“Smarter” public sector procurement could generate an additional £56bn a year, according to a new report.
Research commissioned by Social Enterprise UK found that if social value had been incorporated in public sector procurement decisions made between 2010 and 2020, an extra £762bn worth of opportunities to create economic, social and environmental value could have been unlocked.
Annualised, this is equivalent to £56bn or more than double the government’s pledge to invest in net-zero.
The report, Social Value 2032: Creating a Social Value Economy, argued that the extra funding could be used to level up the country, help transition to net-zero and strengthen communities.
Social Value 2032 is a programme overseen by Social Enterprise UK, backed by a coalition of organisations at the forefront of the social value agenda including the Shaw Trust, PwC, Siemens, and Suez Recycling and Recovery UK. It aims to develop a new collective vision for social value.
This year marked the 10th anniversary of the passage of the Social Value Act (SVA), a transformative piece of legislation that mandated public bodies to consider how they can improve social, economic, and environmental wellbeing through their public spending.
The report’s author, Professor Chris White, a former MP who championed SVA, said that while people now have a greater understanding of social value, “we’ve not yet achieved its full potential - which means that we have missed significant opportunities”.
He wrote in the report: “We have made some progress in raising awareness and embedding practice, but not fast enough.
“We now have an opportunity to learn the lessons of the past and accelerate the growth of social value over the next decade to cover all public sector procurement and across our largest businesses. This would see social value cover over £400bn of procurement spend in the UK every year, equivalent to 20% of UK GDP, providing us with a base to transform our economy, our public services and to protect and enhance the environment. But to do this means doubling the pace of social value utilisation in the public sector, and more rapid growth in the private sector.”
A bolder ambition for social value
White said that there needs to be a “bold vision for social value focused on systems-change, transforming public services and creating an environmentally sustainable future”.
He said: “We need to see social value for what it is, a tool to shape markets and organisational behaviour, rather than getting bogged down in individual contract decisions.
“Unless social value is working towards a bigger vision, we won’t maximise the benefits that it can bring. If we embrace this vision, we can build a social value economy.”