Modern slavery statement

Foreword

Ministerial foreword from Edward Argar MP, Minister of State for Health

Modern slavery remains one of the greatest challenges of our time with millions of people around the world suspected of being trapped within it. We all must play our part in tackling the evil of modern slavery. At the Department of Health and Social Care (DHSC) we deeply care about workers in our supply chains and want to go further to mitigate the risk of modern slavery.

Working not only in our own department but across government too, my officials will continue to take action to work with suppliers to identify modern slavery risks and eliminate them from our supply chains.

This, our first modern slavery statement, baselines our standards as a department and demonstrates the depth and breadth of the buying activities across the department. Now as part of an annual reporting cycle, this statement will form the basis of our approach, ensuring that the taxpayers’ pound is not helping criminals profit from vulnerable people.

This statement is our commitment to continue to fight modern slavery and contribute to bettering the lives of millions of people around the world.

Melinda Johnson, DHSC Commercial Director and anti-slavery advocate

Millions of children and adults are trapped in slavery around the world, including the UK. As the anti-slavery advocate in DHSC, I am a strong champion for anti-slavery practices. The department fervently echoes the sentiments outlined by the Prime Minister in the 2019 to 2020 UK government modern slavery statement: we have a clear responsibility to ensure British taxpayers' money does not inadvertently fund criminal activity and to protect vulnerable workers in our supply chains from exploitation.

The sad truth is that modern slavery is so pervasive it is likely to exist in the supply chains of the goods and services purchased by government. DHSC, its arm's length bodies (ALBs), executive agencies and the NHS, account for a considerable amount of spend within public sector procurement. The supply chains within the health system are varied, complex and far reaching, presenting risks of modern slavery throughout. It is no longer sufficient to state a zero tolerance approach; instead, we commit to take active steps to eradicate any trace of modern slavery in our supply chains and monitor this throughout the life cycle of our contracts. Our promise to set an example, to share best practice, train our commercial professionals and to engage throughout the health system to promote said practices.

Background

In March 2020, the UK became the first country to publish a government modern slavery statement, which sets out the steps that central government took in 2019 to eradicate modern slavery and human trafficking. DHSC is fully supportive of the government's objectives and commitments to date, and has now developed its own statement to explain the steps it has taken thus far to identify, prevent and mitigate modern slavery within its own operations and supply chains.

The DHSC supports its ministers in leading the nation's health and social care agenda to help people live more independent, healthier lives for longer. DHSC funds and sets the overall strategy of the health and social care system with and through its agencies and public bodies. The 'health family' is comprised of DHSC and its 14 departmental ALBs. The ‘health system’ encompasses DHSC, its health family, all NHS trusts, NHS foundation trusts, clinical commissioning groups (CCGs) and DHSC companies.

This statement will focus predominately on DHSC activities but will provide a summary review of other ALBs within the health family. A separate NHS England and NHS Improvement (NHSEI) statement has been developed, detailing steps taken by NHS bodies across the health system to combat modern slavery and support its victims.

DHSC is a ministerial department of the UK government, with offices currently located in London, Leeds, Burnley, Reading and Runcorn. The total full-time equivalent employees as at July 2021 was 4,253, of which 3,944 are employees and 310 are contingent labour and agency staff. The total headcount of commercial staff is 128. Of the 128, there are 59 employed in the procurement team and 36 employed in the commercial capability and supply management team.

As the accounting officer for the DHSC, Permanent Secretary Sir Chris Wormald has overall accountability for this statement. This statement covers the period from 1 April 2020 to 31 March 2021. This statement does not cover the Vaccines Taskforce (co-owned by BEIS), personal protective equipment (PPE) or UKHSA (formerly Public Health England (PHE) and Test and Trace) contracts. However, some indication of preventative steps taken in relation to these areas are included in this statement. As outlined later in this statement, all areas outlined above will be covered in 2022 statements.

Structure, business and spend

DHSC spend and supply chain

A total of £150.7 billion was allocated to the health system for the financial year 2020 to 2021, the majority of which was directed to NHSEI for spend supporting the primary and secondary health organisations, and supporting specialised and localised commissioning for public health services. The remainder was divided among the other ALBs and the department itself. This does not include the additional funding provided to DHSC for the response to the COVID-19 pandemic.

As of 31 August 2021, DHSC held 280 contracts that were both procured on a regular basis and are non COVID-19 related (referred to as BAU (business as usual) contracts). Of the 278 BAU contracts, 16 were categorised as ‘gold’ (75%+ overall weighted risk), 39 were ‘silver’ (60 to 74% overall weighted risk), 199 were ‘bronze’ (30 to 59% overall weighted risk), 15 were ‘transactional’ and 9 were ‘unclassified’. These categories are based on the criticality of the contract. Those contracts which either carry the highest cost or would put the department at the greatest risk were they to fail are categorised as ‘gold’ – these contracts receive higher scrutiny and assurance than bronze-rated contracts. As of 31 August 2021, DHSC held 708 active COVID-19 contracts. Of the 708 COVID-19 contracts, 42 were for PPE and ventilation, 144 were for professional services, logistics and medicines and 522 were for Test and Trace.

