The UK Social Value Act and public procurement implications

Cabinet Office has issued a Public Procurement (policy) note concerning implementation from a procurement standpoint of the UK Social Value Act 2012, which requires contracting authorities to think about the wider social value of services (not goods or works) contracts they are letting.

“When it comes fully into force, the Act will require commissioners and procurers at the pre-procurement stage to consider how what is to be procured may improve social, environmental and economic well being of the relevant area, how they might secure any such improvement and to consider the need to consult”.

When considering how a procurement process might improve the social, economic or environmental well being of a relevant area, the authority must only consider matters which are relevant to what is proposed to be procured. "The authority must also only consider those matters to the extent to which it is proportionate, in all the circumstances, to take those matters into account.”

You can disregard this if the procurement is urgent, but not if “undue delay” by the authority has caused the urgency. And note that this is focused on the pre-procurement stage.

The Act doesn’t explain how this analysis should take place. It will apply to Part A and Part B services, and to framework contracts, but not to spend below the EU threshold, or to call-offs from frameworks.

When it comes to what should be done, and if anyone in Cabinet Office is reading this, is there a typo in the second bullet point or am I just not understanding it?

 "What has to be considered in the pre-procurement stage?

The Act requires authorities to make the following considerations at the pre-procurement stage:

  • how what is proposed to be procured might improve the economic, social and environmental well-being of the “relevant area”
  • how in conducting a procurement process it might act with a view to securing that improvement whether to undertake a consultation on these matters"

The Policy Note does include a nice example of a “meals on wheels “ service and how the Act, properly used, could lead to a better service being specified than if these considerations hadn’t been made. There are also further case studies available here from the National Council for Voluntary Organisations.

However, there is a real dilemma with this type of innovation. I do have lot of sympathy with the aims of the Act – we’ve been saying for a while that, particularly given the current economic situation, the government cannot disregard the wider effects and potential benefits from its £200 billion annual “procurement” spend.

However, there are also issues. Just last week, the think tank Reform and the Times complained that too many government initiatives were being delayed by unnecessary or trivial “consultations”. This new Act would seem to introduce a whole new range of likely consultations, preceding sensitive or major services procurement exercises.

And in addition to the bureaucracy, we should be cautious about anything that removes the focus from the more objective aspects of value for money, as it potentially opens the door to corruption. We need to be vigilant otherwise I can see a new wave of dodgy “local” and “public interest“ companies, that turn out to be owned by friends of the council leader or Chief Exec, relatives of the Police Commissioner, or donors to the political party. They won’t offer the best prices, but the justification for them winning business will be “social value”.

However, my reading of this Act and the useful Policy note is that it doesn’t mean introducing different evaluation criteria or weightings for instance  – it is about pre-procurement thought and consultation. As such, it hopefully won’t open the Pandora’s Box of corruption too much.

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Voices (3)

  1. AndyB:

    Peter when I read this I assumed that “whether to undertake a consultation on these matters” was supposed to be a third bullet point.

    1. Peter Smith:

      Of course! Yes, I’m sure you’re right, well spotted (or deduced) Andy.

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