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Transforming public sector services

Source: Public Sector Executive March/April 2013

Peter Holbrook, chief executive of Social Enterprise UK, discusses the potential of the Social Value Act and how councils can make the most of this when commissioning services.

In January, a groundbreaking new law came into force: the Social Value Act. For the first time, all public bodies in England and Wales are required to consider the social value created in an area when awarding each public service contract. The Act has been met with mixed reactions – some in local government circles are wary of how it will affect their commissioning practices, and those delivering services feel daunted about the pressures to prove the social value they create in order to win contracts.

Despite this, there is a strong belief across the board that the Act, if properly implemented, has the potential to transform the way public services are delivered in the UK, and will unleash billions of pounds worth of public spending power to create better services that benefit whole communities.

It is hoped that the Act will improve public service markets so communities benefit more, and help social enterprises and charities carve their fair share of the public service pie. Social enterprises and charities have a strong track record of delivering added social value, so are well-placed to help public bodies implement the Act. They work at the heart of communities and, unlike private companies, reinvest profits, meaning money stays in local economies instead of leaking out into shareholder dividends.


In some areas, the tenets of the Social Value Act are already being applied in hard policy. Camden Council has developed a systematic way of accounting for wider social, economic and environmental impacts of services, while Durham Council has worked with legal experts to implement a programme dedicated to achieving social value.

Liverpool is another trailblazer in the social value commissioning movement. The Liverpool Fairness Commission and the City Council are committed to getting social value in their procurement practices by contracting from organisations with a smaller gap between highest and lowest paid staff, social enterprises, and providers that can demonstrate clear local benefits (see PSE Nov/Dec 2012 for in-depth coverage of Liverpool’s new policy).

And in a recent announcement made at SEUK’s Social Value Conference, the Mayor of Liverpool outlined the introduction of a Social Value Taskforce to ensure that the Act is used by commissioners in the city.

But while some public bodies have already made headway, many have not yet caught up with the Act, and some remain completely unaware of its existence. For these organisations, it’s important to establish the first steps and considerations they must make to help them adopt social value into their work.

Adapt, identify, assess

First, councils must be confident when deciding the type of social value they want to create. While the Act’s lack of descriptiveness is specifically designed to allow services to adapt to the needs on the ground, being clear in contracts about the social value a council wishes to achieve is crucial. For instance, social value could be used to achieve other aims, such as core strategic objectives – commissioning in this way can be an incredibly cost-effective way of delivering services.

Second, what does social value look like in your area? Councils need to engage with local communities and find out what the pressing social needs are on the ground. Getting a better grasp on this will help with the design of contracts and give a clearer idea of the social value that needs to be achieved – whether it’s job creation, rebuilding degraded housing or providing homecare services for the elderly.

Another question frequently asked by councils is, how do we assess social value? At present, there’s no standard measure. But there are plenty of systems in place to help judge social impact – some are listed on Social Enterprise UK’s website.

Working together

Choose one that works for you and make sure your contracts clearly outline how you measure social impact – having a strong idea of the results you wish to achieve means providers will be in a better place to deliver them.

Finally, and perhaps most importantly, commissioners, procurement officers and providers must talk to providers. Working together and sharing ideas about how social value should be delivered is key to developing services with the biggest social impact. Close working partnerships need to be developed so that the social value created in public services can be improved and adapted over time to meet the constantly changing needs of local communities. It’s the only way to ensure the Social Value Act has a real and lasting impact.

Undoubtedly, there is still a lot of work to be done to make commissioning for social value a seamless part of procurement practices.

Public bodies must share experiences and call on social enterprises to help them make full use of the Social Value Act across the UK – if they do, it could become one of the UK’s most effective tools to tackle the growing number of social and economic problems that we face.


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