Social value law comes into force amid calls for legislation to be strengthened
The Public Services (Social Value) Act comes into force today amid calls from a body representing social enterprises for the legislation to be strengthened.
The Act requires public bodies to consider how the procurement of services may improve the economic, social and environmental well-being of the relevant area.
However, Social Enterprise UK called for the creation of social value to be made a legal requirement of all public service contracts.
The group also said the Act should be:
- extended to apply to the purchasing of goods and works as well as services; and
- supported with statutory guidance “so that it can be effectively implemented”.
Peter Holbrook, Social Enterprise UK’s chief executive said: “The Act has the potential to create a more level playing field for social enterprises and charities that are often squeezed out of public services by larger private providers.
“Social value in the DNA of contracts will help banish a culture of commissioning that always defaults to lowest cost and is responsible for the mass degradation of services.”
Holbrook added: “This law, if strengthened, has the power to improve standards across the board as private companies will also come under pressure to deliver social value to win contracts.
“The Act throws national and local commissioners a lifeline, giving them the freedom to choose providers that deliver whole community prosperity.”
Earlier this month the Cabinet Office issued advice for commissioners and procurers on the effect of the Act.
Liz Cooper, a partner at Bevan Brittan, said the legislation emphasised the importance of pre-procurement planning before a contract is advertised.
"Many authorities already consider social value issues as part of their pre-procurement planning and incorporate relevant approaches into their procurements," she added.
"However, this needs to be more than just a tick box exercise - judicial reviews concerning equalities, where similar duties apply, are a reminder of this. Authorities need to make sure they have robust audit trails demonstrating that proper consideration has been given and appropriate actions taken."
Nick Hurd, Minister for Civil Society, said: “As taxpayers, we should all want those buying services on our behalf to get as much value as possible. This Act is an important step in encouraging public sector commissioners to think harder about maximising value to communities. It also supports our commitment to make it easier for charities and social enterprises to help deliver better public services.”
See also: Local Government Lawyer’s Procurement Law Special Report 2012 in association with Bevan Brittan.