In this guest post, Procurement UK’s chair Nick Petford responds to recent reports in the UK into the value of social goals in public sector procurement.
Recently, public sector procurement practices have been the focus of much attention from both the UK media and the country’s politicians. The reason for this is the release of two reports from the British Government which have highlighted the role of companies in society and a growing realisation that social value is an integral part of the criteria in decision making.
Under the Public Services (Social Value) Act, for the first time, all public bodies in England and Wales are required to consider how the services they commission and procure might improve the economic, social and environmental well-being of the area. A report published by the Communities and Local Government Select Committee acknowledged that Ministers’ wanted sufficient time for the Act to bed in and become fully effective; however, the committee recommended a comprehensive post-legislative analysis of the Act to ensure assessment of its effectiveness before the end of 2015.
I share this concern and encourage every effort that is made to consider social value in each and every contract that is procured by local authorities and other public sector organisations.
With the private sector playing an increasingly important role in the running of public services, and half of all public spending on goods and services going to private providers of contracted-out services, it was no surprise for me to learn that the Public Accounts Committee were looking in to outsourcing and procurement of government services.
The Committee has recommended that government departments split up contracts and be required to set out specific actions to encourage small businesses. This would increase competition and ensure that there are enough alternative providers in the market for government business.
I am not pretending that considering social value in the procurement process is an easy task and I am not suggesting that all businesses must buy from social enterprises or charities all of the time. What I do advocate is a level playing field so that small and medium enterprises (SMEs), social enterprises and charities can compete to offer the same services and demonstrate clear community and social awareness which will incentivise existing suppliers and ’big business’ to do the same.
In doing so, everyone’s a winner. Local authorities, central government and other public organisations benefit from increased transparency and a more competitive market that result from fair procurement practices. The communities in which these services operate know that they are getting the best possible deal and we, as users of these services, know that we are getting value for money and best social impact socially.
The House of Commons Public Accounts Committee report, Contracting out public services to the private sector, can be read here.
The House of Commons Communities and Local Government Committee report, Local government procurement, can be read here.
Nick Petford is vice chancellor of The University of Northampton and chair of Procurement UK.