Why the Social Value Act needs another push

We've proved that considering social value in public procurement can work, now – post-Carillion – the UK government must have the courage to help it reach its full potential, says the author of the Social Value Act

I was a bit surprised when cabinet office minster David Lidington announced on 25 June that the government was going to extend the Social Value Act to ensure that all central government ‘major procurements’ explicity evaluate social value (rather than just consider it). Not because I think it is a bad idea, quite the contrary! I think the announcement is a very positive step forward. 

I was surprised because, despite it being over eight years since I introduced the Public Services (Social Value) Act into Parliament, time and time again, the government keeps returning to the Act and its purpose. But then I shouldn’t really be surprised. 

The idea behind social value – that we need to spend public money in a smarter way – is never going to go away

Whilst money remains tight and the need to improve public services grows, procurement, and in particular social value, will keep finding its way to the top of the agenda. The idea behind social value – that we need to spend public money in a smarter way – is never going to go away. 

Government, it appears to me, is learning the lessons from Carillion, but there are still concerns about the risk of government falling back into more ‘established’ behaviours. It is easy to push for reform when Parliament and the media are still investigating the failure of a major supplier like Carillion. What will the picture be like in 18 months’ time when public attention has shifted again and civil servants, under new pressures, have begun to forget the mistakes of the past? 

Legislation will help nudge social value over the line

This is why the extension of the Act is so important. Legislation is needed so that this is something that commissioners cannot ignore and which drives everyone to be more acutely aware of the need for better decisions about how public money is spent. There is a lot of talk about culture change in the public sector – and culture change is critically important. But legislative and regulatory change are equally important and necessary. 

Legislation will help nudge social value over the line; you cannot change culture unless there is a momentum and a desire behind it, forcing those who may be reluctant to engage, to do so. Otherwise, social value will just be adopted by the far-sighted leaders in the public sector who probably would have adopted it regardless. It will not impact those who need to be helped in the right direction and that have the most to gain from the social value approach.  

Lord Young’s review into the Social Value Act found that “where it has been taken up, it has had a positive effect, encouraging a more holistic approach to commissioning which seeks to achieve an optimal combination of quality and best value.” 

My review into the Social Value Act for Social Enterprise UK, Our Money, Our Future, two years after Lord Young’s, found that the Act had helped to achieve better value for money in around £25bn of public spending. 

Every time the concept of social value has been put to the test, it has been found to work

We have had eight years to test the concept of social value following the Act, and every time it has been put to the test, it has been found to work. We now have an archive of case studies from around the country which prove that when it is put into practice properly, the public sees the benefit. We just need the courage to implement it across all parts of government: national, regional and local. 

And I would go further. If social value is good enough for major procurement projects, isn’t it good enough for minor ones too? All these small contracts add up to tens of billions of pounds of public money; if it works for the larger organisations, it will work for the small ones too. If anything, the benefits for smaller procurement exercises may be greater as there is a wider opportunity for innovative ideas to take shape. 

Social value is moving inexorably forward. I am sure that in a few years’ time I will again be pleasantly surprised by another ministerial announcement about social value! But the destination is clear. In the end, I believe every public sector contract will be covered by social value – it is just a question of how long it will take for government to get there. 

My message to social enterprises would be: let’s work together to help government reach that end point just a little sooner.