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Thu 29 July 2021

The Government’s outsourcing effort reveals a huge diversity imbalance in private sector suppliers, report the Byline Intelligence Team and The Citizens

The overwhelming majority of firms that have won the most in COVID-19-related contracts are run by men, the Byline Intelligence Team and The Citizens can reveal.

Our investigation has revealed that the top 50 Government contract winners during the Coronavirus pandemic have been awarded at least £20.9 billion in individual (‘non-framework’) deals. This amounts to two-thirds of the contracts awarded to some 1,593 firms over the past 16 months.

We can further reveal that none of the CEOs or senior directors of the top 47 companies – amounting to 145 people – is a black woman. Of the CEOs and managing directors, 91% are men and 91% are white. Only 4% of senior directors in the companies are black, all of whom are men and work for the same company. The most recent 2011 Census found that 14% of people in the UK considered themselves to be part of a non-white ethnic group and 19.5% non-white-British.

There is no suggestion that the Government sought out these companies on the basis of certain diversity characteristics or lack of them. Rather, it demonstrates the disparities that exist within the corporate world, including the companies commissioned to provide public sector services.

In 2019, the Independent reported that there are more CEOs called Steve among FTSE 100 companies than those from black and ethnic minority backgrounds. In 2019, more than half of FTSE 100 companies also had no black and ethnic minority board members.

Yet Government action can have a significant impact on the level of diversity in corporate life. A report from the Regional Studies Association found that public procurement is the main driver of highly concentrated capital city economies whereby firms cluster around the centre of power. The Government can lean on firms to be more self-aware of diversity issues, by encouraging the publication of staff diversity reports, for example. But the sheer scale of public sector procurement also sculpts the environment in which businesses operate – and can catalyse changes in behaviour.

Indeed, the scale of Government outsourcing has been fully witnessed during the COVID-19 pandemic. As previously revealed by the Byline Intelligence Team and The Citizens, the total value of all the contracts that have been awarded in relation to the pandemic amounts to £54.2 billion – more than the GDP of 140 countries and territories in 2020, according to World Bank data. This figure includes ‘framework agreements’, which award contract opportunities to multiple suppliers. Last year alone, the UK borrowed almost £300 billion to cover various pandemic-related expenditure, including its procurement contracts.

We also revealed last week that 30% of the firms that have won the most in COVID-related contracts have ties to the governing Conservative Party. More than £3 billion in contracts have been awarded to Conservative donors and associates during the pandemic. Subsequently, Byline Times has calculated that £615,000 has been donated to the Conservatives by individuals linked to firms that have won hundreds of millions in Government COVID contracts.

This article was produced by the Byline Intelligence Team – a collaborative investigative project formed by Byline Times. If you would like to find out more about the Intelligence Team and how to fund its work, click on the button below.

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