Authors: Fiona Hunt, Dora Homoki, Alex Yeung
Date: March 2021
This is our latest research into the gender pay gap in public contracting for the UK. Our research is designed to identify the existing pay gap in the dynamic between public sector buyers and suppliers.
The pay ‘gap’ is calculated as the difference between average hourly earnings (excluding overtime) of men and women as a proportion of men’s average hourly earnings (excluding overtime).
Our research is currently limited to the £292bn ($404bn) spent by the UK public sector every year. However, this work should stand as an exemplar of what can be achieved when reliable open data on procurement and companies is published by governments. We would encourage any governments that would like to achieve more with their procurement data to get in touch.
As part of our analysis, we found that the gender pay gap across the UK was 11.47%. This means that women are paid 88p for every £1 that men are paid. This 11.47% is the average of the median hourly pay report of every organisation’s most recent report.
Spend Network is pleased to release our survey of the gender pay gap data in public procurement. We linked gender pay gap reports from over 2,600 organisations with our database of contract and spend data. We looked at almost 31,000 contracts won by these organisations during the 2017-2020 period. This gave us insight into whether public money is going to organisations, what gender pay bias existed in those organisations and the extent of this phenomenon across all public contracting.
This report would not have been possible without the amazing work of our partners at Open Contracting Partnership and Open Ownership. Their work in opening up procurement and company data in the UK and around the world as well as maintaining open data standards has been a critical enabler for this work.
Value of contracts going to companies according to gender pay gap bias, measured in %.
Value of contracts going to companies according to gender pay gap bias, measured in %.
Hourly wages (median) pay gap, pence paid more to men | Pay gap favours men | Pay gap favours women |
Contracts awarded to companies by value (%) | 93.92% | 6.09% |
Value of contracts going to companies according to gender pay gap bias, measured in %.
Sources:
Spend Network database of contracts, all contracts are aggregated from official sources such as Contracts Finder and other publishing portals.
The Companies House register of UK companies: https://find-and-update.company-information.service.gov.uk/
The UK Government’s open data on gender pay: https://gender-pay-gap.service.gov.uk/
Scope:
All published contracts between 2017 and 2020 and latest gender pay gap reporting for companies winning contracts.
Description:
Data on contract awardees was linked to Companies House data using a combination of automated and manual matching. Using identifiers from Companies House data we were able to link contracts to gender pay reporting, and examine all the companies that won tenders and had a gender pay gap bias of >1% towards men. The sum value of these contracts were used to establish a percentage figure.
Our research clearly shows that there is a significant bias towards men both in the delivery of public services and that this bias increases once public services are outsourced to the private sector.
92.57% of the money government spent with suppliers between 2017 and 2020 went to companies with a pay bias in favour of men. Organisations with a ‘low’ bias across genders, that is to say between 1% and 10%, make up only 34.15% of contracting.
Gender bias in pay is overwhelmingly skewed towards men. 67.65% of the contract value goes to firms that pay men 10% more than women. Whilst over 45% of contracts by value go to organisations with a pay bias greater than 20%. Meanwhile suppliers with a female bias of 10% or more accounts for less than 1% (0.96%) of the value of contracts being let.
When compared with the national average for all reporting organisations (11.47%) we found that across all suppliers to the public sector there is a larger pay bias towards men (12.61%) than average. By contrast, public sector organisations do considerably better with an average median pay gap of 9.85%.
The average gender pay gap bias of different types of organisation, measured in percent (%).
The average gender pay gap bias of different types of organisation, measured in percent (%).
Comparison group | Median pay gap |
National average | 11.47% |
Strategic suppliers | 17.72% |
All public sector suppliers | 12.61% |
Major government departments | 9.85% |
The average gender pay gap bias of different types of organisation, measured in percent (%).
Sources:
Spend Network database of contracts, all contracts are aggregated from official sources such as Contracts Finder and other publishing portals.
The Companies House register of UK companies: https://find-and-update.company-information.service.gov.uk/
The UK Government’s open data on gender pay: https://gender-pay-gap.service.gov.uk/
Scope:
All published contracts between 2017 and 2020 and latest gender pay gap reporting for companies winning contracts.
