New research by the Confederation of Business Industry (CBI) shows that there is widespread agreement between business, charities and the public sector on the importance of embedding social value in central and local government contracts.
However, the report, Valued Partnerships, says progress is being hamstrung by complexity and confusion around how it is being applied.
The Public Services (Social Value) Act 2012 challenged public sector commissioners and providers to improve social, economic and environmental factors as part of contract delivery, defined as “social value”.
Examples included working with charities, creating apprenticeships or reducing greenhouse gas emissions.
Although this has led to progress, Valued Partnerships shows the definition of social value needs to be updated if commissioners and suppliers are to deliver maximum impact.
Reducing complexity and increasing consistency in how social value is measured across the UK’s regions and nations will boost competition, allowing businesses of all sizes to compete. With a new social value model expected from central government later this month, the CBI argues that there is no better time to be driving the social value agenda forward at speed.
Introducing the report Liz Crowhurst, CBI head of infrastructure and public sector policy, said: “Companies are already delivering substantial social value across a variety of sectors, from construction to manufacturing and lT services.
“Whether creating apprenticeships and investing in training, investing in employee wellbeing or increasing renewable energy consumption, responsible firms have been contributing significantly to social value for years.
“Yet the lack of consistency in government contracts is hampering further progress in embedding social value more widely. Until there is greater clarity, there is a danger that significant opportunities to deliver greater social impact for the public are being missed.
“Therefore what’s needed is a more consistent approach to defining and measuring social value ensuring commissioners and suppliers are singing from the same hymn sheet.
“Ultimately, supporting public bodies deliver on national policy objectives, such as levelling up and reskilling through partnerships with suppliers requires renewed effort to effectively measure and apply social value. This report sets out some clear steps as to how this can be achieved.”
- Publish a national policy statement every five years setting out what key policy areas the social value agenda will focus on.
- The next iteration of the government’s playbook should set out how social value should be a mandatory and distinct category of discussion during pre-procurement supplier engagement to enable a dialogue from an early stage of procurement.
- The procurement green paper should recommend changing procurement rules, moving away from cost criteria to explicitly requiring commissioners to consider non-economic benefits (including broader social value, social impact, sustainability objectives, or corporate social responsibility) when making decisions.
A Cabinet Office spokesperson said: “We are committed to ensuring that government contracting takes social value into account, as well as continuing to deliver value for money.
“That is why we have made sure that central government contracts consider areas such as the employment of disabled people, the use of social enterprises and the protection of the environment when considering potential suppliers."
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