Businesses urged to 'do more' to win public contracts

Businesses looking to secure public sector contracts will need to do more to help improve society, the UK government is set to announce.

Ministers want firms to tackle issues like modern slavery and climate change.

The UK, which spends £49bn with outside organisations every year, will also try to award more contracts to small firms.

It is "morally right" for the UK to make certain demands of companies taking taxpayers' money, Cabinet Office minister David Lidington will say.

When drawing up public contracts, the government will now be looking at:

• Firms that employ people from diverse backgrounds, including those with disabilities and from ethnic minorities

• How companies reduce modern slavery and cyber-security risks in their supply chains

• Businesses that are focused on environmental sustainability

• Companies that boost employees' employability potential through staff training

However, the government stressed that the changes to public procurement would not add complexity or increased costs to the process.

"By making sure that these social values are reflected not just across the government, but through all the companies we work with, we will take a major step towards our goal of creating an economy that works for everyone," Mr Lidington will say.

'Stop bidding wars'

Charity Anti-Slavery International has welcomed the UK's efforts to stamp out modern slavery, but it wants to see the government do even more.

Modern slavery is occurring across the UK, with a higher percentage of incidents in industries such as domestic work, construction, agriculture, catering and hand car washes.

Construction is an industry where modern slavery occurs in the UK

"At the moment big businesses are made to report slavery in the supply chain, but there are no penalties for either failing to submit the statement, or whether you report that it exists," Jakub Sobik, a spokesman for Anti-Slavery International told the BBC.

Modern slavery is merely at one end of a spectrum of exploitative practices, and steps need to be taken to combat the practice of forcing employees to work overtime due to unrealistic targets, he added.

The government also needs to stop companies from driving the price down during the bidding process.

"We would like the government to make sure that the price they pay is right for the services," said Mr Sobik.

"If the price they're being paid for the services is not high enough to make sure they pay the staff fairly - this is one of the reasons that companies might use exploitative practices."