Social Value Legislation

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It has been 8 years (31st January 2013) since the Public Services (Social Value) Act 2012 came into force.  The act involves people who commission public services to think about how they can also secure wider social, economic, and environmental benefits.  Rather than simply starting the procurement process, it’s essential that procurers consult all stakeholders and think about the service they are going to buy, what they want the service to achieve, the benefits they would like to see and how they expect those benefits to be delivered.

This act is a tool to assist commissioners to increase their value for money from procurement.  This also further encourages commissioners to begin conversations with their local provider market or community to design better services, often finding new and innovative solutions to difficult problems.

This Year (2021) on the 1st January see’s the introduction of the Central Government Social Value Model which aims to support procurers in embedding social value into procurement.  These changers are predicted to improve opportunities for both SMEs and social enterprises to win public contracts, creating “a more resilient and diverse supplier base”.

The model consists of Covid-19 recovery, this will involve attempting to tackle the economic upset caused by the pandemic, increased supply chain resilience, fighting climate change, waste reduction, and driving equal opportunities.  Every commercial government team in central government will need to undergo training courses on the new model to guarantee all contracts deliver the maximum amount of social value possible.  It is also likely that wider public sector will adopt the same approach.

The measures aim to ensure public procurement goes further than the Public Services (Social Value) Act 2012, so that “all major procurements explicitly evaluate social value, where appropriate, rather than just consider it”.

Julia Lopez, Cabinet Office minister, said: “Government has tremendous buying power, spending £49bn each year on contracts for vital public services.  Value to the taxpayer should lie at the heart of our procurement decisions.

“Too often, however, ‘value’ has been narrowly defined by price without taking into account other important factors such as the number of local jobs or apprenticeships a contractor will provide, the care they show the environment in their business practices or the number of SMEs involved in their wider supply chain.

“We want to see a greater variety of companies deliver government contracts, from every corner of our country – not just because that benefits local economies and communities but because it helps diversify our risk, create a more resilient supplier base and deliver some of our critical priorities.

“If we can use government’s buying power to drive that broader value, the better our chances of levelling up our country and investing in our people as part of our Covid recovery.”

How are you creating social value?  All organisations looking to procure and bid into central government are required to include Social Value requirements with a minimum of 10% of the total award criteria used to determine the successful bidder.

Our online training courses “How to effectively procure and manage contracts to create social value” and “Adding Social Value – How procurement can create benefits for society” have been specifically developed with both acts in mind.