DHSC allocates most of its funding in the following categories:

  • clinical and medical
  • professional services (including contingent labour)
  • logistics and industrial services

As of 30 June 2021, the majority of DHSC's suppliers reported their head office locations as UK based. Of all contracts, 221 head office locations were in the UK, one was in Holland, one was in Sweden and one was in the USA. This data was taken from the supplier address details contained within our e-tendering portal, Atamis. Given the scale of their businesses, some of the UK-based suppliers will also have smaller offices or operations outside of the UK.

Companies

As of June 2021, DHSC fully owns 6 companies (NHS Property Services; Community Health Partnerships; NHS Professionals; Supply Chain Coordination Ltd; Porton Bio Pharma; Genomics England Ltd) and owns 50% less one share in a joint venture with Sopra Steria (NHS Shared Business Services Ltd).

These companies were established to meet particular NHS requirements that were not being met by 'the market' or by other NHS bodies: to facilitate NHS restructuring, such as the 2012 NHS reforms; or to facilitate commercialisation and value release from a DHSC or NHS activity.

Each company that reaches the criteria for the requirement under section 54 of the Modern Slavery Act 2015 will publish their own independent modern slavery statements, independent from the department; their activities are not covered by this statement.

Internal departmental advocacy

The role of the anti-slavery advocate is to champion, promote and develop our policies and programmes to address modern slavery in our procurements and contracts. Melinda Johnson, Commercial Director, is the DHSC anti-slavery advocate and has expressed a commitment to identifying and mitigating risks of modern slavery in DHSC's supply chains.

To ensure that focus on modern slavery is maintained across all commercial directorate teams, DHSC has set up a committee to focus on this issue. This includes representatives from the procurement team, contract management team, commercial advice and policy implementation team and procurement policy team. Their work includes evaluating terms and conditions, creating and enforcing a supplier code of conduct and generally engaging and educating the directorate on modern slavery issues.

DHSC has also set up a health family stakeholder group to ensure a cohesive approach to the Modern Slavery statement. This includes representatives from PHE, NHS Supply Chain (NHS SCCL), NHSEI and DHSC.

These groups are essential in the debate on and the dissemination of modern slavery standards across the health family. These conversations form the basis of the changes to contractual terms and conditions, commercial guidance, policy and advice across government.

Policies in relation to modern slavery

The DHSC procurement policy states that all DHSC procurements regardless of value must adhere to the principles of transparency, equal treatment, non-discrimination and proportionality. It aligns to all Cabinet Office procurement policies. Further to this, commercial activities are assured by the central government public procurement policy and guides such as managing public money and the Civil Service code. The DHSC procurement policy requires that the transparency in supply chain guidance is embedded in all procurements. Where there is high risk of modern slavery in the supply chain, the policy requires that identified risks and mitigating actions are captured in the procurement strategy. Procurement strategies are required for every procurement.

DHSC standard terms and conditions of contract include clauses which impose obligations on the contractor to mitigate against modern slavery risks in supply chains. These clauses adopt the recommendations and best practices referred to in the Modern slavery procurement guidance published alongside PPN 05/19 and equivalent clauses included in government standard contracts such as the Cabinet Office Mid-Tier contract and the Crown Commercial Services Model Services Agreement.

DHSC relies on its suppliers for the delivery of many important public services and it expects the highest standards of business ethics from all suppliers in partnership with the department. DHSC utilises the government code of conduct when setting supplier standards and behaviours. A health family-wide supplier code of conduct is being developed and will be referred to in the next statement.

Procurement Policy Note (PPN) 06/20, published by Cabinet Office in September 2020, mandates that all central government procurements covered by the public contracts regulations 2015 must include 10% evaluation criteria solely for social value themes, one of which is modern slavery. The proportion of procurements selecting modern slavery as a key social value theme will be reported upon in the next statement.

DHSC and related agencies adhere to the Civil Service management code and the Civil Service human resources policies and guidance in relation to employment of civil servants.

Risk assessment and due diligence

Modern slavery can affect virtually any industry and country; DHSC is working to target action where risks of exploitation are most severe, salient and strategic, in line with UN guiding principles on business and human rights. DHSC is, in the main, a policy making department. Pre-pandemic, this resulted in the majority of procurements being purchased through Crown Commercial Service (CCS) frameworks or Dynamic Purchasing Systems (DPS). Much of the high-profile media attention focused on modern slavery in health supply chains concerned PPE. For the purposes of this statement, PPE has been separated from BAU DHSC spend. UKHSA spend has also been separated from this statement.