Description:
Data on contract awardees was linked to Companies House data using a combination of automated and manual matching. Using identifiers from Companies House data we were able to link contracts to gender pay reporting, and examine all the companies that won tenders. We also linked UK public bodies to our database of public entities which are hierarchically linked (e.g. Highways Agency is listed as subordinate to Department for Transport). We took the latest results for all the organisations that reported gender pay, segmented by their status (e.g. central government, strategic supplier, public sector supplier) and calculated the average median pay bias.
To calculate pay gap averages we have taken reporting from different points in time, including submissions by companies from 2021, 2020 and in some cases 2019. This explains why our figure for the national average differs from the ONS’ reported figures of 15.5% for April 2020. Relaxing the mandate to publish pay gaps due to the Covid-19 pandemic has undoubtedly impacted the completeness of data and we feel that this is the most appropriate way to measure the national average in the context of this research.
In order to establish a consistent pay gap for each ministerial department, we took the latest pay gap reports for each available ministerial department and the reports published by non-departmental bodies governed by that department. So for instance, the figure for DCMS takes reporting from the department itself and for Sport England and other non-departmental bodies before calculating an average pay gap for the whole department.
Of the 24 ministerial departments, nineteen report their gender pay gap data, smaller organisations such as Number 10 Downing Street and The Northern Ireland Office do not meet the threshold of more than 250 employees and so don’t report.
Our analysis shows a significant bias in favour of men (9.85%), but that this bias is better than the national average for all organisations reporting a pay gap (11.47%). However, eight of the nineteen departments that report are performing above this national average, and the Department for Transport maintains a gender pay gap (20%) that is more than double the average for the departments as a whole.
Only three departments have a pay gap bias of less than 5% in favour of men and only Her Majesty’s Treasury have a gender pay bias in favour of women.
Clearly performing better than the average is to be applauded, however there remains a question about whether the government is willing to examine the performance of its suppliers and to start to demand better performance from them.
Comparing the UK’s ministerial departments and their departmental bodies compare on the gender pay gap, measured in %.
Comparing the UK’s ministerial departments and their departmental bodies compare on the gender pay gap, measured in %.
Central Government | Average gender pay gap |
Attorney General's Office | 1.07% |
Cabinet Office | 11.58% |
DCMS | 4.15% |
DfE | 8.13% |
DEFRA | 9.73% |
DExEU | 12.33% |
DFID | 7.48% |
DIT | 10.23% |
DfT | 20.30% |
DWP | 16.82% |
DHSC | 11.88% |
BEIS | 12.59% |
FCO | 11.07% |
HM:Treasury | -3.86% |
Home Office | 9.64% |
Ministry of Defence | 9.57% |
MHCLG | 12.96% |
MoJ | 9.20% |
UK Export Finance | 12.00% |
Comparing the UK’s ministerial departments and their departmental bodies compare on the gender pay gap, measured in %.
Sources:
The UK Government’s open data on gender pay: https://gender-pay-gap.service.gov.uk/
The UK Government’s list of organisations: https://www.gov.uk/government/organisations
Scope:
Most recent gender pay gap reporting for ministerial departments and their sub-entities.
Description:
We gathered the most recent reporting for each of the ministerial departments, where they meet the threshold for publishing, along with the reporting for all of the department’s sub-entities, including non-ministerial departments, advisory non-departmental public bodies, executive agencies, executive non-departmental public bodies and other agencies. We then took a median gender pay gap for the group of reporting organisations.
This disparity is starker still when looking at strategic suppliers. Strategic suppliers are those organisations that the government’s Crown Commercial Service function has identified as critical to the delivery of public services and subsequently that their financial stability and their performance could impact the delivery of public services. As a result these suppliers are tasked with additional reporting and with a ‘Crown Representative’ who liaises with the company to ensure that contracts are delivered effectively.
We took the most recent pay gap reporting for companies that are part of these groups that have won contracts between 2017 and 2020 and then calculated the average pay gap for each supplier.
We found across all of the strategic suppliers, there was an average median pay gap of 17.72% demonstrating that these critical suppliers have a greater gender pay gap than the average for the wider economy (6.2% more) and a greater average than the rest of the companies trading with the public sector (5.22% more).
