Hancock: Social Value Act should deliver on “revolutionary” promise

The Social Value Act has not yet delivered on its "revolutionary" promise, according to the secretary of state for digital, culture, media and sport.

Speaking at an event in London on 16 May, Matt Hancock was referring to the Public Services (Social Value) Act 2012 which requires public sector commissioners to consider the social value as well as the financial value when awarding contracts. The act has been criticised for its lack of impact.

Hancock emphasised that he wanted to see more local services delivered by small, local organisations.

"Something is seriously amiss when in some markets 60 per cent of public procurement goes to just five huge companies," he said.

"I want to see a far more plural supply of public services with a lot more mutuals and other value-adding innovations."

He added that the government was exploring how to ensure the Social Value Act could "deliver on its revolutionary promise, which has not nearly been met yet". He also highlighted the government's enthusiasm for social impact bonds.

Accompanied by civil society minister Tracey Crouch, who also has responsibility for sport and loneliness, Hancock's speech was delivered at an event hosted by the Department for Digital, Culture, Media and Sport to discuss the forthcoming Civil Society Strategy

The overall narrative is more or less the same – an overemphasis on social impact bonds and a lack of ambition when it comes to the potential of social enterprise - Peter Holbrook

Peter Holbrook, chief executive of Social Enterprise UK, dismissed Hancock's words as insignificant.

"Today's speech by Matt Hancock, whilst delivered with panache, is more of the same from a government that is increasingly looking bereft of good ideas," said Holbrook. 

"Whilst we welcome the secretary of state’s recognition of the latent power of the Social Value Act to transform procurement and breathe new life into communities left behind, the overall narrative is more or less the same as it has always been – an overemphasis on social impact bonds and a lack of ambition when it comes to the potential of social enterprise."

Hancock said that in the current times of change, the country needed a "radical community spirit once again".

"I want to argue that today we face a concatenation of change, which is forcing us to think hard about the country we are becoming – and the country we want to become," he said.

"And you all have a role in that. Times of great change bring great opportunities, but they also challenge our social fabric. They risk us pulling apart as a society. 

"And these changes are begetting a great yearning in our country, I think, a yearning for belonging, and for place, and for connection."

He emphasised that he wanted to see the civil society sector develop a more sustainable operating model", and that the Civil Society Strategy was focused on supporting the sector to become "better capitalised and more resilient".

Business had a role to play in this. "I believe strongly in business as a force for good," he said, and pointed out that he welcomed calls for people to have "more power to direct their investments to good causes".

However, he said that he didn't believe that commissioning public services and payment by results were the answer to everything. "Tracey and her team are looking closely at whether we can deliver a new era of public sector grants - Grants 2.0 let us call them - without sacrificing the efficiency and focus on outcomes that contracts are deigned to achieve," he said.

Holbrook said he wanted to see more of the enthusiasm for social enterprise that that Conservative party had while it was in opposition. "Government needs to bring back this Cameronian era zeal for social enterprise and take civil society more seriously," said Holbrook. "For social businesses this would start with moving responsibility out of DCMS and into BEIS. Social enterprises are businesses and the government needs to see them as such.”

Header image of Matt Hancock courtesy UK Prime Minister's office.