Report: Expansion of Social Value Act recommended

04 Aug 2017 News

A research organisation has recommended an expansion of the Social Value Act across all public procurement and to lower value contracts.

Power to Change published a report this week based on research it commissioned in late 2016 to examine the extent to which community businesses were benefiting from the provisions of the Public Services (Social Value) Act 2012, which came into effect in January 2013.

The report says that although there have been some barriers to implementation of the Act, which requires public service commissioners to consider social value when tendering, it has overall been successful and should be rolled out further.

It suggests reducing the threshold of the act, which currently applies to central government contracts worth over £111,676 and other public bodies’ contracts over £172,514.

“A lower threshold should be selected by analysing contracts tendered by local authorities and choosing an appropriate level that would bring in commissioners such as district councils.”

The report recommends extending the Act to apply across all public procurement to include goods and works.

It suggests it might actually be easier for commissioners to be instructed to apply a consistent approach to procuring services across their whole organisations.

'Should be compulsory'

The report suggests making the Act compulsory by requiring commissioners to do more than merely consider social value although it suggests this could provide “unhelpful” pressure on local authorities that are trying to procure the cheapest possible contract.

It also suggests providing more support, guidance and monitoring, which it says could boost take-up of the Act.


Writing in a blog on the charity's website, Ailbhe McNabola, Power to Change head of research and policy, said: “The community businesses with whom we spoke were universally positive about the aims and principles of the SVA, but views on the Act itself were much more mixed.

“Some saw it as tokenistic, with little practical impact on how councils commissioned or from whom, but for some the commissioning landscape would be much bleaker without the Act to nudge councils into considering social value.

“The SVA has done little if anything to influence community businesses in tendering for local contracts, however. Those which looked to work with local authorities said they would have done so whether the Act was there or not.”

She said only a minority of community businesses operate at a large enough scale to be able to bid for contracts worth over £172,514.

“Lowering the threshold – along with some of our other recommendations to government – would usefully signal to community businesses that they are a part of national future plans,” she added.

The research involved interviews with 10 relevant stakeholders, 11 community businesses and a review of relevant literature.

A government review of the Act is due to take place this year. Charities minister Tracey Crouch said in response to a Parliament question last month that an announcement would be made “in due course”.


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