As of writing, both Sopra Steria and PWC have maintained an average pay disparity of more than 30% in favour of men. Thirteen strategic suppliers have a median pay bias towards men of more than 20% and across all strategic suppliers, the average median pay bias towards men is 17.72%. The bulk of strategic suppliers’ pay gap is around the 10-20% mark. At the extreme end, six strategic suppliers have a pay gap bias of over 25%.
What is most striking is the clear differential between similar suppliers, for instance PWC reports a gender pay gap which is more than double that of Deloitte. Vodafone reports a gender pay gap which is double that of BT. Undoubtedly some of the pay gaps are linked to the type of work being done and the company structures employed by different suppliers, but it is clear that at some level this disparity is down to the individual hiring and compensation decisions within the companies.
How the UK’s strategic suppliers compare on gender pay gap, measured in %.
How the UK’s strategic suppliers compare on gender pay gap, measured in %.
Strategic supplier | Average gender pay gap |
ACCENTURE | 9.80% |
ATKINS | 18.00% |
ATOS | 29.70% |
AWS | 20.10% |
BABCOCK | 16.83% |
BALFOUR | 23.00% |
BT | 8.35% |
CAPGEMINI | 18.00% |
CAPITA | 23.33% |
CGI | 12.40% |
COMPUTACENTER | 18.60% |
DELOITTE | 14.70% |
DXC | 26.00% |
ENGIE | 27.38% |
FUJITSU | 11.60% |
G4S | 5.86% |
IBM | 14.70% |
INTERSERVE | 16.62% |
ISS | 6.50% |
JACOBS | 27.45% |
KBR | 29.00% |
KIER | 17.65% |
LEIDOS | 18.50% |
MICROSOFT | 10.20% |
MITIE | 3.01% |
MOTOROLA | 12.30% |
MOTT | 19.45% |
ORACLE | 17.20% |
PWC | 31.70% |
SERCO | 10.40% |
SODEXO | 23.80% |
SOPRA STERIA | 39.40% |
VIRGIN | 7.40% |
VODAFONE | 19.20% |
AMEY | 17.58% |
ERNST & YOUNG | 17.95% |
KPMG | 20.87% |
LAING O'ROURKE | 8.90% |
How the UK’s strategic suppliers compare on gender pay gap, measured in %.
Sources:
Spend Network database of contracts, all contracts are aggregated from official sources such as Contracts Finder and other publishing portals.
The Companies House register of UK companies: https://find-and-update.company-information.service.gov.uk/
The UK Government’s list of strategic suppliers: https://www.gov.uk/government/publications/strategic-suppliers
The UK Government’s open data on gender pay: https://gender-pay-gap.service.gov.uk/
Scope:
Contracts awarded between 2017 and 2020, latest gender pay gap reporting.
Description:
We took records for contracts awarded to strategic suppliers, grouping these suppliers according to different companies (e.g. MITIE Facilities, MITIE Security), having grouped companies together we calculated a median gender pay gap across these group of companies for each strategic supplier. Our aggregation is based on the companies that have been awarded contracts, not on all of the companies reporting for a group of companies, so the gender pay gap for Price Waterhouse Coopers LLP is recorded, but no pay gap is recorded for Price Waterhouse Coopers Services Ltd because there are no records of contracts being awarded to this entity. Our work therefore shows an average pay gap for the companies winning business with the public sector, we do not take into account the value of contracts different companies have won, or the number of employees in different companies.
By contrast, for the nineteen ministerial departments that report their gender pay status once an average is taken for their departmental bodies their sub-entities eighteen have pay bias towards men. Across all ministerial departments the average pay gap is 9.85%, with the Department for Transport having a pay gap of 20.30%. Nonetheless, it is clear the government has a sizeable pay gap, with a bias towards men in the all reporting departments except HM Treasury, which has a slight bias toward women (-3.86%).
In the associated violin chart, we’ve compared the gender pay gap of strategic suppliers and ministerial departments, highlighting the average pay gap in each group of organisations.
