The Raven's Blog

29.08.17

Making the public pound count

Rt Hon Hazel Blears, chair of Social Investment Business and a leading member of the National Advisory Board for Global Impact Investment, discusses the importance of achieving social, economic and environmental impact through procurement

Sometimes it’s not the great tones of lengthy legislation that make the biggest changes to our lives and communities but the simple ideas, based on common sense and practicality that are easy to implement, low cost and relevant to people everywhere. In my time in Parliament one of these simple ideas emerged four years ago when I worked with Social Enterprise UK, and colleagues in all parties, to help take the Public Services Social Value Act through the labyrinthine legislative jungle to become Law.

The idea is simple – it requires those commissioning public services to consider social, economic and environmental impact as well as cost when deciding how to spend taxpayer’s money, locally and nationally.

It is small but powerful legislation. It is common sense and practical. Who doesn’t want to squeeze every penny of value from diminishing resources to try to improve jobs, services, and the environment in which we live?

It is not just low cost but can also help to save money by achieving a range of improvements over and above the particular service being commissioned, and it is increasingly easy to implement as more local authorities and practitioners become familiar with the results it can produce.

Four years on from the passing of the Act its principles have now been adopted by 75% of local authorities and there are some fantastic pioneering areas of the country who have enthusiastically led the way in developing a body of knowledge and practice to support this way of working.

In Greater Manchester, London, Birmingham and Liverpool achieving social, economic and environmental impact through procurement is now firmly embedded in their policies and is being used to achieve extra benefits in a wide range of areas from construction of new homes and public buildings, to the provision of children’s services, support for older people and increasingly in the planning process.

But it’s not just in the big cities with mayors in the driving seat that have pushed for local spend and local jobs and apprenticeships through procurement, places like Kent, Oxford and Somerset have also seen how they can get a bigger benefit for their communities if they are smarter about their public spending decisions.

As this approach to procurement develops it is interesting to see how the commercial market is reacting. Many companies are beginning to recognise that evidencing social and economic impact will be increasingly necessary if they are to win public contracts and to gain a competitive advantage. Companies like Fujitsu, Johnson & Johnson, Sodexo and Wates Construction have been active in this area for some time and, as well as providing social value through their own activities, are also joining with social and community organisations in their supply chains to help them deliver impact on the ground.

The area of greatest challenge is in central government, which has been slower to take up the opportunities offered by social value, to maximise the impact of the £200bn annual spend on procurement by departments and agencies. 

The NHS could make a significant impact on the health of those they support through services if they were to employ more people with physical and mental health issues as employment and independence are clearly key to good health outcomes. Some local trusts have embraced social value in their procurement but the centre has not yet systematically promoted this approach.

Defence procurement is huge and the problems of ex-service personnel in finding jobs and settling into post-service life are well known. Using procurement to specify opportunities for those transitioning into civilian life would make a significant difference to those who have served, as well as saving costs in unemployment and support services.

These are just a couple of examples, but if this approach is promoted from the centre across all government departments it would improve thousands of lives and save money. We can’t afford not to do it.

I am hopeful, having recently met with Malcolm Harrison, the new Head of the Crown Commercial Service, that the mindset in central government is changing. I know he understands and supports the principles of social value and impact and is keen to explore the opportunities that could be gained through government’s framework contracts.

Challenges remain if we are to mainstream social value. Central Government needs to step up the pace to shape the market and drive Responsible Business, Local Government needs to continue to embed Social Value in Business as Usual and the massive investment in new infrastructure programmes like HS2 and the new Nuclear Plants must embrace it too.

There are two important opportunities coming up to move ‘Procurement with Purpose’ forward. On 18 September, the Global Advisory Group on Impact Investing will publish its UK report, where it will recommend embedding social value into every public tender decision aiming for a minimum weighting of at least 20%. It’s an ambitious target but achievable with local and central government working together.

On 14 November, the National Social Value Conference in Birmingham will bring together commissioners, social and community enterprises, corporates and measurement experts to highlight achievements so far and to agree on future action.

Social Value is a great opportunity to spend taxpayers’ money wisely and well – let’s not waste it.

Have you got a story to tell? Would you like to become a PSE columnist? If so, click here 

Comments

Sam Van Rood   29/08/2017 at 20:08

Bravo!, as an additional point I would suggest adding quantifying the impact on affordable housing as part of the Public procurement process

Camelsom   30/08/2017 at 21:09

Amazing how political parties make this sort of suggestion when they are not in power.

