A recent report, published last month by Social Enterprise UK and Chris White, the author of the Public Services (Social Value) Act 2012, asserts that the UK Act Government is “missing a trick” by not extending the Act. In the report, Our Money, Our Future, Chris White says that the Act currently influences approximately £25 billion of public sector spending, but that £243 billion of public spending is outwith the remit of the Act.
What is the Public Services (Social Value) Act?
The Public Services (Social Value) Act came into practice in 2013. It requires those who commission public services to “consider” securing wider social, environmental and economic benefits from the money they spend under certain circumstances. Rather than focusing commissioning decisions solely on price and quality, commissioners can also consider local issues and requirements. The report lists several examples of this, such as delivering apprenticeships, improving the local environment, supporting charities and social enterprises, helping people with disabilities into work, employing ex-offenders, tackling homelessness, reducing food waste and many more.
The Act currently applies to services procured in England which meet EU procurement thresholds, though it has been adopted more and more widely by local authorities following subsequent reviews. However, social value is subjective, meaning different things to different people; and social and environmental problems differ widely area by area. Thus, commissioners may struggle to interpret the Act and suppliers may not be able to interpret social value questions correctly.
What does the new report say?
The five main recommendations in the Report are:
- The Act needs to be extended to all public spending and further to decision making.
- The Act should be strengthened, requiring commissioners to “account for” rather than just “consider” Social Value.
- Social Value must be included in devolution deals.
- Changes to the Act need to be reinforced by clearer statutory guidance from the Government
- A State of Social Value Audit should be undertaken regularly and independently, with the support of the Government.
Were the Act to be extended to cover goods and works, in addition to services; and thresholds be removed – covering all public sector spending, which amounts to £268 billion annually – then the benefits already ushered in by the Act could be improved ten-fold, the report argues. With massive infrastructure projects currently being commissioned, such as HS2, which will accounts for billions of pounds over the next decade, it is argued that the time is ideal to reap maximum value for every tax-payer pound spent, not just in cash terms but in terms of social, environmental and economic benefits to those living where these massive projects take place.
The concept of strengthening and extending the Act is supported by a number of organisations, covering all three sectors – public, private and voluntary, as well as those from a wide range of political opinion.
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