Our figures show that the ministerial department’s pay gap distribution is more concentrated and that the departments consistently perform better than strategic suppliers, with only one ministerial department having a pay gap that exceeds the average pay gap of the strategic suppliers.
During the period 2017-2020, these suppliers won an estimated 30% of Government contracts by value. We estimate from the published data that these suppliers won contracts to a value of approximately £159bn.
Pay gap comparison between ministerial departments in government and the 38 strategic suppliers the gender pay gap of strategic suppliers and governments departments. The left axis is the pay gap, with zero indicating gender parity, measured as a percentage (%).
Pay gap comparison between ministerial departments in government and the 38 strategic suppliers the gender pay gap of strategic suppliers and governments departments. The left axis is the pay gap, with zero indicating gender parity, measured as a percentage (%).
Type | Pay gap |
Strategic Suppliers | 9.80% |
Strategic Suppliers | 19.20% |
Strategic Suppliers | 18.00% |
Strategic Suppliers | 29.70% |
Strategic Suppliers | 16.83% |
Strategic Suppliers | 10.24% |
Strategic Suppliers | 8.35% |
Strategic Suppliers | 18.00% |
Strategic Suppliers | 23.33% |
Strategic Suppliers | 12.40% |
Strategic Suppliers | 18.60% |
Strategic Suppliers | 14.70% |
Strategic Suppliers | 27.38% |
Strategic Suppliers | 11.60% |
Strategic Suppliers | 5.86% |
Strategic Suppliers | 14.70% |
Strategic Suppliers | 16.62% |
Strategic Suppliers | 6.50% |
Strategic Suppliers | 27.45% |
Strategic Suppliers | 17.65% |
Strategic Suppliers | 18.50% |
Strategic Suppliers | 10.20% |
Strategic Suppliers | 3.01% |
Strategic Suppliers | 12.30% |
Strategic Suppliers | 19.45% |
Strategic Suppliers | 17.20% |
Strategic Suppliers | 31.70% |
Strategic Suppliers | 10.40% |
Strategic Suppliers | 23.80% |
Strategic Suppliers | 39.40% |
Strategic Suppliers | 7.40% |
Strategic Suppliers | 19.20% |
Strategic Suppliers | 19.70% |
Strategic Suppliers | 17.58% |
Strategic Suppliers | 17.95% |
Strategic Suppliers | 20.87% |
Strategic Suppliers | 8.90% |
Government department | 1.07% |
Government department | 11.58% |
Government department | 6.51% |
Government department | 5.07% |
Government department | 4.15% |
Government department | 8.13% |
Government department | 9.73% |
Government department | 12.33% |
Government department | 7.48% |
Government department | 10.23% |
Government department | 20.30% |
Government department | 16.82% |
Government department | 11.88% |
Government department | 12.59% |
Government department | -16.30% |
Government department | 11.07% |
Government department | 10.25% |
Government department | -3.86% |
Government department | 9.64% |
Government department | 9.57% |
Government department | 12.96% |
Government department | 9.20% |
Pay gap comparison between ministerial departments in government and the 38 strategic suppliers the gender pay gap of strategic suppliers and governments departments. The left axis is the pay gap, with zero indicating gender parity, measured as a percentage (%).
Sources:
Spend Network database of contracts, all contracts are aggregated from official sources such as Contracts Finder and other publishing portals.
The Companies House register of UK companies: https://find-and-update.company-information.service.gov.uk/
The UK Government’s list of strategic suppliers: https://www.gov.uk/government/publications/strategic-suppliers
The UK Government’s open data on gender pay: https://gender-pay-gap.service.gov.uk/
Scope:
Contracts awarded between 2017 and 2020, latest gender pay gap reporting.
Description:
We gathered the most recent reporting for each of the ministerial departments, where they meet the threshold for publishing, along with the reporting for all of the department’s sub-entities, including non-ministerial departments, advisory non-departmental public bodies, executive agencies, executive non-departmental public bodies and other agencies. We then took a median gender pay gap for the group of reporting organisations.
