Social Value: How to improve small business and voluntary sector engagement

HomeSocial Value: How to improve small business and voluntary sector engagement


Social value guidance for buyers and suppliers, written by the National Social Value Taskforce with the Local Government Association

According to the UK Federation of Small Businesses, small businesses accounted for 99.3% of all private sector businesses at the start of 2017 and represent 60% of all private sector employment in the UK and account for at least 99.5% of organisations in every main industry sector. The combined annual turnover of MSMEs in the UK (2017) was £1.9 trillion, equivalent to 51% of global private sector turnover in the UK. This is also why past and current UK Governments have put MSMEs at the heart of their strategy, particularly their public procurement agenda.

Since its implementation the Public Services (Social Value) Act 2012 has begun to transform the relationship between the public sector and business creating a more responsible supply chain that recognises that to win work with the public sector business needs to do more
than deliver a services on time and to budget.

Naturally, there is a concern that by including social value into public sector contracting this will create additional burden that will make it harder for Micro, Small, Medium Enterprises (MSMEs) and Voluntary, Community and Social Enterprises (VCSEs) to win public sector work.

However, there is now clear evidence that including social value into contracts actually increases the chance of an MSME or VCSE winning business for the very reason that they are usually local and almost always employ local people. They are also very likely to already
be working with local schools or supporting people back into work. Indeed, local government actually award over 50% of all contracts (by value) to MSMEs significantly
out-performing central government who languish almost 50% behind their declared target to spend £1 in every £3 with MSMEs or VCSEs.

This guidance has been specifically designed to bridge the gap between ambition and implementation and to provide practical advice on how buyers can make it easier for MSMEs and VCSEs to win work and what MSMEs and VCSEs can do to increase their chances of
winning work through social value.

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