Earlier this week the government concluded a consultation into how social value can be used to make government procurement more effective. It might sound dull, but this is actually one of the biggest steps that the government has taken forward from its Civil Society Strategy last year.
Effectively, the central government is going to extend the Social Value Act to all goods and services across Whitehall procurement. This will affect over £100bn of public spending – a huge sum of money.
The more that social value is taken into account, the better chance that social enterprises will have in winning contracts. It will also encourage big strategic suppliers to work with social enterprises and voluntary organisations within their supply chains.
This move has come about thanks to the continuous campaigning of organisations such as Social Enterprise UK but also the leadership of the VCSE crown representative Claire Dove, who has been tireless in her efforts to get this at the top of the government agenda.
Social value in practice
The government is proposing two big moves to make social value a reality within its procurement systems.
Firstly, it wants to have a minimum weighting of 10 per cent social value within all contracts. This means that when awarding a contract, social value will account for 10 per cent of the points given to those tendering. This means that every contract will have some element of social value within it. This is a bold step forward and follows best practice in a number of councils across the country, as Social Enterprise UK identified in our latest research, Front and Centre.
Secondly, they will be creating a new framework for social value so that government buyers know what the government’s objectives area when it comes to maximising social value. This has been a barrier in the past because social and environmental impact can be hugely varied, leaving procurement officers in a difficult position when it comes to deciding what to focus on within tenders. Again, this follows best practice at town hall level, where the best councils have outlined their strategic priorities and used these to maximise social value.
No half measures
Social Enterprise UK has broadly welcomed the direction of travel, but as the government has already taken a big step forward it is a shame that they have not gone the whole way.
The minimum weighting whilst a positive step forward, should be higher. Many councils have a 20 per cent weighting for social value. Manchester City Council has even consulted on a 30 per cent weighting. A higher weighting would help social enterprises to do better and make engagement between strategic suppliers and the sector more meaningful. We are calling for 20 per cent weighting. A solid weighting in line with the rest of the country. A low weighting, whilst better than nothing, could leave engagement as purely tokenistic and give less social value for the taxpayer.
On the framework, the government may be guilty of confusing social value with other parts of its agenda. Cyber security and modern slavery are important issues. But having secure networks and not having slavery within supply chains should not be bargaining chips that providers use to win contracts. These should be legal minimums that everyone is expected to follow. There is also a risk that the government frustrates innovation in the sector by rigidly focusing on a few metrics, rather than recognising the variety of support that social enterprises and voluntary organisations can offer. The key will be effective communication, which often government struggles to do. We need to help the government to ensure that this framework is not seen as a straitjacket but as a starting point.
No more excuses on social value
It has taken us a while to get here, but the government has taken a big leap forward on social value, accepting that social value should apply to everything. This is in line with what Lord Young found in his review of the Act in 2015, which was that wherever social value was deployed, it had a positive impact.
There are now no more excuses available for social value not to be used within central government or at a local level. Social value is practical. It has a positive impact. It can be used everywhere. This consultation is another nail in the coffin that social value is a wish list rather than a serious agenda. What we need now is leadership from ministers, officials and the sector to make social value a reality. We must keep pushing government to go further. We cannot wait for the collapse of another Carillion for this issue to be taken seriously.
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