Cordant Group’s Phillip Ullmann wants “social value” overhaul of Government contracts

Phillip Ullmann

Phillip Ullmann

Public sector contracts should no longer be given to the lowest bidder, but instead ought to be awarded to “social business” companies that agree to share profits with staff and employ local workers, a leading businessman has said. Phillip Ullmann of Cordant Group, one of the country’s biggest recruitment firms, said that British business needs to fundamentally change its approach in response to growing public distrust.

In a paper published by the Social Market Foundation Think Tank, Ullmann states that the law should be changed such that public service contracts are awarded on the basis of “social value” and not just financial cost. Company rules should also be overhauled to put executives under a legal duty to consider the interests of workers and local communities alongside those of shareholders.

Ullmann, who has capped his own pay and is setting up a “profit pool” to share with his members of staff, said that only radical changes in the rules for companies and public procurement can address populist arguments that the market economy is “rigged”.

Highlighting the recent collapse of the Carillion Group, which is likely to cost taxpayers hundreds of millions of pounds, Ullmann highlighted that public sector contracts appearing to favour companies must be ditched. “Flawed public procurement deals that leave taxpayers bearing all the risk are the best way anyone has yet devised to persuade voters that the modern economy really is a rigged game. New rules are overdue. Public services should be delivered by accountable social business that employ locally, share profits and cap pay and dividends.”

Public Services (Social Value) Act

In his paper, Ullmann sets out how the Public Services (Social Value) Act, which covers Government contracts, can be reformed to favour sustainable businesses over those who simply promise to deliver most cheaply. He has also proposed reform of the Companies Act to put new duties on executives to look after the interests of people and groups affected by their firms’ actions, including workers. Companies should be required to draw up a Social Mission Statement and then face statutory audits to assess how well they’re doing in reflecting stakeholders’ interests.

Ullmann insists that a new approach to business and society is the best way for firms to protect their long-term profits. He said: “Profit is and must remain one of the key driving forces of business, but who receives that profit? If it’s only a remote few, the cost in public trust will become unsustainably high and our licence will be withdrawn. The days of companies being driven by ‘shareholder value’ and nothing else are over. We must start to share our profits more fairly or there will be no profit for anyone.”

James Kirkup, director of the Social Market Foundation, commented: “Phillip Ullmann isn’t a commentator or a politician. He’s a business leader running a major company. When he says that business needs to do things differently, focusing on social impact and sharing its profits, people should listen. Making companies and their leaders more mindful of its duties to society is essential to rebuilding trust in business and a market-based economy. Any politician or leader who wants to defend Britain’s open economy from populist anger should read this paper.”

*The full report can be accessed online at http://www.smf.co.uk/publications/from-mission-to-impact/

About the Author
Brian Sims BA (Hons) Hon FSyI, Editor, Risk UK (Pro-Activ Publications) Beginning his career in professional journalism at The Builder Group in March 1992, Brian was appointed Editor of Security Management Today in November 2000 having spent eight years in engineering journalism across two titles: Building Services Journal and Light & Lighting. In 2005, Brian received the BSIA Chairman’s Award for Promoting The Security Industry and, a year later, the Skills for Security Special Award for an Outstanding Contribution to the Security Business Sector. In 2008, Brian was The Security Institute’s nomination for the Association of Security Consultants’ highly prestigious Imbert Prize and, in 2013, was a nominated finalist for the Institute's George van Schalkwyk Award. An Honorary Fellow of The Security Institute, Brian serves as a Judge for the BSIA’s Security Personnel of the Year Awards and the Securitas Good Customer Award. Between 2008 and 2014, Brian pioneered the use of digital media across the security sector, including webinars and Audio Shows. Brian’s actively involved in 50-plus security groups on LinkedIn and hosts the popular Risk UK Twitter site. Brian is a frequent speaker on the conference circuit. He has organised and chaired conference programmes for both IFSEC International and ASIS International and has been published in the national media. Brian was appointed Editor of Risk UK at Pro-Activ Publications in July 2014 and as Editor of The Paper (Pro-Activ Publications' dedicated business newspaper for security professionals) in September 2015. Brian was appointed Editor of Risk Xtra at Pro-Activ Publications in May 2018.

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