER examines areas such as working conditions, use of SMEs and skills development of each organisation’s operations, which are then assessed against the wider context of corporate social responsibility and the government’s sustainability agenda. Suppliers can undergo a ‘self-certified’ assessment, which is then ‘verified’ or awarded a ‘gold status’, where CAESER assesses the responsible practices of suppliers and can recommend improvements to their policies and practices. The CEASAR assessment methodology is recognised by the Chartered Institute of Purchasing and Supply, and is used by a number of central government departments in their procurement of goods and services.
CEP template 2012
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