Elizabeth Mcglone   06/09/2017 at 15:23

Wow! Amazing news. Great blog! I just found it today and can't stop reading your posts.Thanks you for sharing such a great blog with us. Expecting for your good luck. OneDayTop recently has posted for NEWS : http://onedaytop.com/horrible-secret-behind-one-90s-best-pop-songs/

Add your comment

 

related

public sector executive tv

more videos >

latest public sector news

Birmingham City Council’s children’s social care services avoids ‘inadequate’ rating

17/01/2019Birmingham City Council’s children’s social care services avoids ‘inadequate’ rating

Birmingham City Council’s children’s social care services have broken a decade of ‘inadequate’ ratings after Ofsted inspe... more >
Oxfordshire County Council moves forward with £50m-savings transformation plan which could see 900 jobs lost

17/01/2019Oxfordshire County Council moves forward with £50m-savings transformation plan which could see 900 jobs lost

Transformational plans for Oxfordshire County Council could see 890 jobs lost in a bid to save £50m, as councillors meet today to discuss t... more >
Mayor-elect quits over controversy surrounding wife’s involvement in TV executive murder case

16/01/2019Mayor-elect quits over controversy surrounding wife’s involvement in TV executive murder case

The mayor-elect of the London Borough of Redbridge has dramatically withdrawn his nomination after it emerged that his wife was involved in the b... more >

editor's comment

25/10/2017Take a moment to celebrate

Devolution, restructuring and widespread service reform: from a journalist’s perspective, it’s never been a more exciting time to report on the public sector. That’s why I could not be more thrilled to be taking over the reins at PSE at this key juncture. There could not be a feature that more perfectly encapsulates this... read more >

last word

The importance of openness after Grenfell

The importance of openness after Grenfell

Following the recent Grenfell Tower tragedy, Lord Porter, chairman of the LGA, argues that if the public are going to have faith in the safety testing process then everything must be out in the o... more > more last word articles >

the raven's daily blog

Top 5 reasons why you should claim your free EvoNorth delegate pass today

17/01/2019Top 5 reasons why you should claim your free EvoNorth delegate pass today

If you're looking to find out what's happening in the Northern Powerhouse, make new connections, and share innovative ways of working, confirm your attendance for EvoNorth on 27 - 28 Feb 2019. 1 - You'll gain an invaluable insight into what's happening across the north We have a wide range of speakers from across a number of sectors comi... more >
read more blog posts from 'the raven' >

comment

Government accountability: A year in crises

15/01/2019Government accountability: A year in crises

From Windrush to Univerisal Credit: the Institute for Government’s (IfG’s) accountability lead Benoit Guerin discusses how we can ave... more >
Rethinking public-private partnerships

15/01/2019Rethinking public-private partnerships

Trinley Walker, senior policy researcher at the New Local Government Network (NLGN) considers some different ways of approaching the relationship... more >
Fracking: divest to invest

07/01/2019Fracking: divest to invest

Deirdre Duff, divestment campaigner at Friends of the Earth, takes a look at local authorities’ role in fracking. The fossil fuel indu... more >
Building credit with the public sector

07/01/2019Building credit with the public sector

Mark Morrin, localism lead and principal research consultant at ResPublica, makes the case for salary-deducted lending to sit alongside a broader... more >

interviews

Digital innovation in the public sector: The future is now

17/12/2018Digital innovation in the public sector: The future is now

One of the public sector’s key technology partners has recently welcomed a new member to its team. Matt Spencer, O2’s head of public ... more >
Artificial intelligence: the devil is in the data

17/12/2018Artificial intelligence: the devil is in the data

It’s no secret that the public sector and its service providers need to invest in technology to help make better use of their resources. Bu... more >
New Dorset Councils CEO on the creation of a new unitary: ‘This is going to be the right decision for Dorset’

05/11/2018New Dorset Councils CEO on the creation of a new unitary: ‘This is going to be the right decision for Dorset’

The new chief executive of one of the new unitary authorities in Dorset has outlined his approach to culture and work with employees, arguing tha... more >
Keeping the momentum of the Northern Powerhouse

15/10/2018Keeping the momentum of the Northern Powerhouse

On 6 September, the biggest decision-makers of the north joined forces to celebrate and debate how to drive innovation and improvement through th... more >

public sector focus

View all News