Latest Public Sector News

27.02.14

Achieving social value

Source: Public Sector Executive Feb/Mar 2014

A year on from the implementation of the Social Value Act, the Cabinet Office has released a report investigating progress so far. Adam Hewitt reports.

The Public Services (Social Value) Act is “a powerful new tool in the commissioner’s toolbox, helping them get the most from every pound they spend”, according to civil society minister Nick Hurd.

The Cabinet Office is “encouraged” by progress made so far, it says, and indeed it is legislation that has had a genuine and speedy impact on the ground. When people involved in public sector procurement have been interviewed by PSE since the Act came into force on 31 January 2013, it is rare for them not to mention it.

At its most basic, the law requires public sector bodies to consider how a service they are procuring could bring added economic, environmental and social benefits – and so to move away from decisions focusing purely on short-term cost implications, towards long-term value considerations for their communities.

The move was actually less radical than some have claimed; EU procurement law has long allowed wider social and environmental considerations to be taken into account when procuring public services, for example. This was a point made forcefully during the debates over the Department for Transport’s 2012 decision to go with German-built Siemens trains for the Thameslink rail franchise, rather than British-built Bombardier ones. But the new Act makes such considerations a specific duty.

The renewed 2010 ‘Compact’ between the government and civil society organisations in England also included a commitment to ensure “social, environmental and economic value forms a standard part of designing, developing and delivering policies, programmes and services”.

The Cabinet Office report into progress made goes on: “A number of agencies under the Duty of Best Value (such as local authorities, police forces, fire authorities and commissioners of transport services) are required to consider the overall value contributed by providers, with the aim of encouraging greater voluntary, community and social enterprise (VCSE) and SME participation in public services. This duty includes considering the wider economic, environmental and social value created through procurement, above and beyond that of the service itself. Social value and sustainable procurement are also embedded in the NHS Standards of Procurement, as well as forthcoming NHS England Procurement Guidance.

“This agenda matters now more than ever. Demand for public services is rising, in a time of reduced funding. So it is particularly important that we get maximum value for every pound spent.”

But social value is not tightly or prescriptively defined: that has been left up to local commissioners of services, for the most part – some of whom have gone further than the provisions of the Act, including Liverpool City Council.

Others, however, remain cautious and risk-averse, concerned about breaking competition and procurement law, or allowing the lack of prescriptiveness to breed confusion. The government has promised more support to commissioners via the Commissioning Academy, open to senior commissioners from all parts of the public sector, with the aim to reach 1500 participants by the end of 2015/16 (PSE covered the Commissioning Academy initiative in the July/Aug 2013 edition), and via the Public Service Transformation Network (PSTN) initiative. See page 32 for our in-depth look at the PSTN.

On the provider side, not all bidders know how to emphasise the social value that they can actually help create, and may need more guidance on this.

The government said it will rectify this by:

• Extending the programme of Commercial Masterclasses, which support civil society organisations to better engage with commissioners. The Masterclasses were established in March 2013 and cover a range of topics that are essential for VCSEs that are tendering for public contracts.

• Through the Cabinet Office-funded Inspiring Impact programme.

• Through the Mystery Shopper service, which will investigate cases where providers believe commissioners have not followed the Social Value Act, and which will also carry out proactive spot checks of individual procurement exercises to check that the Act has been applied. To date, Mystery Shopper has investigated 562 cases, of which 79% have been resolved successfully.

The government has promised a further update in a year’s time.

Case studies of best practice

• Wakefield Council and its work with Fresh Pastures, a Community Interest Company supplying milk to local schools

• Trading for Good, a not-for-profit venture that inspires small businesses to be more socially responsible

• Interserve, a construction and support services company, recently redesigned its approach to sustainability

• Oldham Council has embedded social value into its procurement framework, put into action recently when it signed a new banking services contract

• Gateshead Council’s troubled families provision, with the service co-designed with the voluntary/community sector

• Skill Mill Ltd, a social enterprise that provides employment and training opportunities for young offenders

• Bath & North East Somerset’s procurement strategy

• Croydon’s toolkits for commissioners and the way it tendered a £150m housing repairs contract

• The major West Midlands councils have nominated Social Value Champions

• Birmingham City Council’s Green Deal contract with Carillion Energy Services

The full case studies can be found here.

(Image: c. Cabinet Office)

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