The Cabinet Office has today announced a review of the Social Value Act, to look into the potential for it to be extended more widely.
The Public Services (Social Value) Act 2012, which “aims to transform the way taxpayers’ money is spent on public services”, requires public commissioners to think about whether they can secure added economic, social or environmental benefits for their local area when they are buying services. It currently only applies to service contracts over the EU threshold of £113,057 for central government and £173,934 for other public bodies.
The review intends to determine if this should be widened, for example to cover contracts for goods and works as well as services, and how this can be done in a way that continues to support small and medium enterprises (SMEs) and voluntary, community and social enterprises (VCSEs).
The review of the Act, which was first introduced in 2013, will be led by Lord Young (pictured), the Prime Minister’s adviser on enterprise, and supported by the Federation of Small Businesses, Chris White MP, Hazel Blears MP, and Michael O’Toole, the outgoing Crown Representative of the voluntary sector, and soon to be chief executive of Mentor UK.
Lord Young said: “The government has been facing growing calls to extend the Social Value Act and I am delighted that this review will give us the opportunity to fully consider those ideas, thinking about how we can achieve the aims of the Act. I am keen that this does not add any regulatory burden to SMEs, social enterprises, or VCSEs.”
Since the Act came into force, the government has been supporting its implementation, and supporting both suppliers and commissioners “who want to use it to put value at the heart of what they do”.
NCVO called for a review of the Act in its pre-Budget submission.
Karl Wilding, director of public policy at NCVO, said of the review: “We called for a review of the Act earlier this year, so we’re pleased to see it happening now. We know the Act has great potential to deliver better public services – which is why improving the Act is a key ask in NCVO’s manifesto for 2015. We’ll be meeting Lord Young shortly to discuss the review and we’ll be sharing our members’ experiences and suggestions with the review panel.”
The Social Economy Alliance, the campaign group for social enterprises and cooperatives, also welcomed the review.
Peter Holbrook, chief executive of Social Enterprise UK, a lead partner in the Alliance, welcomed the review and its calls to strengthen the Act.
However, he said: “But more can be done to ensure social value is engrained in public service commissioning. Public money must only be spent on the most socially responsible firms. Public service budgets have shrunk dramatically in recent years, so every ounce of the government’s enormous spending power - £227bn – must be channelled into providers that put communities and people first, not private profit.”
The review team will consider evidence from a range of source over the coming months, looking to report on their findings in early 2015.
Brooks Newmark, minister for civil society, said of the review: “The Social Value Act is already making a significant impact. There are some great examples of how commissioners are using it effectively and there are growing numbers of case studies showing good practice. Government needs to get more bang for its buck, and the Act is helping us do that.”
