No need for special favours to social enterprise, says Cable

Giving social enterprises special treatment in the battle to win public sector contracts is not on the agenda for the UK government.

Vince Cable MP, Secretary of State for Business, Innovation and Skills, has told Pioneers Post that the government already provides the social enterprise sector with support to bid for public services contracts.

Cable – an influential Liberal Democrat member of David Cameron's Coalition government – was responding to Labour’s pledge earlier this month to make some public sector contracts available exclusively to social enterprises, if Labour wins the upcoming general election next year.

The issue could be an interesting area of election debate as the parties seek to find areas of differentiation. 

Asked by Pioneers Post what he thought of Labour's new policy announcement, Cable said: “There are quite strict rules around procurement because otherwise it can become corrupt, people handing things out to people they know and so on… The Social Value Act 2013 already works to incentivise local councillors to go to social enterprises and small businesses in public contracting.”  

There has been broad support of the 2013 Act – but also criticism of the 2013 Act over just how effective it is in promoting social enterprise in the UK. Julian Blake, partner at Bates Wells Braithwaite, the leading law firm in the charity and social enterprise sector, said: “There is a lot of prejudice against social enterprise, and a belief that they are inefficient because they don’t make profit.”

Speaking at a ceremony held in Westminster to celebrate the creation of over 3,000 businesses through the Outset programme, Cable admitted that there had been issues with the implementation of the Social Value Act 2013.

He said: “I think what had been happening was that particularly local councils were so petrified of falling foul of the rules on public procurement that they were deliberately not using smaller companies and social enterprises when they should have been.”

There is always more to do but we are proud of our record since 2010 in creating the right conditions for Social Enterprises to contribute to our growing economy.

The Outset programme is a service that offers fully funded enterprise coaching and business start up support in England, with a focus on helping individuals from deprived areas out of unemployment.

A Cabinet Office spokesperson told Pioneers Post: “As part of our long-term economic plan this Government's reforms are helping to create a much greater role for social enterprises.

“We have a broad range of measures to help them win new contracts and have provided opportunities for investment as well as practical support. There is always more to do but we are proud of our record since 2010 in creating the right conditions for Social Enterprises to contribute to our growing economy.”

Since 2010, the measures introduced by the government to support social enterprises include:

  • the introduction of the Commissioning Academy, which supports senior commissioners from across the public sector to understand provider perspectives, including those of social enterprises.
  • the creation of the Cabinet Office Mystery Shopper service, through which social enterprises can complain to if they feel procurement has been done badly
  • the launch of the Investment and Contract Readiness Fund, which has made £10m available to support social enterprises build their capacity to win public sector contracts.  


Image of Vince Cable MP. Photo credit: Foreign and Commonwealth Office, Flickr