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John Tizard: Let’s radically strengthen the Social Value Act – let’s change culture, not just the rules

Monday June 10th, 2019

The Government is currently consulting on the future and potential strengthening of social value legislation and regulation.

John Tizard

John Tizard

This is to be welcomed.

When a public body spends public money, whether through directly managed services, campaigns to influence public or business behaviour or procuring services and goods, it should always seek to maximise public benefit. I would argue that public bodies and their political leaders should be held to account for maximising public benefit achieved by their public expenditure.

The Social Value Act has made a difference but sadly it has not realised its full potential. It is too narrow in focus in that it only applies to the public procurement of services and not to the purchase of goods. Too often the anecdotal evidence suggests that those public bodies, particularly local authorities, which have embraced the Act the most are those that would have always taken social, economic and environmental impact into account when procuring public services. One wonders how much the others have significantly and consistently revised their procurement objectives and practices. One hears of public bodies that promote social value as a key element of their procurement evaluation criteria whilst in practice falling back on price-driven contracts.

My view is that whilst the legislation and regulations should be reformed and strengthened, what matters most is changing attitudes and behaviours. Change should start with bold and focused political leadership, not with more detailed rules. Local government and much of the public sector has proved its ability to comply with the rules without embracing the underlying principles and objectives.

If I were to reform the Social Value Act I would:

  • extend the duty to take social value into account for all public expenditure including when procuring goods as well as services
  • extend the Act to cover all of the public sector
  • place a duty on council leaders, PCCs, ministers and NHS NED chairs, and not only on their organisations
  • require public bodies to account for their pursuit of social value and their realisation or not of it, including an annual independently audited report to the public and stakeholders
  • require public bodies formally to engage the voluntary and community sector, trade unions and others in developing social value policies, criteria and means of applying and monitoring these policies; and to be transparent about such processes and policies
  • place a duty on local authorities to shape place-based social value policies and practices and on all public bodies including schools, colleges and universities to contribute to this process
  • introduce legalisation/regulation to broaden the definition of social value to include wider public benefits including democratic accountability and engagement, the holistic impact of decisions on present and future public expenditure and local economic, environmental and social well-being, etc.

When setting and evaluating against social value and public benefit policies and criteria public bodies should:

  • ensure that policies and criteria are both practical and achievable as well as consistent with their wider public policy goals – eg community wealth building
  • adopt proportionate approaches
  • price social value into contract prices and fees (and expect suppliers and contractors to do so)
  • avoid discrimination against smaller suppliers
  • not assume that any one sector has a monopoly on social value – this especially applies to charities and the VCSE – though along with the public sector most VCSE organisations will inherently have a bias towards social value as part of their wider value set
  • encourage innovation and innovative means of securing social value and public benefit
  • develop longer-term programmes to influence and shape behaviours in their own organisations and the cultures and behaviours of suppliers
  • adopt approaches that enable them to consider bidders’ ethos and behaviours – for example as far as the procurement regulations allow issues such as remuneration policy, employment practices and tax practices
  • adopt ‘strategic make or buy decisions’ in respect of public services with a default of in-house services and being clear that there would only ever be outsourcing or contracting of services when there is a clear public interest in doing so and when social value can be maximised – social value policies and legislation should not provide a cover for inappropriate public services outsourcing

Chris White’s Social Value Act has achieved a great deal and we owe a big thank-you to him, but now is the time to build on this foundation in a way that goes much further than the Government’s current proposals. The original Act was bold, so let’s be even bolder today – let’s radically strengthen the Social Value Act but above all let’s change culture, not just the rules.

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