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A new era for ethical labour practices in social housing procurement
The ethical future of social housing starts in the supply chain, writes Francesca Lee of SocialValueArchitect
Francesca Lee is chief executive and founder of SocialValueArchitect
The ethical future of social housing starts in the supply chain, writes Francesca Lee of SocialValueArchitect #UKhousingThe Procurement Act 2023, which came into force in February, represents a major overhaul of the UK’s public procurement rules, and its implications for the social housing sector are profound. Beyond streamlining procurement processes and opening up competition, the act embeds ethical labour practices, social value and supplier integrity into the heart of public contracting.
For social housing providers and those in the supply chain, this presents both a challenge and an opportunity, to treat ethical labour as a critical component of how affordable, sustainable and responsible homes are delivered.
Social housing providers are already subject to considerable public scrutiny. As anchor institutions, they are expected to lead on issues such as social inclusion, local employment, tenant well-being and sustainability.
Now, under the Procurement Act 2023, that leadership role extends more explicitly to ethical labour standards, across the entire housing delivery and maintenance supply chain.
With housing delivery heavily dependent on contracted construction, maintenance, security and cleaning services, the risk of labour exploitation – including modern slavery, illegal recruitment practices and poor working conditions – looms large. The new act makes it clear: ethical labour must be built into procurement decisions from the outset.
The Procurement Act introduces several key shifts that will affect how housing providers select and manage their suppliers, which I explore below.
1. A broader definition of “public benefit”
Contracting authorities – including housing associations subject to public procurement rules – will now be required to consider public benefit in all procurement decisions.
This includes tackling modern slavery and labour exploitation, advancing social value and equality, and supporting ethical sourcing and decent working conditions. Going forward, ethical labour practices can and should be part of the scoring criteria in tenders, contract design and performance evaluation.
2. Stronger grounds for supplier exclusion
Suppliers can now be excluded not only for proven criminal offences but also for “grave professional misconduct”, including breaches of labour laws, unethical recruitment or known labour exploitation within their sub-contracting chains – even where no prosecution has occurred.
For social housing, this means that Tier 1 contractors and their sub-contractors will face heightened scrutiny, and housing providers will need systems in place to assess ethical risk and apply exclusions transparently.
3. Focus on contract lifecycle management
The act emphasises that ethical standards must be upheld throughout the contract lifecycle, not just at award stage. This opens the door for performance-based clauses, ethical KPIs and ongoing monitoring – including worker feedback mechanisms and independent audits.
Recent media reports and NGO investigations have exposed exploitation in large regeneration projects, modular housing factories and outsourced services. For a sector built on fairness and community impact, these practices are not only unacceptable, but brand-damaging and contrary to social mission.
The Procurement Act gives social landlords both the mandate and the mechanism to act.
So, what should housing providers do now?
First, embed ethical labour in procurement strategies. Update procurement policies to reflect the Procurement Act’s emphasis on ethical labour as part of “public benefit”. Include labour risk as a consideration in pre-qualification questionnaires, tenders and contract management.
Review current suppliers – particularly in construction, maintenance and cleaning – for exposure to labour exploitation. This means understanding recruitment models, payment practices, use of sub-contractors and compliance with labour standards. Where a supplier is linked to unethical practices, apply new discretionary exclusion powers under the act – and document decisions clearly.
“Offer guidance and training to help contractors build ethical labour practices into their supply chains. Collaborate on shared tools such as supplier codes of conduct, risk assessments and ethical audits”
Incorporate provisions for modern slavery prevention, fair recruitment, minimum labour standards, worker engagement and right-to-audit in relevant contracts. Consider linking payment milestones to ethical KPIs.
And finally, work with contractors to improve practices. Offer guidance and training to help contractors build ethical labour practices into their supply chains. Collaborate on shared tools such as supplier codes of conduct, risk assessments and ethical audits.
While larger contractors may already have systems for ethical labour compliance, smaller local suppliers may lack the capacity to respond to new requirements. The solution isn’t exclusion – it’s support.
Social landlords should consider providing smaller suppliers with templates for ethical sourcing policies, training on modern slavery and recruitment risks, and a fair and proportionate approach to pre-qualification.
Ethical labour practices are no longer a standalone compliance issue – they’re a cross-cutting indicator of ESG maturity, board-level governance and tenant trust.
For developers and delivery partners working with housing associations, being able to demonstrate ethical practices will increasingly be a requirement to win work.
The Procurement Act 2023 gives the social housing sector the tools to lead in shaping the ethical standards to which their properties are built, maintained and managed. In a sector founded on social justice, failing to address labour exploitation risks undermining the very values that housing providers stand for.
By taking action now – updating procurement policies, working closely with suppliers and using the act’s powers responsibly – housing providers can ensure that every pound of public investment delivers on those values.
The ethical future of social housing starts in the supply chain. Let’s make it visible, measurable and non-negotiable.
Francesca Lee, chief executive and founder, SocialValueArchitect
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