The new Procurement Act aims to widen the pool of potential suppliers for local authorities, yet ethnic minority-led architectural and design practices in London struggle to win public sector work. Ahead of Future of London’s autumn event, we’re highlighting why diversity in procurement matters.
We spoke with Ethan James, Regional Director, Paul Smith, Regional Procurement Manager, and Shona Snow, Director of Product Innovation, LHC, about why procurement has the power to drive diversity and innovation in the public sector supply chain, and the steps we can take to tackle the barriers to greater diversity.
The power of procurement
Procurement by the public sector is properly subject to legislation to ensure that public bodies award contracts fairly, consistently and transparently. But these rules can act as barriers to smaller businesses, especially those led by underrepresented groups and with a more local focus.
In Future of London’s wide-ranging knowledge projects, procurement is consistently raised as a challenge. Many of our members feel procurement creates systemic and practical barriers. For too long it has been driven by a narrow interpretation of value for money.
Yet – for example in building social value into procurement – changing the way the public sector procures projects and services could have a huge impact on addressing inequalities.
The rule book of public sector procurement is changing with a new Act of Parliament coming into force in February 2025. This aims to improve access to contracts by smaller firms. The legislation also offers a strategic opportunity to local authorities that want to help local and more diverse businesses grow.
The new Act will shape the direction that all industry professionals will be following. But to achieve lasting change, procurement is not just a technical exercise, focused on compliance – we need a different mindset. It has the power to help the public sector achieve a strategic vision for inclusive growth.
Diversity and the design industry
Understanding barriers to diversity in procurement is critically important for London. This is the most ethnically diverse region in England and Wales. In the capital, 46.2% of residents identify with Asian, black, mixed or “other” ethnic groups.
The architecture and urban design industry has never been representative of the wider population. In 2020, the Architects’ Registration Board reported that only 1% of UK architects identified their ethnic group as black.
Lack of diversity can make it harder for architects, designers and developers to earn the trust of local people, to achieve true collaboration and co-design. This can result in buildings and spaces that don’t provide what their users need.
Making procurement more diverse and inclusive can lead to more innovation, with design teams that better reflect the communities they’re serving. In the built environment sector, we need design teams that can relate to and design with and for local people.
To ensure companies are truly diverse, we need to look beyond the rhetoric. Is the project team itself representative of London’s communities? And to create a procurement framework, are we appointing a range of businesses that are diverse in terms of size, location, ownership, employee profile, etc.?
What are the barriers to making procurement more diverse?
Smaller businesses often fail to meet the turnover thresholds, previous experience and professional indemnity requirements put in place in local authority procurement exercises. In London, 27% of small businesses are led by people who don’t identify as being from a white ethnic background.
Focusing on outcomes rather than processes will help local authorities achieve longer-term goals. What are the issues that this community or place faces and what is the best way to respond? If you start with the objectives, you can more easily work back to find the compliant route.
Effective leadership is essential to overcome a lack of confidence or joined-up thinking, and to encourage procurement teams to do things differently by asking the right questions. Alongside better skills and capabilities, we need better use of data to monitor where money is being spent in existing supplier bases.
The Architect Design Services Framework
LHC learned a profound lesson in the importance of designing procurement frameworks that offer a level playing field for local businesses, especially those owned and run by people from global majority backgrounds.
Southwark Council asked LHC to design a procurement framework that provided local authorities, housing associations and other social landlords with access to a broad range of architects.
Early conversations indicated Southwark had an ambitious new homes target, but that most available sites were infill. The council was willing to work with innovative SMEs and micro-enterprises, who could dedicate more time to finding the right bespoke solutions.
However, the first iteration of the Architect Design Services framework, published in 2020, did not include any practices led by black architects. The outcome of the procurement exercise was rightly criticised, for a borough where just under half the population do not identify as being from a white ethnic background.
LHC reevaluated the process at every step, reaching out to networks of architects more representative of Southwark’s diversity. They learned about unique offerings, innovative design approaches and commitment to social value from sitting down and talking at length with these practices.
LHC gathered valuable feedback and insights from architects including David Ogunmuyiwa of Architecture Doing Place; Tara and Lanre Gbolade of Gbolade Design Studio (two of the founding members of Paradigm Network); and Pedro Gil of Studio Gil.
A year after the initial framework was created, LHC was able to announce that 14 practices had been added to the updated framework, including global majority, local and women-led businesses. It also includes an innovative ‘new design’ lot that removes the barriers to public sector work faced by smaller or emerging practices.
Making public procurement more diverse
Procurement has the power to drive diversity and innovation in the supply chain. Involving more diverse voices in design processes will help to solve problems more effectively. What steps do public procurement professionals need to take?
Focus on outcomes
- Think strategically and less transactionally.
- Make your objectives – and the “why” behind them – clear.
- Understanding community needs should shape the entire procurement process.
- Build processes around objectives: don’t wedge objectives into processes.
- Meaningful engagement and co-creation with local people are essential.
Demonstrate leadership
- Be willing to take a risk and try something new.
- Having a shared mission among all stakeholders can help remove barriers.
Ask and listen
- Invest as much time as possible in pre-tender engagement, especially with suppliers from underrepresented groups.
- Gather market intelligence: one-on-one meetings are vital to learn other perspectives.
- Ask questions and listen: sit down with your stakeholders (including internal ones) and ask them to tell you what they want to achieve.
Harness data and AI more effectively
- Tracking data before, during and after procurement on diversity of bidders and suppliers enables accountability and can inform future decisions.
- Technology could make procurement easier for smaller firms, but are we capturing the right data in the right way?
- There is inherent bias in AI and data capture: a critical human eye is needed to interrogate the data provided.
Future of London’s Diversity in Procurement event in October, in partnership with LHC, will highlight best practice on how to increase diversity in public sector procurement of architecture and design services.
It aims to give you some practical tips and tools for using procurement, within existing resources, to increase the diversity of the supply chain and deliver wider local benefits of increased representation.
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