What does the Public Services (Social Value) bill mean for suppliers?

(We’re pleased to feature another guest post from Ian Makgill of Ticon & GovMark, who carry out research into public procurement for potential suppliers to govenrment).

The Public Services (Social Value) Bill was passed into law earlier this month and will bring a new regime into force for suppliers looking to win business from government. The bill requires buyers to evaluate contracts on the basis of their social, economic and environmental impact and then to monitor any commitments that suppliers make in those areas.

The bill requires buyers to set up an evaluation model that will affect all bidders in a procurement. It remains to be seen how much weight buyers will give to social values, but there are a raft of pressures groups ready to challenge those who look like they're only paying lip service to the new law.

It will also be interesting to see how suppliers respond. Are they going to opt to simply beef up their CSR programmes or will they look to take a genuinely proactive approach? What if you're a bank that received a public bail-out, how on earth are you going to persuade the public sector that you're a force for social good?

Here's a list of three areas that suppliers could look at once the bill comes into force later in the year:

1. Job creation - suppliers who can demonstrate that they are putting jobs into the economy will have an advantage over suppliers who opt to outsource work abroad. Those who outsource work abroad will have to make a strong case that the reduced costs to the buyer will have a positive economic and social impact.

2. Supply chain management - where there is an opportunity for suppliers to use sub-contractors in their work, they will want to demonstrate that they are recruiting locally, and that sub-contractors are being paid on the same terms as the prime contractor. If sub-contracting opportunities can be passed on to social enterprises then even better.

3. Community initiatives - developers and construction firms are used to being asked to make contributions to the community infrastructure when they build new buildings. Other companies are going to be expected to do the same. Consultancies may want to volunteer at local schools, and IT firms may provide software or services that benefit a local charity.

(Editor's note - we'll undoubtedly come back to the ramifications of the Bill over the next few weeks and months!)

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