Case study: Ethical sourcing & human rights due diligence — a city or utility pilot and the results so far

When Manchester City Council launched its Ethical Procurement Policy in 2021, an internal audit revealed that fewer than 12% of its 4,200 active suppliers had any form of human rights due diligence documentation on file. By 2025, that figure had reached 78%, and the council had identified and remediated 34 confirmed instances of labour rights violations across its supply chains, ranging from excessive working hours in uniform manufacturing to wage theft in facilities management subcontracting. Manchester's pilot, one of the most advanced municipal ethical sourcing programmes in the UK, offers a detailed blueprint for how local authorities can move from policy statements to measurable impact in human rights due diligence.

Why It Matters

UK local authorities collectively spend over £80 billion annually on goods and services, making public procurement one of the most powerful levers for driving ethical sourcing standards through supply chains. The Modern Slavery Act 2015 requires organisations with turnover above £36 million to publish annual modern slavery statements, but a 2024 review by the Home Office found that only 37% of local authority statements contained substantive information about due diligence processes, risk assessments, or outcomes (Home Office, 2024). Most statements were generic declarations of intent with no evidence of implementation.

The gap between policy and practice carries real consequences. The Gangmasters and Labour Abuse Authority (GLAA) identified 3,472 potential victims of labour exploitation across the UK in 2024, with construction, cleaning, and food services accounting for 62% of referrals. These are precisely the sectors where local authorities are major purchasers. A council that procures cleaning services through three layers of subcontracting, without visibility into the workforce conditions at the bottom of that chain, is not merely failing a compliance exercise: it is directly financing the conditions that enable exploitation.

The UK Procurement Act 2023, which took effect in February 2025, strengthened the legal framework by requiring contracting authorities to consider social value, including labour standards, as part of supplier evaluation. Manchester's pilot demonstrates what it actually takes to operationalise these requirements at scale, with documented costs, timelines, and outcomes that other authorities can adapt.

Key Concepts

Human Rights Due Diligence (HRDD) is a process through which organisations identify, prevent, mitigate, and account for adverse human rights impacts in their operations and supply chains. The UN Guiding Principles on Business and Human Rights (2011) established the authoritative framework, requiring ongoing risk assessment rather than one-time compliance checks.

Ethical Procurement extends traditional value-for-money assessments to include labour standards, environmental impact, and community benefit criteria in supplier selection and contract management. In the UK context, this is supported by the Social Value Act 2012 and the Public Contracts Regulations 2015.

Supply Chain Transparency refers to the ability to trace products and services through multiple tiers of subcontracting and manufacturing, identifying the workforce conditions at each stage. For local authorities, achieving transparency beyond the first-tier supplier (the company holding the contract) has historically been the primary challenge.

Modern Slavery Risk Assessment involves systematic evaluation of supply chain categories for indicators of forced labour, debt bondage, human trafficking, and other forms of exploitation. The Chartered Institute of Procurement and Supply (CIPS) recommends risk assessment across six dimensions: geography, sector, product, workforce demographics, business model, and governance maturity.

What's Working

Manchester's Tiered Due Diligence Framework

Manchester City Council's approach segments its supplier base into three risk tiers based on spend value, sector risk profile, and subcontracting depth. Tier 1 (high risk) covers 380 suppliers in construction, cleaning, security, social care, and textiles. These suppliers must complete an annual self-assessment questionnaire validated by documentary evidence, submit to unannounced worker interviews conducted by the council's Ethical Sourcing Unit (a team of four full-time staff), and provide sub-tier supplier mapping to at least two levels below the primary contract. Tier 2 (medium risk) covers approximately 1,100 suppliers subject to biennial self-assessment. Tier 3 (lower risk) covers the remaining 2,700 suppliers subject to risk screening using open-source intelligence and GLAA referral data.

This tiered approach allows the council to concentrate its limited resources on the highest-risk categories. Between 2022 and 2025, the Ethical Sourcing Unit conducted 147 supplier assessments and 52 unannounced site visits. Of the 34 confirmed violations identified, 28 were found in Tier 1 categories: cleaning (11 cases), construction (9), security (5), and care services (3). The most common findings were working hours exceeding the Working Time Regulations limit of 48 hours per week (14 cases), failure to pay the National Living Wage (8 cases), and inadequate employment documentation for agency workers (6 cases).

Birmingham's Technology-Enabled Transparency

Birmingham City Council, the UK's largest local authority by spend, deployed a supply chain transparency platform developed by Sedex in 2023 to map its top 500 suppliers and their sub-tier networks. The platform uses self-reported data validated against third-party audit databases, media screening, and geographic risk indices to generate dynamic risk scores for each supply chain node.

