Procurement in a Nutshell – Draft Modern Slavery Regulations

Please click here to review the draft Regulations.

Background

On 21^st November 2024, the Department for Health and Social Care (DHSC) launched a consultation on the draft National Health Service (Procurement, Slavery and Human Trafficking) Regulations 2024 and their accompanying guidance.

The draft Regulations follow a review of modern slavery in NHS supply chains, completed in December 2023, which found that more than 21% of NHS suppliers were at a “high risk” of involving modern slavery. Surgical instruments, gloves, gowns, uniforms and face masks were identified as the five highest-risk products.

The draft Regulations will apply to NHS bodies as well as any public body that is procuring goods or services for the purposes of the health service in England, such as local authorities (including those in a Section 75 partnership arrangement).

It should also be noted that the draft Regulations have been drafted to align with the Procurement Act 2023 (PA 2023) and Provider Selection Regime (PSR).

Key obligations

The draft Regulations require in-scope public bodies to:

• Complete a modern slavery risk assessment prior to advertising a contract opportunity where a competitive tendering procedure is being used or, where competition is not used, prior to the contract being awarded to the supplier.
• Where risks are identified, take reasonable steps to address and where possible eliminate the identified risks.
• Take specific steps to reassess the extent of the modern slavery risk when managing a framework or dynamic market.

The duty to take reasonable steps

As previously mentioned, following the completion of a modern slavery risk assessment, in-scope bodies must take reasonable steps to minimise any identified risks.

The draft guidance states that any reasonable steps taken in response to an assessed risk must be proportionate and relevant to the contract, framework agreement or dynamic market.

The guidance details what reasonable steps in-scope bodies will be expected to take depending on the level of risk identified. For example, where a low risk of modern slavery is highlighted in a risk assessment, then the public body is expected to follow the relevant standard procurement process (as established under the PA 2023 or the PSR) and ensure that the resulting contract uses the NHS standard terms and conditions so that the appropriate modern slavery clauses are included. The guidance goes on to outline the steps that should be taken in response to a medium or high risk of modern slavery.

Public bodies can deviate from the minimum requirements set out in the guidance but only when they have carried out sufficient market engagement to demonstrate and justify a change in approach.

In-scope bodies are therefore advised to maintain thorough record keeping practices in relation to modern slavery risk mitigation activities. The guidance is clear that NHS England may review the implementation of the Regulations in the future and contracting authorities should be ready and able to report on modern slavery management activities where possible.

Reassessment of risk

As modern slavery risks can change over the lifetime of a contract, in-scope bodies must have in place mechanisms to ensure a change in risk can be identified and managed throughout the contract, framework or dynamic market.

Regulation 10(3) sets out a statutory requirement to reassess where at least one of the following is true:

• there is reason to suspect that the most recent risk assessment is no longer valid;
• there has been a significant change in the contract, framework agreement or dynamic market to which the risk assessment relates;
• any steps taken in relation to the management of the framework agreement or dynamic market show it to be necessary.

What does this mean?

Contracting authorities should familiarise themselves with the draft Regulations and their accommodating guidance so that they are ready to implement the key obligations they introduce. As previously advised, in-scope bodies should review their recording keeping mechanisms to ensure that any risk assessment, and consequential risk management steps, are throughout documented.

For further information please contact Melanie Pears or Tim Care in our Public Sector Team.