NCVO response to the Social Value Act review

The social value agenda is gaining momentum. Across the country public bodies are increasingly looking to use their spending power to achieve additional economic, social and environmental objectives above-and-beyond the primary service being procured.

Although progress is patchy and much more can be done, there seems to be a growing recognition that new and more innovative approaches to public procurement are needed to tackle the dual pressure of reductions in public spending and an increased demand for public services. Alongside early action and community budgeting, commissioning for social value is a key component of this drive towards greater efficiency.

It is perhaps in part due to this growing recognition that the Government recently conducted a review of the Social Value Act 2012. Led by Lord Young (the Prime Minister’s Adviser on Enterprise) the review looked at how the Act is currently working and whether it should be strengthened to better support small businesses, charities and social enterprises bid for public contracts.

In our submission to the review we highlighted the great work some public bodies are doing on social value. But we also noted how many lack the skills, knowledge and inclination needed to put a social value commissioning strategy into practice, and how a combination of statutory guidance, training and amendments to the Act are needed to address this shortcoming.

Training and guidance (again!)

Improvements to commissioning and procurement practice requires high quality training and guidance – commissioning for social value is no different. We therefore reiterated the recommendation in our Voluntary Sector Manifesto for the 2015 General Election that the Government create a Centre for Social Value within an expanded Commissioning Academy. Among other things, the centre could:

• teach commissioners and providers how to commission for social value through masterclasses and events;
• track the implementation of the Act through yearly progress reports and develop performance indicators so that success can be measured;
• help commissioners work with their communities to develop social value measurement tools that reflect local priorities.
• provide telephone or email support for commissioners and procurement professionals seeking advice on how they approach writing social value into contracts and other areas of uncertainty.

We also recommend that the Government produce statutory guidance to help and encourage contracting authorities to use the Social Value Act to its full potential. Since coming into force in 2013 it has been widely acknowledged (by all sectors) that the absence of effective guidance has hampered implementation. Learning from the Commissioning Academy, input from key stakeholders and pre-existing good practice could be used to inform the development of this guidance.

Amendments to the Act

We have also recommended the following changes to the Act to provide additional stimulus to those public bodies yet to implement their own social value agenda:

• The requirement that public bodies ‘consider’ social value in public sector contracts should be upgraded so that they must ‘account for’ social value. This would help provide the Act with the ‘teeth’ many believe it currently lacks.
• The requirement that public bodies ‘consider’ consulting when looking to include social value in a procurement should be strengthened so that they must ‘account for’ consultation. Consultation with service users and organisations that advocate on their behalf is vital for effective and efficient public services. Commissioning for social value is no different.
• The government should remove the EU procurement threshold clause. Smaller contracts are just as likely (if not more likely) to have potential to generate social value. The removal of this clause would therefore send a clear signal that social value should apply to all contracts, not just those above 200,000 euros.
• The Act should be extended beyond services to goods and works. Not only would this generate better outcomes and long term savings for the taxpayer, it would also make it easier for contracting authorities to implement effective social value strategies. This in turn would provide more opportunities for voluntary organisations to be part of public sector markets.

We believe these modest legislative changes alongside a high-quality guidance and training offer could have a substantial impact on the effectiveness and efficiency of public procurement at a time when public bodies need to do more with less.

The Government has now finished collecting evidence for the review and is due to report its findings in early 2015. We’ll let you know as soon as they do. In the meantime, please let us know about your experiences of commissioning for social value by leaving a comment below.