Northern Ireland’s long-awaited social value policy opens door to £3bn annual spend
Procurement officials in Northern Ireland will have to score bids for social value as well as cost and quality, in a move welcomed by social enterprise advocates as “a major step forward”.
Under the new policy on scoring for social value, announced yesterday by finance minister Conor Murphy, government tenders must allocate at least 10% of total award criteria to social value. Definitions of this can vary depending on the contract, but may include creating jobs in deprived areas, providing environmental benefits or safeguarding workers’ mental health.
The minimum weighting – which could be increased to 20% from 2023 – will apply to service contracts of over £123,000 and construction contracts over £4.7m.
Contracts will also be required to pay a living wage, as calculated by the Living Wage Foundation.
The Northern Ireland Executive spends £3bn a year buying goods, services and construction from the private and third sectors.
In a statement Murphy said: “This new policy represents a significant step-change for both government and tendering organisations. It sees social value placed at the very heart of public procurement, setting new standards that rewards companies for doing the right thing while ensuring the Executive uses its spending power for the common good.”
The policy will not come into force until June 2022, to give time to train procurement officials and small organisations bidding for contracts, and for government departments to factor in additional costs in their planning.
This policy sees social value placed at the very heart of public procurement - finance minister Conor Murphy
A long journey
Yesterday’s announcement comes after many years of lobbying by social enterprises and support bodies – with efforts delayed by three years without a government, when the Northern Ireland power-sharing agreement collapsed in January 2017.
Social Enterprise NI chair John McMullan tweeted today: “It's been a long journey, exasperated by the long absence of our @niassembly but many thanks to @dptfinance Minister @conormurphysf for championing this issue and taking this important step to put #SocialValue at the centre of public service commissioning.”
There are around 840 social enterprises in Northern Ireland, according to Social Enterprise NI.
In his statement Murphy described how seeing one of them in action had driven home the potential of a social value policy.
“When I visited USEL a few months ago, I witnessed first-hand how it is delivering an excellent service to government while adding social value by employing people with disabilities,” he said.
Director of Social Enterprise NI Colin Jess told Pioneers Post that the new policy was “huge progress”, but that it could have gone further.
In earlier consultations, his organisation had called for a minimum weighting of 20% and a threshold of £30,000 (instead of £123,000); it also wanted to see the rules apply to local councils as well as central government.
Northern Ireland is still “playing catch-up” with the rest of the UK, said Jess. The Social Value Act for England and Wales came into force in 2013, with similar changes introduced in Scotland through the Procurement Reform Act in 2014.
There is no such legislation yet in Northern Ireland, meaning ministers could choose to make contracts exempt from the policy, Jess said.
However, Murphy said the Executive was now “in a position to look at the legislation needed to underpin this policy”.
Header image: Stormont buildings in Nothern Ireland by rovingi
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