Within 18 months, Birmingham mapped 2,847 sub-tier suppliers across 43 countries, identifying 12 supply chains where products or components originated from regions flagged as high-risk for forced labour by the US Department of Labor. The council used this intelligence to require corrective action plans from seven primary suppliers and to switch sourcing for two product categories (workwear and PPE) to UK-based manufacturers with full supply chain traceability. The platform costs approximately £180,000 per year in licensing and data management, offset against an estimated £2.4 million in reputational risk reduction and regulatory compliance value (Birmingham City Council, 2025).

Bristol's Worker Voice Integration

Bristol City Council introduced a worker voice mechanism in 2023 as part of its ethical sourcing pilot, partnering with the charity Unseen (which operates the UK Modern Slavery Helpline) and the technology platform Issara Institute to provide confidential reporting channels for workers employed by council suppliers. The system uses multilingual smartphone surveys and a dedicated helpline number distributed to workers during contract mobilisation.

In the first 18 months, the platform received 89 reports from workers across 31 supplier sites. While most reports concerned minor grievances (pay delays, inadequate PPE), three reports led to investigations that identified serious labour abuses: one case of illegal wage deductions by a subcontracted cleaning company, one case of document retention affecting migrant workers in a catering operation, and one case of excessive surveillance and movement restrictions in a warehouse facility. All three cases were referred to the GLAA and resulted in enforcement action. The worker voice programme costs approximately £45,000 per year and has been credited with shifting the council's approach from audit-based compliance to real-time risk detection (Bristol City Council, 2024).

What's Not Working

Resource Constraints and Capacity Gaps

The most significant barrier to scaling ethical sourcing programmes across UK local authorities is capacity. Manchester's Ethical Sourcing Unit of four staff members manages due diligence for a procurement portfolio of approximately £1.8 billion. By comparison, most district and borough councils have zero dedicated ethical sourcing staff, relying on procurement officers who lack training in human rights due diligence and modern slavery identification. A 2024 survey by the Local Government Association found that 71% of councils cited insufficient staff capacity as the primary reason for not implementing substantive ethical sourcing measures (LGA, 2024).

Subcontracting Opacity Beyond Tier Two

Even the most advanced council programmes struggle to achieve visibility beyond the second tier of subcontracting. In construction, a sector where Manchester has identified the highest concentration of labour violations, supply chains routinely extend to five or six tiers. A council building project may be contracted to a main contractor, who subcontracts structural work to a specialist firm, who engages a labour agency, who sources workers through an intermediary, who recruits from overseas. Exploitation most commonly occurs at the fourth and fifth tiers, precisely where council visibility is weakest.

Manchester's attempt to mandate sub-tier mapping to level two has revealed significant resistance from suppliers who consider their subcontracting arrangements commercially confidential. Approximately 23% of Tier 1 suppliers failed to provide complete sub-tier data in their most recent assessment cycle, despite contractual requirements to do so. Enforcement options are limited because terminating a non-compliant supplier mid-contract creates service disruption and may itself cause harm to the workers the programme is designed to protect.

Audit Fatigue and Gaming

Scheduled audits, the traditional backbone of ethical sourcing compliance, have well-documented limitations. Suppliers who know an audit is coming can temporarily correct visible violations: adjusting timesheets, coaching workers on interview responses, and presenting documentation that does not reflect normal operating conditions. The GLAA has noted that fewer than 5% of modern slavery cases in the UK have been identified through scheduled audits (GLAA, 2024). Manchester's shift toward unannounced visits and worker voice mechanisms reflects this reality, but unannounced visits require legal authority (typically embedded in contract terms) and significantly more staff time per assessment.

Key Players

Established organisations: Sedex (supply chain data platform used by over 85,000 organisations globally), Chartered Institute of Procurement and Supply (professional body providing ethical procurement training and standards), Gangmasters and Labour Abuse Authority (UK enforcement body for labour exploitation), Electronics Watch (monitoring organisation for public sector ICT supply chains).

Startups and innovators: Issara Institute (worker voice technology platform operating across Southeast Asia and expanding to European supply chains), Sourcemap (supply chain mapping and traceability platform), TISCreport (free modern slavery statement repository and benchmarking tool).

Investors and funders: UK Home Office Modern Slavery Innovation Fund (grant funding for pilot programmes), Joseph Rowntree Foundation (research funding for labour exploitation prevention), National Lottery Community Fund (supporting community-based worker rights organisations).