We took records for contracts awarded to strategic suppliers, grouping these suppliers according to different companies (e.g. MITIE Facilities, MITIE Security), grouped them together and calculated a median gender pay gap across these group of companies for each strategic supplier. Our aggregation is based on the companies that have been awarded contracts, not on all of the companies reporting for a group of companies, so the gender pay gap for Price Waterhouse Coopers LLP is recorded, but no pay gap is recorded for Price Waterhouse Coopers Services Ltd because there are no records of contracts being awarded to this entity.
£133bn in contracts went to sectors with a pay bias to men of over 22%. These sectors were almost evenly split at £67bn for Architectural and Engineering and £66bn for Construction and Architectural and Engineering.
Business Services saw contracts worth £94bn but has an average pay gap of 13%. The IT and Software categories saw with earnings of £34bn and £21bn respectively, but have pay biases of 19% and 21%.
In fact, of the top 10 categories, which make £340bn by themselves, only one category had a bias to men of less than 10%. This was Health and Social Care, a sector where women can make up to 80% of the workforce, despite this in the companies contracted by government to meet the public sector needs there is a 6% pay gap in favour of men.
Education and training, another sector with high levels of involvement by women, sees a pay gap of 10% in favour of men. Research and consultancy has a pay gap of 17%.
The average gender pay gap against the category of contracts let by public bodies between 2017 and 2020. Total contract value measured in £, gender pay gap measured in %.
The average gender pay gap against the category of contracts let by public bodies between 2017 and 2020. Total contract value measured in £, gender pay gap measured in %.
Type | %age pay gap | Amount Contracted (£bn) |
Business Services | 13 | 94 |
Architectural & engineering | 22 | 67 |
Construction work | 23 | 66 |
IT services | 19 | 34 |
Transport equipment | 12 | 28 |
Telecoms & media | 17 | 24 |
Health & social | 6 | 24 |
Software | 21 | 21 |
Education & training | 10 | 13 |
R&D | 17 | 12 |
The average gender pay gap against the category of contracts let by public bodies between 2017 and 2020. Total contract value measured in £, gender pay gap measured in %.
Sources:
Spend Network database of contracts, all contracts are aggregated from official sources such as Contracts Finder and other publishing portals.
The Companies House register of UK companies: https://find-and-update.company-information.service.gov.uk/
The UK Government’s open data on gender pay: https://gender-pay-gap.service.gov.uk/
EU Common Procurement Vocabulary: https://simap.ted.europa.eu/cpv
Scope:
Contracts awarded between 2017 and 2020, latest gender pay gap reporting.
Description:
To obtain a category for suppliers, we took the leading classification for each contract award notice and rounded these up to the highest level CPV code and took the best fit CPV code based on this data. Contracts were grouped and summed according to these high level CPV codes creating a total value for each category. We then used the Companies House identifiers that we had attributed to the suppliers that won these contracts and used this to gather and analyse each company’s gender pay gap. Finally, a median pay gap was determined for each category.
We also looked at the proportion of women in the top jobs among the highest value procurement categories. We did this by looking at the top quartile of employment, that is to say the 25% highest paying jobs in organisations. Within these 25% of the ‘top jobs’ we look at the split between men and women.
The largest sector, Business Services, saw women in 41% of the top roles. Although seemingly positive and close to equality, the 9% gap from equality needs to be seen in context of this being the largest sector with a 13% pay gap against women.
The next largest categories, Construction and Architecture and Engineering receive between them some £133bn in contracting value. This means that in sectors that both enjoy £66-67bn in contracting value each, women are in 13% (Construction) and 20% (Architecture and Engineering) of the top quartile of employment. In other words, for Construction, only just over one in ten of the top jobs goes to women. For Architecture and Engineering, this figure is one in five.
In fact, a bias against women is seen throughout much of the top 10 categories. With two exceptions, all sectors show a clear bias towards men for the top quartile of jobs. Of those 8 sectors that have a bias towards men, two sectors employed 30% or more women in top quartile jobs. In Business Services and Research and Consultancy, women were in 41% and 35% of the top roles respectively. The remaining 5 sectors have women in 25% or less of the top jobs. This means that for every 3 men in a top paying job there is 1 woman or less. Software and related services have 1 woman for every 3 men at the top. IT services and Telecoms have just over 1 woman for every 4 men at the top.
