Southwark Council has set out plans to make contractors reveal how much they pay black, Asian and minority ethnic (BAME) workers in comparison to their white counterparts.
The changes, which will take effect in the coming financial year, will only apply to contractors with 50 plus employees.
Whereas larger contractors with more than 250 employees will be required to disclose their BAME pay gap with an accompanying annual plan on how they intend to reduce any differences. Organisations of the same size will also have to publish their gender pay gap and the corresponding document outlining possible reduction strategies under the rule changes.
These plans will then be made publicly available in the council’s Contracts Register, which is published online.
The proposals are contained in the council’s Fairer Future Procurement Framework, which lays out the rules for those doing business with the council.
Southwark Council spends approximately £650 million every year on external contractors delivering a variety of goods, works and services.
“This spending power means that the council can – and should – use its financial influence for ethical and sustainable impact and for outcomes that increase social value,” read the council document.
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It added: “The council expects all of its procurement activity to be undertaken to the highest ethical, sustainable and responsible standards and within a robust and transparent governance and financial framework.”
The council said it will explore further how to best enable BAME organisations to participate in procurement opportunities. Under its Public Sector Equality Duty the council must consider quality issues and human rights in its procurement and commissioning.
Southwark Council has come under fire in the past for paying its own BAME employees considerably less on average than white staff.
For every £10 that a BAME member of council staff gets on average, a white employee gets £11.47 – an ‘ethnic minority pay gap’ of 14.68 per cent.