Businesses seeking to win government contracts will have to set out how they will also deliver social value priorities - including Covid-19 recovery measures.
Government departments will use the social value model to assess and score suppliers on the wider positive benefits they bring by delivering the contract.
The aim is to maximise value for money for the taxpayer while building a more resilient and diverse supplier base.
The measures seek to promote new jobs and skills, encourage economic growth and prosperity, tackle climate change and level up the UK, according to the Cabinet Office announcement.
The new approach will mean there will be more opportunities for SMEs and social enterprises to win government contracts by demonstrating the full extent of the value they would generate.
The government stated that “value for money will still be paramount, but a bidder’s social value score will be incorporated into assessment of contracts”.
The new approach will apply tests that all bidders, irrespective of size and type, will be capable of meeting and therefore further levels the playing field for the UK’s small businesses, start-ups and voluntary and community sector organisations and social enterprises, said the government. The measures come into effect on 1st January.
Cabinet Office Minister, Julia Lopez said: “Government has tremendous buying power, spending £49bn each year on contracts for vital public services. Value to the taxpayer should lie at the heart of our procurement decisions. Too often, however, ‘value’ has been narrowly defined by price without taking into account other important factors such as the number of local jobs or apprenticeships a contractor will provide, the care they show the environment in their business practices or the number of SMEs involved in their wider supply chain.
Commercial teams in all government departments will be expected to complete training in implementing the model. The changes mean that central government will now be required to go further than the Public Services (Social Value) Act 2012 to ensure that all major procurements explicitly evaluate social value, where appropriate, rather than just consider it.
The move was welcomed by experts in the field of social value.Arnab Dutt, the chair of the Social Value Policy Unit at the Federation of Small Businesses, said: “I welcome the announcement on social value procurement as an important step forward for public sector supply chains. Its focus on addressing economic inequality, the climate emergency and societal wellbeing is a 21st century agenda.
Mark Fox, chief executive of the Business Services Association, added: “This is a good initiative putting people first by focussing on social value. It helps push up standards and best practice.”
Matthew Fell, CBI chief UK policy director, told Facilitate: “So many companies are already delivering social value across a variety of sectors, from FM to manufacturing and lT services, and they will welcome the launch of a new Social Value Framework to help drive greater consistency across government contracts.
“Greater clarity will help commissioners and suppliers sing from the same hymn sheet, resulting in more opportunities to deliver social impact for the public.
The social value model which departments will assess contracts on includes:
- Supporting COVID-19 recovery, including helping local communities manage and recover from the impact of COVID
- Tackling economic inequality, including creating new businesses, jobs and skills, as well as increasing supply chain resilience
- Fighting climate change and reducing waste
- Driving equal opportunity, including reducing the disability employment gap and tackling workforce inequality
- Improving health and wellbeing and community integration