What is the Social Value Act?

What is the Social Value Act?

• Under the Social Value Act, if a potential service provider offers community benefit beyond the contract specification (e.g. by employing people with disabilities), then this should be taken into consideration by the authority in deciding where to award a contract.
• The Government’s definition of social value is: “a concept which seeks to maximise the additional benefit that can be created by procuring or commissioning goods and services, above and beyond the benefit of merely the goods and services themselves”.
• NCVO welcomes the Social Value Act. This legislation has the potential to improve the commissioning process and enable more charities to use their skills, passion and expertise to deliver more public services.

When does it come into force?

• It began as a private members Bill sponsored by Chris White MP in 2010.
• It became the “Public Services (Social Value) Act” on 8 March 2012.
• It will come into force in January 2013.

What does it say?

• It requires certain public authorities – such as a local authority or an NHS trust – to consider how the procurement of a service may improve the economic, social and environmental well-being of an area.
• In most cases, social value must be considered at the point when an authority proposes to enter into a public service contract i.e. the “pre-procurement” stage.

Why is it important for the voluntary sector?

• This is the first time authorities have had to consider the social value of the services they commission.
• So this potentially will open-up contracts to more voluntary and community sector providers – as many already demonstrate social value in their services.
• Chris White MP, who introduced the Act in 2010, said: “The aim of the Act is to support community groups, voluntary organisations and social enterprises to win more public sector contracts and to change commissioning structures so that a wider definition of value rather than just financial cost is considered.”
• NCVO will be closely monitoring and engaging in the implementation of the Act both now and when it comes into force in January 2013.

How can voluntary organisations use it?

• Now all services commissioned by public authorities must demonstrate social value. So social value has to be incorporated into the design of the service. As most voluntary organisations already demonstrate social value in the services that they run, it should mean that more voluntary organisations will win contracts and run public services.
• Voluntary organisations can also use this new legislation to hold local commissioners to account if social value has not been considered.
• This can be used in much the same way at the Best Value Statutory Guidance has been since it was introduced in September 2011.
• For example, in January 2012, 16 charities had their grants from Derby City Council extended after challenging the local authority using the Best Value Statutory Guidance.

What are NCVO’s initial thoughts on the Social Value Act?

• NCVO strongly welcomes the Social Value Act as we have long advocated the use of social value in the commissioning process.
• This is an opportunity for the voluntary sector to engage in the commissioning process and organisations should be proactively bringing the Social Value Act to the attention of local commissioners.
• Yet it is important now to see how the Act is implemented. It must be taken-up by commissioners and local authorities, and Government should have a strong push for implementation of the Act
• Ultimately, the Act has the potential to lead to improved and better designed services, impacting on the lives of many individuals.

Charlotte Stuffins