The UK Social Value Act, which came into force in 2013, requires public authorities to consider the social, economic, and environmental impact of their procurement activities when awarding contracts. The Act aims to ensure that public procurement is used to generate broader social value, and not just to secure the lowest cost…in layman’s terms, it ensures the taxpayer receives value for money. The Act was passed to ensure each pound of public money spent delivers as much value and effectiveness as possible.
The Act might play its part in creating job opportunities for local people or promoting environmental sustainability, or maybe even supporting small and medium-sized enterprises (SMEs) and charities. It also insists that public authorities set out how they will measure and report on the social value of their procurement activities. This includes setting out the outcomes they expect to achieve, and how they will measure and report on progress against these outcomes.
The Act may be particularly beneficial for people who may have struggled to find work in the past—such as young people, those with disabilities, or people from disadvantaged backgrounds. It benefits the local community when awarding contracts to charities and social enterprises, as they’re commonly set up to address social issues. Public authorities, to adhere to the Act, may consider the environmental impact of their procurement activities, and subsequently award contracts to businesses that have a commitment to environmental sustainability and conserving natural resources, which also benefits society.
Though individual donors to a charity aren’t governed by the Act, they are likely to have the same concerns around the possibility of their money being wasted. In this cost-of-living crisis, financial transparency is more important than ever, and charities will have to work very hard to demonstrate the effectiveness and impact of any spend if they’re to keep donors on side. Households and businesses have been forced to cut back, streamline their efforts and outgoings, and in some cases, go without altogether in this crisis. It’s not a surprise that charities are being asked to do the same.
The Act should be upholding this approach, too.
Maybe for ease and through familiarity, contracts tend to be awarded to large companies; however, large companies have more overheads than smaller companies. If charities are to successfully sail through our current economic crisis, those responsible for procurement in local authorities should make a point of giving contracts to good causes, wherever appropriate and applicable.
Innovation during a financial crisis is risky. If a new project or enterprise fails, it could waste money and damage an organisation’s reputation. On the flipside, innovation may be exactly what’s needed to bring a longstanding service into the twenty-first century, in order that it may trim extraneous costs and adopt technology that could save both time and money. The same goes for those in procurement…just because they’ve always handed a contract to Joe Bloggs year in, year out, doesn’t mean that they should always assume the company automatically represents the greatest monetary and social value. This should be part of a committed drive in the current economic climate, to choose best value, even if it does mean going with a brand-new supplier and filling in some extra paperwork.
The Old Boys’ Club can go do one, frankly. I really wish those in Westminster would take heed of that, too. The Social Value Act is in place to ensure fairness—let’s just hope it’s doing its job.