A comparative analysis of the top procurement categories by £ spend alongside women’s share of top quartile in %.
A comparative analysis of the top procurement categories by £ spend alongside women’s share of top quartile in %.
Type | Women in Top Quartile Jobs (%) | Amount Contracted (£bn) |
Business Services | 41 | 94 |
Architectural & engineering | 20 | 67 |
Construction work | 13 | 66 |
IT services | 21 | 34 |
Transport equipment | 17 | 28 |
Telecoms & media | 21 | 24 |
Health & social | 69 | 24 |
Software | 25 | 21 |
Education & training | 56 | 13 |
R&D | 35 | 12 |
A comparative analysis of the top procurement categories by £ spend alongside women’s share of top quartile in %.
Sources:
Spend Network database of contracts, all contracts are aggregated from official sources such as Contracts Finder and other publishing portals.
The Companies House register of UK companies: https://find-and-update.company-information.service.gov.uk/
The UK Government’s open data on gender pay: https://gender-pay-gap.service.gov.uk/
EU Common Procurement Vocabulary: https://simap.ted.europa.eu/cpv
Scope:
Contracts awarded between 2017 and 2020, latest gender pay gap reporting.
Description:
To obtain a category for suppliers, we took the leading classification for each contract award notice and rounded these up to the highest level CPV code and took the best fit CPV code based on this data. Contracts were grouped and summed according to these high level CPV codes creating a total value for each category. We then used the Companies House identifiers that we had attributed to the suppliers that won these contracts and used this to gather and analyse the percentage of women employed in the top quartile at each company. Finally, an average percentage of women employed in the top quartile of jobs was determined for each category.
There is a broad overlap between the largest categories by contract value and the worst performing categories by gender pay gap. In the top ten categories for gender pay disparity six of the categories also feature in the top ten categories by expenditure; Construction works, Architectural and engineering, Software, IT services, Telecommunications & Media and Research and Consultancy all feature, representing £224bn of contracts let since 2017.
As we have show below, construction has a strong correlation between a high level of contract value and high levels of gender pay disparity. Along with Architectural engineering, Construction makes up the bulk of the contracting with the worst performing suppliers by category and should be the area of greatest focus if the government wants to reduce the gender pay gap in its supply base.
It is surprising that despite drives to improve women in technology, the IT Services, Software and Media and Communications categories are among the worst performing industries. The level of gender pay bias towards men is 17% for Telecoms & Media, 19% for IT Services and 21% for Software.
The worst performing category is finance and insurance, with a gender pay disparity of 24%, but a spend of only £3bn. However, directly contracted spend with the financial services sector is relatively rare as value is often exchanged as a percentage or as part of a varied and often complex set of services, from individual banking services to card payment processing and investments. In these cases there is rarely a formal contract with a predetermined value that can be published online. It is likely that the value of spending in this market is much greater than recorded.
The Real Estate Industry was the third highest bias, where men earned 22% more than women.
Procurement categories ordered by the worst performing gender pay gaps. Gender pay bias measured in % and total value of contracts between 2017 and 2020 measured in £.
Procurement categories ordered by the worst performing gender pay gaps. Gender pay bias measured in % and total value of contracts between 2017 and 2020 measured in £.
Category | Pay gap (%) | Amount Contracted (£bn) |
Finance & insurance | 27.00% | £3 |
Construction | 23.00% | £66 |
Real estate | 23.00% | £0.2 |
Architecture & engineering | 22.00% | £67 |
Software | 21.00% | £21 |
Repair & maintenance | 20.00% | £7 |
IT services | 19.00% | £34 |
Hospitality | 18.00% | £1 |
Telecoms & media | 17.00% | £24 |
Research & consultancy | 17.00% | £12 |
Procurement categories ordered by the worst performing gender pay gaps. Gender pay bias measured in % and total value of contracts between 2017 and 2020 measured in £.
Sources:
Spend Network database of contracts, all contracts are aggregated from official sources such as Contracts Finder and other publishing portals.
The Companies House register of UK companies: https://find-and-update.company-information.service.gov.uk/
The UK Government’s open data on gender pay: https://gender-pay-gap.service.gov.uk/
EU Common Procurement Vocabulary: https://simap.ted.europa.eu/cpv
Scope:
Contracts awarded between 2017 and 2020, latest gender pay gap reporting.