In April 2021, initial risk assessments of the 38 gold and silver contracts and procurement activities existing at that time were undertaken in all category areas. The majority of contracts and procurements within DHSC returned a low or very low risk of modern slavery:

  • 23 silver contracts and procurements returned very low risk
  • 7 gold contracts and procurements returned very low risk
  • 7 gold contracts and procurements returned low risk

There was one silver contract that was identified as medium risk. This contract returned a low risk rating the previous year, however, after contacting the supplier the office location had moved, increasing the risk level. All due diligence was carried out and the supplier provided the totality of their modern slavery policies and standards, which were exceptionally detailed and provided an acceptable level of assurance. The department intends to continue to assess the presence of modern slavery risk at the outset of all procurement activities.

In June 2021, the department carried out modern slavery risk assessments on all strategic procurements that were in the process of tendering or live at the point of writing the statement:

  • one gold live procurement was deemed low risk
  • 4 silver live procurements were deemed low risk
  • one silver live procurement was deemed high risk

The high-risk procurement was further assessed and analysed, and new requirements were added into the selection questionnaire (SQ) to mitigate this risk. The contractual terms and conditions were also bolstered to include more stringent modern slavery terms and the modern slavery theme was selected as the 10% optional social value criteria.

CCS (Crown Commercial Service) frameworks

A large portion of DHSC commercial activities involve CCS frameworks which are awarded and managed centrally within the CCS. In 2019, CCS carried out a detailed risk assessment of all its commercial agreements. The risk assessment categorised 26 commercial frameworks as having a high or medium risk of modern slavery. DHSC commercial has used 5 of these frameworks.

DHSC currently holds 5 framework call-off agreements that CCS deems to be high risk or medium risk for modern slavery:

  • the multifunctional devices, managed print and content services and records and Information management (RM3781) Lot 4 framework is deemed to be medium risk
  • the courier services (RM 3798) lots 1,2,3 and 5 framework is deemed to be medium risk
  • the facilities management services (RM 1056) framework is deemed to be medium risk
  • the public sector resourcing (RM3749) framework is deemed to be high risk
  • the technology products 2 (RM3733) lot 5 and 6 framework is deemed to be high risk

All suppliers of these frameworks were invited to complete the cross-government Modern Slavery Assessment Tool (MSAT). CCS have discussed results with suppliers and continue to monitor the implementation of the recommendations. All of the 5 framework call-offs identified above have also undergone a further risk assessment within DHSC for modern slavery.

Next steps

  1. DHSC's next steps will include expanding its assessment to all bronze-level contracts and lower-level spend procurements in next years' statement. This will increase the breadth of its reporting and help capture risks in lower tiers. It will endeavour to work with strategic suppliers to map their lower tier suppliers also, to begin the process of comprehensive supply chain mapping.
  2. DHSC will create a modern slavery risk register that will capture any key risks from its risk assessments and assign responsible owners to oversee the register.
  3. The new government modern slavery policy, published in April 2021, mandated that all procurements must consider modern slavery risks throughout a contract life cycle. All new procurements must include a modern slavery risk assessment rating, and, if there is a requirement that is deemed to be high risk, the supplier must undertake an MSAT assessment. All DHSC procurement activity will now adhere to these requirements.
  4. Furthermore, DHSC will continue to be an active member of the Five Eyes international group (consisting of 5 countries: USA, UK, New Zealand, Australia and Canada) to share knowledge on key areas of medical supply chains. The objectives of the group are to:
  • bring together subject matter experts from across our 5 administrations to analyse common challenges in medical supply chains
  • create a forum to exchange best practice and lessons learned from the pandemic
  • identify practical areas of co-operation that senior officials can discuss at the Five Eyes Medical Co-ordination group

Spend external to DHSC BAU

UKHSA

In July 2020, DHSC created a new directorate exclusively to purchase Test and Trace related services and goods. As the need for tracing services begins to diminish with the easing of the pandemic, the department is reassessing the need for this buying capability in its core procurement function. As such, in October 2021 the Test and Trace buying cell merged with PHE to form the new UK Health Security Agency (UKHSA). This agency’s focus to ensure that the UK is prepared against any future pandemic threats. The need for supply chain mapping and an audit of PPE related contracts will be assessed as part of the first UKHSA statement, to be published in September 2022.

