0370 270 6000

already registered?

Please sign in with your existing account details.

need to register?

Register to access exclusive content, sign up to receive our updates and personalise your experience on brownejacobson.com.

Privacy statement - Terms and conditions

Forgotten your password?

Social value in procurement

18 February 2020

This article is taken from February's public matters newsletter. Click here to view more articles from this issue.


The Public Services (Social Value) Act 2012 extends public bodies’ thinking beyond the financial costs of a contract and makes them evaluate how the services they procure might improve the economic, social and environment wellbeing of an area. People’s lives are affected daily by the goods and services that public bodies procure and the underlying aim of the Act is to maximise the positive outcomes of the procured services rather than focus solely on minimising the cost.

The Act applies to contracts which are valued over the EU Procurement thresholds as set in the Public Contracts Regulations 2015 and therefore, does not apply to:

  • Mixed service contracts where services are of less value to the main purpose of the contract;
  • Contracts awarded by a call off framework; and,
  • Contract below the EU thresholds.

However, for those relevant contracts, the Act asks the contracting authorities to consider the wider benefits which could be built into the service specifications or as part of the wider contractual agreement. This is done by considering a proportionate and relevant social value in relation to the services that are commissioned, and the local authority must take reasonable steps to adapt additional benefits throughout the delivery of a service.

As public funds are decreasing this often means there is pressure on local authorities to obtain services from the cheapest supplier which can mean a reduction in the quality of services. However, when incorporating the requirements of the Social Value Act, these benefits create a positive medium to longer term outcome in a cost and resource-efficient way. For example, by employing unemployed residents for a service this allows people to be taken off benefits and into paid employment. The challenges of adapting social value into contractual arrangements is often that social value is difficult to quantify and so, despite the long-term benefits to local communities, the ‘value’ of social value is still unknown.

The Act’s criteria also allows alternative providers like voluntary organisations, community groups and social enterprises to bid for services which would otherwise be dominated by larger organisations and by increasing the competition in bids, local authorities benefit from better value for money and innovative ideas. Currently, suppliers often incorporate social value in the tendering process without appreciating it. With more awareness of the wider benefits of social value in both councils and suppliers, the potential of social value could be further increased and advertised.

Social value benefits should be seen as a necessary requirement in all procurements to maximise the potential of a small budget and reap the benefits of smaller organisations in the local communities. The Social Value Act allows the councils to improve the economic, social and environment welfare in the area and so, the benefits can be designed specifically to help the area in need.

If you would like to discuss any of the issues raised in this article please contact Peter Ware.

Receive our latest government sector news

Choose the way you want to keep up to date with our latest updates and insights. Sign up to our monthly newsletter or join the conversation with our team on LinkedIn.

Sign up to receive updates >

Follow our LinkedIn showcase page >

<>

Training and events

27Jan

In house lawyers: our sustainable future In-person

This might be the greatest challenge facing C-Suite and legal teams over the next few years. What does that mean for you?

View event

Focus on...

Legal updates

Public Matters - September 2021

Updates include the UK Hydrogen Strategy and IPA assistance with PFI contract expiry.

View

Legal updates

The UK Hydrogen Strategy: an overview

Outline of the Government’s ambitious Hydrogen Strategy and how we can support low carbon energy projects and related queries.

View

Legal updates

Is this a support plan you can work with on PFI contract expiry? Handover assistance from the IPA

Key areas of support offered by the IPA under the ‘Managing the Risks of PFI Contract Expiry’ plan to aid public bodies.

View

COP 26 - what is it and why is it important?

COP 26 is the global United Nations climate change Summit, which will take place in Scotland in November. It comes at a time when climate change, and how to reduce greenhouse gas emissions, is at the top of the political agenda.

View

The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

Mailing list sign up

Select which mailings you would like to receive from us.

Sign up