Description:
To obtain a category for suppliers, we took the leading classification for each contract award notice and rounded these up to the highest level CPV code and took the best fit CPV code based on this data. Contracts were grouped and summed according to these high level CPV codes creating a total value for each category. We then used the Companies House identifiers that we had attributed to the suppliers that won these contracts and used this to gather and analyse each company’s gender pay gap. A median pay gap was determined for each category and contract earnings for each category was ranked by the pay gap from largest category downwards.
By linking gender disparity data on who won contracts with the category and value of those contracts, we are able to show for the first time whether there is a positive or negative correlation between the value of the contracts a company wins and the extent of that companies gender pay gap, effectively establishing whether it pays to be prejudiced.
In the Business Services category there is a very strong negative correlation between a high gender pay gap and the value of contracts earned. Here we can see that as gender pay gaps increase, the value of the contracts that are being won decreases. In Construction Work the opposite is true, companies with the highest pay gaps are effectively being rewarded with higher value contracts.
This does not mean that the gender pay gap is influencing the outcomes of tenders, if a construction company chose to increase their gender pay gap it is unlikely that they would win more public sector contracts, instead the pay gap is associated with larger companies within the market and that these companies are winning larger contracts. However, our analysis does show that the issue of gender pay disparity is not impacting suppliers ability to win business, and that government is effectively providing a tacit approval of payment disparity with the contract awards that they make in this category.
Different categories are showing differing trends with the majority of categories generating rewards for disparity. Government has frequently taken a category led approach to purchasing and this analysis demonstrates that a category led approach to tackling pay disparity may be the most fruitful approach, should governments seek to change pay disparity in their supply base.
The correlation between the value of contracts let between 2017 and 2020 and the gender pay gap of company that won the contract. Pay gap measured in %, contract value measured in £.
The correlation between the value of contracts let between 2017 and 2020 and the gender pay gap of company that won the contract. Pay gap measured in %, contract value measured in £.
Too large to display.The correlation between the value of contracts let between 2017 and 2020 and the gender pay gap of company that won the contract. Pay gap measured in %, contract value measured in £.
Sources:
Spend Network database of contracts, all contracts are aggregated from official sources such as Contracts Finder and other publishing portals.
The Companies House register of UK companies: https://find-and-update.company-information.service.gov.uk/
The UK Government’s open data on gender pay: https://gender-pay-gap.service.gov.uk/
EU Common Procurement Vocabulary: https://simap.ted.europa.eu/cpv
Scope:
Contracts awarded between 2017 and 2020, latest gender pay gap reporting.
Description:
To obtain a category for suppliers, we took the leading classification for each contract award notice and rounded these up to the highest level CPV code and took the best fit CPV code based on this data. Contracts were labelled according to these high level CPV codes. We then used the Companies House identifiers that we had attributed to the suppliers that won these contracts and used this to gather and analyse each company’s gender pay gap. Finally we selected two categories and plotted the award of contracts according to gender pay gap for each category.
It remains a sobering reality that many organisations and sectors, both public and private, retain gender biases in terms of pay and women in top positions. Moreover, these biases are often significant and they are overwhelmingly in favour of men. The majority of both buyers and suppliers sit within the gender bias of more than 10%. There are still more than 20% of organisations paying men more than 20% more salary per pound. By contrast, there are far fewer organisations with a female bias or more equality in pay. This suggests a systemic problem and there is clearly still significant work to do, both at a government level and within suppliers to government.
However, there is some reason to be optimistic, namely in that we were able to do this study to begin with. The power of open contracting data merged with open data on companies and gender data allows for greater insights into the market and increases the potential for buyers to use open data in decision making and in their long term sourcing strategy. The UK is the only country in the world where this sort of analysis is possible and we should applaud their insistence on making each of these datasets open. New analytics gives governments the ability to use the $13trn procurement budget to deliver improved social outcomes when they engage with the private sector.