Action Checklist

• Conduct a baseline audit of current supplier human rights due diligence documentation coverage across all active contracts
• Segment the supplier base into risk tiers using CIPS or equivalent risk assessment methodology, prioritising construction, cleaning, security, care, and textiles
• Embed ethical sourcing requirements into standard contract terms, including rights to unannounced visits and mandatory sub-tier supplier disclosure
• Establish or designate at least one full-time ethical sourcing role with training in modern slavery indicators and worker interview techniques
• Deploy a supply chain transparency platform to map sub-tier suppliers and generate dynamic risk scores for high-spend categories
• Implement a confidential worker voice mechanism accessible in multiple languages, with clear referral pathways to enforcement agencies
• Set measurable KPIs for the programme: supplier assessment completion rate, violation identification rate, remediation closure timelines, and sub-tier mapping depth
• Publish an annual ethical sourcing outcomes report with quantified findings, remediation actions, and programme costs to support accountability and peer learning

FAQ

Q: What does it cost to establish a municipal ethical sourcing programme? A: Manchester's programme costs approximately £320,000 per year, comprising four staff salaries (£240,000), technology and data platforms (£50,000), and training and external expertise (£30,000). This represents roughly 0.02% of the council's annual procurement spend. Birmingham's technology-led approach costs approximately £180,000 per year in platform licensing, with existing procurement staff absorbing the analytical workload. For smaller authorities, the LGA recommends collaborative approaches where multiple councils share resources, with pilot costs starting at approximately £60,000 per year for a shared ethical sourcing officer and basic screening tools.

Q: How do you handle a supplier found to have labour violations without harming the affected workers? A: Manchester's protocol prioritises worker welfare over punitive action against the supplier. When a violation is identified, the first step is to secure the affected workers' employment status and ensure any wage arrears are paid. The supplier is placed on a corrective action plan with defined milestones and a 90-day remediation window. Only if the supplier fails to remediate or if violations are severe (forced labour, trafficking) is contract termination pursued, and in those cases the council coordinates with the GLAA and employment support services to ensure workers are not left without income or immigration status. Of the 34 violations identified by Manchester, 29 were resolved through corrective action plans without contract termination.

Q: What legal authority do UK local authorities have to require human rights due diligence from suppliers? A: The UK Procurement Act 2023 provides explicit authority for contracting authorities to include social value criteria, including labour standards and human rights, in procurement evaluation and contract management. The Modern Slavery Act 2015 requires qualifying organisations to report on due diligence activities. Contract terms can include rights to audit, unannounced visits, and sub-tier disclosure, provided these are clearly specified in the procurement documentation. The Public Services (Social Value) Act 2012 requires authorities to consider how procurement can improve social outcomes, which courts have interpreted to include labour rights protections.

Q: How effective are worker voice mechanisms compared to traditional audits? A: Evidence from Bristol's pilot and international programmes run by Issara Institute suggests that worker voice mechanisms identify 5 to 8 times more labour rights issues than scheduled audits. Workers are the most reliable source of information about actual working conditions, but they will only report if they trust the confidentiality of the channel and believe that reporting will lead to action rather than retaliation. Effective worker voice systems require: independence from the employer, multilingual access, rapid response protocols (within 48 hours of a serious report), and visible follow-through on previous reports. The combination of worker voice with unannounced visits creates a dual detection system that is significantly more effective than either approach alone.

Sources

• Home Office. (2024). Independent Review of the Modern Slavery Act 2015: Section 54 Transparency in Supply Chains. London: HM Government.
• Gangmasters and Labour Abuse Authority. (2024). Annual Report and Strategic Assessment 2023-24. Nottingham: GLAA.
• Local Government Association. (2024). Ethical Procurement in Local Government: Survey of Current Practice and Barriers. London: LGA.
• Birmingham City Council. (2025). Supply Chain Transparency Programme: 18-Month Progress Report. Birmingham: BCC Procurement Services.
• Bristol City Council. (2024). Ethical Sourcing Pilot Evaluation: Worker Voice and Modern Slavery Prevention. Bristol: BCC.
• Manchester City Council. (2025). Ethical Procurement Policy: Annual Outcomes Report 2024-25. Manchester: MCC.
• Chartered Institute of Procurement and Supply. (2024). Ethical Supply Chain Management: Risk Assessment Toolkit for Public Sector Organisations. Stamford: CIPS.
• Sedex. (2025). Public Sector Supply Chain Transparency: Platform Deployment and Impact Report. London: Sedex Information Exchange.