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

High Court allows London council to fine and imprison illegal campers

17/08/2018High Court allows London council to fine and imprison illegal campers

A council has successfully obtained a High Court injunction allowing it to use greater powers – from fines and asset seizure to imprisonmen... more >
Northamptonshire report to propose splitting region into two unitaries

17/08/2018Northamptonshire report to propose splitting region into two unitaries

A report on the future of the debt-ridden Northamptonshire region due to be published this afternoon will likely recommend replacing all eight lo... more >
Council forced to apologise after telling ‘intimidating’ football fans they were unwelcome

16/08/2018Council forced to apologise after telling ‘intimidating’ football fans they were unwelcome

A Lancashire council has apologised after sending a letter that stated football fans “will no longer be welcome” in the town centre f... 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

Don’t horse around! Council finds new home for house-bound pony

13/08/2018Don’t horse around! Council finds new home for house-bound pony

A council that took four years in a legal wrangle to remove a pony from an Isle of Lewis house may have found the four-legged beast a new home. Western Isles council removed Grey Lady Too – a Connemara pony that was taken into the home by pensioner Stephanie Noble on Christmas Eve in 2011 – from its residence in 2014 because i... more >
read more blog posts from 'the raven' >

comment

A new era of opportunity for the north

13/08/2018A new era of opportunity for the north

It’s time to stop seeing transport investment as a nice-to-have: it’s a cut-through catalyst for growth in sectors across the north. ... more >
Council mergers: little gain, less democratic

13/08/2018Council mergers: little gain, less democratic

Dr Linze Schaap, associate professor at the Tilburg Centre for Regional Law and Governance, and Dr Niels Karsten, assistant professor at the Tilb... more >
Creating a council cloud-first approach

13/08/2018Creating a council cloud-first approach

Georgina Maratheftis, programme manager for local government at techUK, makes the case for wider adoption of cloud technology by local authoritie... more >
The strength of districts

13/08/2018The strength of districts

Cllr Isobel Darby, member lead for quality of life at the District Councils’ Network (DCN) and leader of Chiltern District Council, shares ... more >

interviews

Modern policing: the future is bright

06/08/2018Modern policing: the future is bright

SPONSORED INTERVIEW The public sector, and policing in particular, has often been criticised as being slow to adapt to change. But now, says L... more >
Michael King: Time for Ombudsman reform

06/08/2018Michael King: Time for Ombudsman reform

Michael King first joined the Local Government Ombudsman service back in 2004 as deputy ombudsman. At the start of 2017, he was appointed as the ... more >
Helping a city understand itself

06/08/2018Helping a city understand itself

SPONSORED INTERVIEW The urban landscape is changing. How can local authorities keep up with citizen behaviour? Stephen Leece, managing directo... more >
Data at the heart of digital transformation

03/04/2018Data at the heart of digital transformation

SPONSORED INTERVIEW Grant Caley, UK & Ireland chief technologist at NetApp, speaks to PSE’s Luana Salles about the benefits of movin... more >

public sector focus

View all News