Social value act ‘not understood’ across public sector

British politics might have changed beyond all recognition in the five years since the social value act became law, but as a packed event in the House of Commons last week showed, there is still cross party support for the concept.

The event, organised by the all-party parliamentary group on social enterprise and Social Enterprise UK, was held to discuss the future of social value, following the publication of a recent report by the act’s author and former Conservative MP Chris White.

Speaking at the event, Mr White said the 2015 review into the act by Lord Young had claimed it was not ‘well understood’ by people in the public sector and that it was ‘not being used in a balanced way across the public sector’.

Mr White said that the report also raised questions about how social value can be measured.

‘In the last few years, we’ve seen a lot of that change,’ Mr White said. ‘A number of local authorities are using the act in a way that is most appropriate to themselves. Rather than just applying it to services, local authorities are applying it to goods and works as well.

‘With regard to Brexit, a lot has changed, not least because the act was very much defined by European legislation. That’s not the case anymore. We do not have to be concerned about thresholds or European procurement laws. We can set our own agenda on this.’

‘There is a figure in my report, which says the act has helped to shape £28bn of public spend, which is phenomenal. There cannot be many other acts that have achieved such scale, but we think the total public sector spend is somewhere in the region of £268bn. We can scale right up to that figure and influence the whole of the way that our public services are delivered.’

Mr White also reiterated his belief that social value remains a cross party issue.

‘I think there is a challenge,’ he added. ‘Procurement does not immediately sound exciting. I think that’s something we need to change, so people can see the outcomes of using this act can be very exciting indeed – from offender rehabilitation to purchasing British Steel.

‘I hope colleagues and new parliamentarians will grab this and make sure the government is taking a lead in making sure our local authorities are using this.’

Surrey county council commercial specialist, Cindy Nadesan, described herself as a ‘social value evangelist’.

‘When the act came out in 2013, Surrey council saw this as an opportunity to drive more value through our procurement service,’ she said.

‘So they created a role of procurement improvement officer and dedicated resources to exploring how we could implement the act and realise the value we could create .

‘We looked at our procurement process and engaged stakeholders extensively, so we find ourselves in a position that social value is embedded at every stage of our procurement process,’ she added.

‘Sometimes there is a misconception that rules and regulations prevent us from delivering value for money. As a procurement professional myself, I would say this is absolutely incorrect. The rules give us parameters in which to operate and they give us the space to engage with everyone else.

‘When it comes to social value, we’ve done none of this on our own. We’ve done it by working in partnership with our charities, businesses and other public sector organisations. The more we come together and close the gap, the more impact we will have.’

Former MEP and the chair of the Local Government Association’s ‘innovation and local government procurement’ task group, Malcolm Harbour, said the soclal value act ‘needed to be far better integrated into the whole thinking around public procurement policy’.

‘The industrial strategy is extremely disappointing in this respect,’ he said. ‘In my entire time of working closely with the Cabinet Office on the reform of public procurement, nobody mentioned the social value act’.

The former Labour MP Tom Levitt commented that there should be ‘no limits on how procurers can choose’ to apply the social value act.

‘We should be quite careful about how we measure social value,’ added Mr Levitt. ‘There are more ways to measure social value than people delivering it.

‘We need to say every instance of social value needs to demonstrate it’s worth, but not necessarily in the same way each time.’

Mr Levitt also spoke about the potential for the private sector to take up the ‘social mantle’ and look for social value in its procurement policies.

‘If you talk to someone like Interserve they will say “of course, we have social value provisions, because at any time we could be asked to bid for a contract and we need to be able to demonstrate it”.

“But if you go to Fujitsu’s website, you will see a statement to all of its suppliers, including 900 SMEs, where it says they will be the applying principles of the social value act across all of its supply chain procurement.’

Brexit might continue to dominate the headlines and much of the bandwidth around Westminster, but the large number of politicians from across the political spectrum at the event is a sign that the subject still carries weight, both at a national and local level. The act itself might be five years old, but it is only just getting started, and, as it’s author joked ‘what’s not to like about it?’.

• Social Enterprise UK is holding a Social Value Summit in London on 28 February. To find out more about the event, click here.