Chris White at eWorld – Social Value Drives Cultural Change

At the eWorld event last week, the first keynote was given by Chris White.

He was a Conservative MP and at one point “Social Value Ambassador” after his private members bill led to the Social Value act of 2012 being passed into UK law. But Wikipedia says he was sacked from that role because he voted against the government on Syrian intervention, which seems very petty. He didn’t get elected to Parliament until he was 43 and he has an engineering degree, but he lost his seat in the 2017 election.  Earlier this year, Kings College London established the Institute for Industrial Strategy, with White as its first director.

His session at eWorld was titled “Achieving Cultural Change Through Procurement: The Social Value Act”, and he spoke without PowerPoint slides – it was a pretty formal speech, but it was good to hear the story of how he got the Social Value Act through. Whatever happens in the future, he deserves great credit and he has made a personal difference in a way that few back-bench MPs ever will.

To get the bill through, it had to be the “lightest touch” possible, he said – hence why some observers criticised it for not being tough enough. It “asked people to be creative” in how the social value principles would be applied.

The Act requires local authorities to give greater consideration to economic and social factors when letting services contracts. It has become very significant, and White said that social enterprises now employ 2 million people. However, some worried that the Act would cost money, and there have been questions around how you measure the effects; initially, it was adopted sporadically.

The Act was reviewed by Lord Young in 2015, which demonstrated government was interested and wanted to improve its effectiveness. White himself then wrote “Our Money, Our Future” on behalf of Social Enterprise UK. “Public procurement needs to shape an inclusive society”, as he puts it.

So, the big change this year follows a speech from Cabinet Office Minister David Lidington, on June 25th, which said all public spending should take social value into account, and it should be more than just “giving it consideration”, as the initial Act said. Buyers should “explicitly evaluate social value where appropriate”.  There is a commitment to train all 4000 of the government’s buyers, and there will be clearer guidance from the centre too.

This is all about trust, White said, trust between public and private sector, between suppliers and the people of this country. After the Carillion failure we need to re-define roles, and social value thinking can “go some way towards preventing the next Carillion”. Socially beneficial businesses are becoming mainstream, we need to provide an economy that works for everyone - and the millennial generation wants to make a difference.

When it came to questions, I made two comments. I should say that I am a big supporter of social value – there are lots of practical issues around procurement, evaluation processes, measurement and so on, but in principle, this is good stuff. But firstly, I said, we have to be careful that we don’t create yet more barriers to entry for smaller firms in particular trying to break into government markets.

Anyone who knows how these things work will know that the big firms – in IT, BPO, whatever – will make sure they know how to respond to tenders with convincing social value proposals. That’s fine, as long as they do what they promise, but it is not as easy for a start-up or SME in the bidding process.

Secondly, I said that it is naïve to think that Carillion would not have failed if the firm had been more conscious of, or involved with, the social value concept. Carillion failed because of several factors: balance sheet issues, under-pricing bids, greed, lousy management … I don’t see how that would have changed if they were employing a few more apprentices, recycling more plastic or giving talks in schools to encourage female engineers.

That doesn’t mean we shouldn’t promote social value – but it is not a panacea for all the issues around public sector management of large suppliers, and it won’t solve in itself the trust issue White correctly identifies. There are deep issues around procurement processes, the effectiveness of certain markets, incentives, greed even, that won’t be easily solved.

Anyway, White replied to my comments by saying something along the lines of “I don’t usually get called naïve on the second question” so I think I upset him! That was not my intent - and I hope he might read this article and understand the point I was making. As I said, he achieved something very impressive, and he continues to be an advocate for positive actions that can bring considerable benefit.

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