Charities are set to benefit as the Public Services (Social Value) Bill has been passed through the House of Lords and will now become law.

The Bill stipulates that public bodies will have to consider social and environmental benefits as well as financial aspects when awarding contracts. The National Association for Voluntary and Community Action (Navca) expects the change in law will enable charities and voluntary organisations to win more of these contracts.

Navca chief executive, Joe Irvin said:

“It means that from now on they will have to consider the full benefits to the community that providers offer. It will open the door for many local charities to contribute more to their communities.”

Irvin also called for “a proper definition of what social value means” with a view to ensuring the new law is implemented properly and that public bodies are aware of the guidelines they are now working by when awarding contracts.

Navca expects the Bill to become law by the summer. It will apply to all government departments, local authorities, NHS bodies and housing associations in England and Wales.

The Bill was sponsored by Conservative MP Chris White (pictured) and is one of only 60 proposed Private Members Bills from 1,096 to be passed as law in ten years up until 2008.

Peter Holbrook, chief executive of Social Enterprise UK also welcomed the new law despite an earlier change to the bill which removed the term ‘social enterprise’. He said:

“As a result of this law, public bodies will be the first to showcase what responsible capitalism really looks like. They will have the freedom and authority to commission based on what else a provider can offer society, as well as competing on price and quality.”