This article really could have been posted here or on my Bad Buying site, as the issues it addresses have relevance to both topics.
We hear a lot of talk these days about organisations – both public and private – wanting to work with suppliers who “share our values”. That leads to supplier engagement and selection policies that ask firms how they approach all sorts of issues, including carbon reduction, human rights, diversity and inclusion… in fact, the list gets longer every year. In the public sector, we ask bidders to explain the “social value” they are going to bring above and beyond the basic delivery of the contract. Then the prospective supplier responds, saying “yes we have all the right policies, this is how we will help local orphans, and of course we share your lovely warm, caring values”.
It's all become a bit of a game, in that often in reality either the buying firm, the supplier or both are far from the exemplars they would like to make out. Perhaps they don’t pay their bills in time – see this recent report which names and shames some household name firms for paying suppliers after 100 days or more. Or perhaps they are polluters, or exploit their workforce, or have a 100% non-diverse Board?
But what about if it is the owner (or owners) of the firm that are racist, sexist, idiots? Or maybe they enjoy big game hunting, or pay illegal immigrants to indulge their unsavoury sexual fantasies? Is that enough to say you wouldn’t want to buy from that supplier? The reason for this thought process is of course the story of Frank Hester, a huge donor to the Conservative Party who (several years ago) told a meeting of his staff that he was not fond of Labour politician Diane Abbott.
"It's like trying not to be racist but you see Diane Abbott on the TV, and you're just like… you just want to hate all black women because she's there”. And also "I don't hate all black women at all, but I think she should be shot."
Putting aside arguments about racism and sexism, it was just a horrible, deeply stupid thing to say. Other of his comments now reported suggest he is one of those sad bosses who treats his staff as if they were his stand-up audience, whilst the poor employees probably just smile nervously, which he mistakes for enjoyment. But his firm, TPP, is a major software provider to the UK’s National Health Service, providing patient record software to doctors’ surgeries and hospitals.
So could public sector organisations ban TPP from winning future work, or simply boycott the firm, as some in the NHS have suggested? I think it would be difficult. Whilst the new UK Procurement Act does have stronger provisions for stopping firms even bidding than the previous EU regulations, I don’t think it allows “the owner is a d***head” as an allowable reason for barring a company.
The key clauses are in Schedule 7 of the new Act.
“A discretionary exclusion ground applies to a supplier if the decision-maker considers that the supplier or a connected person has engaged in professional misconduct which brings into question the supplier’s integrity”.
Now that sounds promising… some might certainly question Hester’s integrity. But the following clause squashes our hopes.
“A discretionary exclusion ground applies to a supplier if a court, regulator or other authority has ruled that the supplier or connected person has engaged in such professional misconduct”.
So some external authority has to rule that Hester has engaged in misconduct – we can’t just decide that ourselves as buyers. So an accountant being struck off for instance would qualify, I assume. And I don’t see any other grounds for barring TPP.
Perhaps an equally significant question is just how TPP made profit margins of over 60% in 2022 and over 50% in 2023 - yes, that is bottom line net profit before tax. £41 million in 2023 on revenues of £80 million. Amazing. (The decrease in 2023 is odd actually, as it’s largely down to a 50%+ jump in wages and salaries, but without any corresponding jump in numbers employed?) But those TPP margins seem to suggest a gross failure of NHS procurement, if nothing else. I do hope every contract renewal now will be accompanied by a demand for at least a 30% price reduction.
Hester appears to be the only Director, so it’s no surprise he can dish out over £10 million to the Tories, which does raise another question around political party funding. Should people like Hester be able to buy influence like this – because make no mistake, £10 million gets you influence, or a peerage if you’d prefer. Or maybe both.
But coming back to the original issue, forget the racism / sexism / misogyny for a moment. Simply to stand up in front of your own staff and just say something as horrible as that (wanting pretty much anybody to be shot, except for Putin and a few other mass murderers, is pretty horrendous) seems to indicate that you are an individual who “does not share our values”.
So as well as improving the negotiation skills of NHS buyers, do we need to look harder at what we mean by “social value”, and “procurement with purpose”? Should we be looking at the actual words and deeds of firms and owners, not just what they write in the tender documents? Or does this all just get dropped into the “too difficult” bucket?