A review of the Social Value Act by Lord Young has been met with disappointment by sector bodies after it recommended that the Act should not be extended and strengthened.
The Public Services (Social Value) Act 2012 requires commissioners to consider whether they can secure added economic, social or environmental benefits when awarding contracts. Sector bodies have called for the Act to be strengthened because of concerns that it has not been widely adopted.
Lord Young, who was appointed to carry out the review last autumn, said: “The first thing to note about the Act is that, where it has been taken up, it has had a positive effect, encouraging a more holistic approach to commissioning which seeks to achieve an optimal combination of quality and best value.”
He added that he was “excited about the Act’s potential” but that “we have more work to do to improve the reach and application of the act in its current form before we can make a robust case for extension”.
The review identified three barriers to realising the potential of the act: awareness and take up is mixed, there is a lack of definition for ‘social value’, and that measurement of social value is not fully developed.
It recommends that the government do more to increase awareness of the Act and the practicalities of applying it. Inspiring Impact has been asked lead a new group to look at ways of measuring social value. It also suggests that there be a follow up review in two years time.
When the Act was introduced the threshold for applying it was linked to European Union procurement thresholds, which were €134,000 (£99,000) for contracts offered by central government and €207,000 (£153,000) for other public bodies.
The EU procurement threshold is set to rise to €750,000 and the government has accepted Young’s suggestion that there be an amendment to the Act to prevent this from affecting the Social Value Act thresholds.
Rob Wilson, minister for civil society, said in a letter to Young that: “Preventing the Act’s thresholds from increasing to €750,000 for many services when the new Public Contracts Regulations 2015 come into force is an important first step in doing this.”
Sector disappointment
A number of representative groups have said they are disappointed by the outcome of the review.
Sir Stuart Etherington, chief executive of NCVO, said: “We are pleased to see that the review has adopted several NCVO recommendations, including the need for Government to promote awareness and take-up of the Act and for better measurement tools to help commissioners assess social value in public service contracts.”
But he added that: “We are disappointed that the review panel has not seized the opportunity to strengthen the Act, for example by requiring commissioners to account for the social value they generate, or accepted our recommendation that statutory guidance be issued to public bodies to help them use the Act to its full potential.”
Peter Holbrook, chief executive of Social Enterprise UK, said: “We are disappointed that there is no statutory guidance underpinning the Act and seemingly little support to extend the Act to goods and works.”
Andrew O’Brien, head of policy and public affairs at Charity Finance Group, said that there were “a number of missed opportunities” and that: “The government should consider working with the sector to compile evidence gathered for the review into statutory guidance as well as commit to annual monitoring of the Act so that its progress can be accurately tracked. It is important that the Act does not lose momentum after this review.”
