Latest Posts ...

Follow VODG Blog Editor

Once upon a time, the word “value” related only to finance, and aiming for value in the public sector involved a narrow focus on getting the most for your money. While doing more for less is the government’s mantra, the concept of social value has grown in importance and culminated last month in the passing of the Public Services (Social Value) Act 2012.

The act took effect on 8th March and has the potential to transform the way in which public bodies buy services. They must, for the first time, consider how what they might procure could improve the economic, social and environmental well-being of an area. Where appropriate, they must write that social value objective into the procurement process.

But for every forward-thinking commissioner who explores the indirect impact of procurement beyond simply the direct meeting of need, there is one who fails to embrace that wider vision. Tradition dictates that services are more often than not purchased without any consideration of achieving a broader range of successful outcomes.

Let’s take construction project works as a very basic example. Imagine if you award your building contract to a contractor that is required by you to recruit and train neets (those not in education, employment or training) and use additional small or medium-sized enterperises in its supply chain. You not only fulfill the physical terms of your construction contract, but you reap the benefit of helping young people into work and boosting the local economy by making sure that the contractor can access local residents and small, local businesses.

So what does the new act require? It means public authorities must have regard to economic, social and environmental well-being in connection with contracts in which a contracting authority engages a person to provide services.  As Minister for Civil Society Nick Hurd said last year, before the law was passed, “By focusing on services, the legislation rightly focuses on the types of contract with the greatest direct impact on individuals and communities, and consequently where wider value is likely to be most relevant.”

A public authority looking to contract must consider how what they are buying might improve the economic, social and environmental well-being of the area covered by the contract or agreement in question. It must also look into whether or not it needs to undertake consultation into issues of social value arising from the services that might be purchased.

As I mentioned, some of this will be familiar territory to those authorities ahead of the game and who have kept up with various agendas on social outcomes, sustainability, well-being and whole-life costing in the public sector. Only those with their heads in the public policy sand can have missed the growing drive towards social value in public procurement.

The challenge however, one of culture and mindset. With public servants feeling under pressure, the legislation might not be a priority.

And for VODG members, the new act offers a great opportunity. As Nick Hurd said last year: “At the end of the day, and underlying this whole legislation, is a large amount of discretion at the local level to apply this, because the legislation imposes a duty on commissioners to consider social and environmental aspects, where they consider it to be relevant and proportionate…[it] rightly leaves a fair amount of discretion at a local level.”

This leaves an open door to providers to embark on conversations with commissioners well before procurement. It allows providers the chance to hold pre-market conversations and to get to the tender early.

Above all, it opens the door to the notion that those public servants who procure service are no longer commissions, but collaborators. And that, to the third sector which has collaborative practices at its core, is an opportunity worth seizing.

* Read the VODG briefing on the Public Services (Social Value) Act (PDF 130Kb)