Clearly the UK Government is a leader in the field of open data and transparency: it is this commitment to transparency as well as a commitment to addressing the issue of gender and work that has made this research possible. Whilst some of this report may make difficult reading for some parts of the public sector supply chain, our research makes it easier for our government to address the gender pay gap in public contracting and to use procurement expenditure to deliver improved social outcomes for its citizens.
Other governments around the world should follow suit and openly publish their contracting and gender pay gap reporting data. Globally, public contracting is valued at $13trn or around 11% of global GDP, publishing this data using the Open Contracting Data Standard could significantly improve the position of women in the workplace around the world. The UK also has a role to play in making sure that this unique analysis is taken up by Government and used to deliver beneficial changes for women in the workplace.
Governments are outsourcing more and more business to companies, they need to act if they don’t want to simply outsource their responsibility to women in the workplace. Even if data on gender disparity is not widely available, public sector buyers around the world can work with suppliers and industry bodies to establish the need to report on gender disparity as a condition of bidding for, or winning large public contracts.
It is not enough to understand whether there is a gender pay gap, much of the challenge associated with the world of work starts with company ownership and the overwhelming number of men who start and run companies. Profiling companies to establish whether they are owned in whole or in part by women can provide useful insights into whether female owned companies are being given a chance to win business with government. A similar recommendation was made in a recent UK Government Digital Service commissioned report by Oxford Insights “Gender Equality and Social Inclusion in ICT Procurement”. Establishing this measure could also allow for specific programmes of support for female entrepreneurs who wish to sell into government.
Although UK government departments’ pay gap average is still 9.85% in men’s favour, their performance is better than their private sector partners and particularly the strategic suppliers. In this context, the public sector can provide good advice to their suppliers on how to reduce the pay gap.
Public sector buyers are gatekeepers to a market worth nearly $13 trillion around the world. These buyers are therefore in a unique position to affect the corporate strategies of the companies bidding for this business. If governments are serious about tackling the gender pay disparity, then they should be willing to ask suppliers with the worst pay disparity what they are doing to address their performance. At the same time, buyers should be willing to award contracts to the suppliers that have a better pay disparity performance than their rivals.
For instance, the UK’s policy to consider social value in the awarding of central government contracts could be updated to explicitly evaluate the gender pay gap of bidders on contracts and whether that pay gap is either increasing or decreasing.
The OECD has shown that 50% of governments have legislative frameworks that tackle the issue of gender in public procurement. Fully implementing these legal options will depend on better use of open data for contracting.
The bid process only represents a single snapshot in time and requires contract management to monitor and enforce action plans. One way to encourage better performance is to measure the progress that suppliers make in gender pay disparity over the duration of a contract. As a condition for entering on frameworks or to become eligible to enter a contract, public buyers can request regular submission of evidence of work on action plans for gender equality in pay and audit these. Buyers should monitor how the average pay disparity across a category changes over time and adopt greater or lesser interventions according to annual progress.
As part of the government’s ‘levelling up’ agenda, we would encourage the UK to undertake further research into public procurement to understand whether there is a need for specific interventions in key markets or with key suppliers to reverse unacceptable gender pay gaps. Further work should also be undertaken to establish whether there is a bias in the make up of procurement teams and whether that bias has any role in enforcing a gender pay disparity within suppliers.
Each of the strategic suppliers should have their spending and contract data analysed to establish where and when key leverage points can be established in order to demand better performance on pay for women if they are to continue to enjoy the status of strategic suppliers. Whilst it would be churlish to suggest that the public sector might suddenly stop using Microsoft products because of pay disparity, it is not unreasonable for Microsoft to agree that it needs to do better and to establish better performance prior to bidding on key contract renewals.
At Spend Network, we are a team with a big goal: to collect every public tender and contract in the world and to publish that data openly.
We sell bulk data, analysis and tools to analyse the $13trn market for procurement.
Procurement often has access to valuable data, but frequently fails to use the data to deliver better outcomes, both for suppliers and buyers. We exist to use data to improve the market valued at $13trn a year. It is time for procurement to catch up, to gather better data and use it to deliver better services and better value for its citizens. We hope this report goes some way to highlighting the issue of gender pay inequality.
To find out more about how easy it is to create new services, insights and products using our data, book a demo with our team.