PPE

In March 2020, it was recognised that due to the global surge in demand for PPE, the market was becoming much more favourable to suppliers rather than buyers. DHSC was already aware that PPE was a high-risk area due to the challenges in garment factories (as detailed in a case study by Impactt). To combat modern slavery concerns, DHSC engaged widely with NHS SCCL, NHSEI, Home Office, Cabinet Office and Foreign and Commonwealth Development Office. Additional training and guidance were rapidly created and distributed to strengthen buying professionals’ knowledge of modern slavery risks specific to the pandemic. Working with Home Office colleagues, DHSC participated in a cross-government project to increase the modern slavery awareness of procurement professionals with enhanced PPE buying guidance and training. This also included supplier training and workshops.

One key area of concern during the pandemic was that of rubber gloves. A number of preventative steps have been undertaken to address modern slavery within the rubber glove, apron supply chain, including:

  • engaging and auditing suppliers
  • working with auditors to improve auditing approaches
  • working with researchers (University of Newcastle, Impactt and the British Medical Association) to better understand the forced labour fragilities within supply chains
  • training buyers/category managers and contract managers
  • working in partnership with suppliers to make tangible improvements to worker conditions if any issues are identified
  • building additional clauses into contracts
  • seeking ethical policy statements from other suppliers confirming their positions and reiterating our intolerance for such labour practices

The need for supply chain mapping and an audit of PPE related contracts will be assessed next year and any findings published in their 2022 statement.

Training and awareness raising

In the DHSC monthly Procurement Policy newsletter and Procurement Policy Cascade (targeted at DHSC commercial staff and the wider health family and health system), we communicate modern slavery updates such as the introduction of PPN 05/19 and raising awareness about modern slavery risks related to PPE procurements during the pandemic.

DHSC developed training on modern slavery and delivered the training in an interactive session to all procurement staff in the department. The training was based on information from PPN 05/19 and focused on how to assess modern slavery risks, use the MSAT, include modern slavery in award criteria and KPIs, ensure supplier compliance with section 54 of the Modern Slavery Act 2015 and how to work more collaboratively with suppliers.

All relevant staff are required to complete the CIPS Ethical Procurement and Supply eLearning and test. Through 3 topics (environmental procurement; fraud, bribery and corruption; human rights) the eLearning raise awareness of how more sustainable and ethical outcomes can be achieved through ethical procurement. As of 22 June 2021, 100% of all commercial staff have completed the eLearning assessment and received a CIPS Professional Ethics certificate.

Goals and KPIs

Goals

This section provides an overview of the department's performance against the goals set out in the government's Modern Slavery Statement. All outstanding goals will be monitored and completed during the reporting year 2021 to 2022.

Goal Progress
1 Appoint anti-slavery advocates at director level in each department to help co-ordinate their activity and increase awareness of action their department should take Complete
2 Invite major suppliers in high-risk areas to complete the Modern Slavery Assessment Tool Complete
3 Review, and where relevant amend, procurement policies following publication of Procurement Policy Note 05/19 Complete
4 Begin or continue contract risk assessments to ensure action plans are targeted Completed initial checks of gold and silver contracts. Approach to checking of bronze contract portfolio in progress
5 Develop own KPIs to help understand whether the action we are taking is working well and where we need to improve Complete
6 Begin mapping tier 2 suppliers for high-risk supply chains No high-risk supply chains have been identified for DHSC Core Commercial. DHSC intends to support PPE and NHSTT in the assessment of their high-risk supply chains.
7 Participate in training (to build capacity internally) and cross government working groups to collaborate on common interests Complete

KPIs

This section sets out DHSC's KPIs for the next financial year as part of our efforts to continuously improve how we tackle modern slavery in our supply chains.

1. Ensure all in-scope Commercial Directorate staff complete the CIPS ethical training module – target 100% by end March 2022.

2. Ensure all in-scope Commercial Directorate staff complete the new Government Commercial College modern slavery e-module ("Tackling modern slavery in supply chains") – target 100% by end March 2022.

3. Ensure MSAT training is available to relevant roles in Commercial Directorate (Procurement and Contract Management) and delivered to meet requirements throughout 2021 to 2022.

4. For any gold or silver contracts identified as medium-high risk, begin mapping tier 2 suppliers for high risk supply chains by end March 2022.

5. Obtain supply chain maps for all high-value/high-risk (gold) contracts by end of March 2022.

6. Obtain supply chain maps within first 12 months of contract award for new procurements classified as gold contracts.

7. Design approach to assessing and identifying MSA risk within current bronze contract portfolio and implement by end March 2022.

8. Continue to attend and actively participate in cross-government working groups, including Five Eyes and the Modern Slavery Policy Implementation Group and support initiatives to improve collaboration on high-risk sectors.

This statement was approved by the Executive Committee on 14 October 2021.

The statement was signed by Sir Chris Wormald KCB, Permanent Secretary, 20 October 2021, and by Edward Argar MP, Minister of State for Health, 25 October 2021.

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