Chris White MP says that the Social Value Act has the potential to transform public sector buying, to save money and unlock the inherent good in business
At the launch of the Social Value Maturity Index this week, Chris White MP said: “Councils and public services currently face huge economic uncertainty as a result of the Brexit vote against a backdrop of more than a decade of austerity. The Social Value Act has the potential to transform public sector commissioning and unlock additional value from business’’.
Chris White MP, who was responsible for ushering the Act through Parliament, followed on to say: “this opportunity is being lost because public procurement officials and politicians do not know how to apply the Act properly, but I am hopeful that initiatives like the Social Value Maturity Index will give all public sector bodies the confidence to apply the benefits of the Act more widely and embed it into the commissioning and procurement decision making’’.
At the launch on Tuesday, Guy Battle, the Chief executive of the Social Value Portal and founder of the best Practice Social Value Task Force said that ‘’the Social Value Act is being under-applied nationally – and local authorities and other public bodies are missing out on billions of additional value from their suppliers’’. He went on to say that ‘’If properly applied, the Social Value Act has the potential to recoup public bodies an additional £8bn per year* in “Social Value”, and yet another £3.6bn if including Social Value into their capital- projects budget”.
Many procurement officials say they lack sufficient resources and don’t know exactly how to engage with their contractors to maximise Social Value. But in fact, research by Harrow Council found that properly applying the Act only added an extra half a day to the procurement process.
What is Social Value and why is it important?
Social Value has the potential to transform the way in which public services are commissioned, creating additional social, economic and environmental benefits.
The Public Services (Social Value) Act 2012 came into force in January 2013 as a result of a Private Member’s Bill sponsored by Chris White MP. It requires public bodies to ‘consider’’ Social Value within their commissioning and procurement processes.
In effect, this means that firms can be asked to offer goods, services, facilities, training and other benefits to end-users as part of their proposal – but over and above the stipulated provisions. Public bodies can then choose the bidder who offers the best additional perks as well as offering value for money.
The word “consider” allows public organisations considerable freedom as to when and how they apply the Act. But uptake has been inconsistent over the past two and a half years despite the benefits for which the Act has been responsible.
As it is, some in the public sector who have embraced the Act, are reaping the following benefits:
- Harrow Council is looking to deliver an additional 20% Social Value on all contracts over £100,000 with the potential of realising over £40m per annum
- Bury Council has agreed an additional £400,000-worth of Social Value on a new financial services contract with Barclays
- Halton Borough Council has implemented a way of valuing additional Social Value in terms of financial outcomes and is using this across all contracts
- Surrey County Council has a dedicated Social Value and procurement improvement officer
- Legal and General have identified a potential additional £10m per annum in Social Value for Hammersmith and Fulham Council
- Birmingham City Council has implemented a business charter for social responsibility that is delivering significant additional value across the region
Launch of Social Value Maturity Index – a free and easy way for organisations to get their head around Social Value
Chis White’s comments come as a task force of both public procurement and private sector partners launch the Social Value Maturity Index tool, <SVMI>. The tool was officially unveiled at an event on 13th September at Portcullis House in Westminster. Speakers included Chris White and Jonathon Porritt CBE alongside a panel consisting of a number of procurement heads.
The Social Value Maturity Index allows both public and private sectors to maximise Social Value and win more bids with savvy councils to create stronger communities.
Chris White MP has been kept up-to-date on both the work of the Social Value Portal and the task force. He says: “The Social Value Maturity Index, developed by the Social Value Best Practice Taskforce, is a significant contribution and a useful document in providing case studies as well as guidance as to how to make the most of the Act. “I am fully supportive of it and these reports and I hope that they provide the tools needed for the Act’s take-up to become more widespread across the UK.”
The Social Value Act is a great opportunity to deliver more value to communities. And the Social Value Portal, our new <SVMI> tool and a suite of Bridging the Gap documents will to show you exactly how to achieve it.
* Public sector data from the Local Government Association 2014/15