Last March, the Public Services (Social Value) Act came into law and will be in effect beginning in January. Under the Act, all public bodies in England and Wales are required to consider the economic, social, and environmental well-being of the area for which they procure and commission services. These include local authorities, NHS trusts, fire and rescue services, and housing associations.
Social Enterprise UK, who has been central to lobbying the Act through Parliament, say the Act is about encouraging public bodies to look beyond the price of a contract, and thinking about what the collective benefit is to a community when a contract is awarded.
In practice, this could mean commissioning the services of an organization to deliver mental health services, where the organization also actively employs people with a history of mental health problems. The social value is to allow the person with mental health problems the opportunity at employment and becoming more socially included.
The Act was lobbied in the midst of concerns over a small number of large companies having stakes in public service markets. Over the years, government has purchased services from private companies for waste management, children’s homes, adult social care, education services and a variety of other services. Among many fears by critics is that these companies have a great deal of control over how they work, they become too big to fail (if they go under it would affect the welfare of many people), and public money is being taken out of the social economy to be redistributed to private investors and individuals through shareholder dividend rather than being reinvested in the improvement of services. At the same time, the government has announced more outsourcing in the NHS, police force, and prisons.
Given the nature of the Act, smaller providers such as social enterprises and charities, who have at their core a consideration for social and environmental well-being, are given a boost to compete for government contracts. Still, the jury is out on whether the Act will deliver. For example, Julia Slay, researcher at the New Economics Foundation, tells The Guardian that it can be difficult to measure social value by looking at one metric versus another to decide on the best approach. And while local authorities may be interested in social value creation, “progress might be patchy” given the financial climate and headcount reductions.
On the other hand, some believe local authorities will assess social value to meet a legal duty as an act of compliance. But the result may be contracts that meet minimum criteria. It may not mean maximizing social value. While others who aspire maximum social value will use the Act as a springboard for their decisions.
Come January, the Social Value Act will apply to any procurement contract awarded by the central government or NHS worth more than £113,000, and by local councils worth more than £173,000, according to EU procurement rules. A spokeswoman for the Cabinet Office told the Third Sector that the Act will apply to services contracts whose value exceeds the two thresholds. The National Council for Voluntary Organisations, the umbrella body for the voluntary and community sector in England, is talking with the Cabinet Office in hopes that the Act will not be limited by these thresholds so that it applies to all levels of commissioning.
