It’s an exciting moment for public procurement in the UK. A chance to really tackle dodgy deals, unworkable contracts and eradicate the exploitation found in supply chains.
The UK Government is considering a Procurement Bill that proposes moving away from Most Economically Advantageous Tender to Most Advantageous Tender.
It is a significant switch. No longer would bids for public money be judged by solely financial means, but the door would be open to a much more robust scrutiny of needs for those impacted – the residents of the United Kingdom.
The bill is not perfect, for example, utility companies are exempt from the standards set out in the new legislation. But, far more importantly, the government is employing the term “public benefit” rather than “social value” as the threshold for most advantageous tender.
At Social Value UK, using feedback from our members and volunteers on the Contract For Change programme, we have penned a response to the government stressing the need to use “social value” as the key indicator of a strong bid.
We are encouraged by the government’s focus on opening public contracts to more SMEs (small and medium enterprises) and would like to see VCSEs (Voluntary, Community, and Social Enterprise) also benefit. For this to work fully, we have made further recommendations.
SVUK CEO Isabelle Parasram OBE said: “By using social value as the barometer for advantageous tender, the government has the opportunity to see some serious returns on investment that benefit the UK public and our planet’s long-term health.
“I strongly urge the government to take heed of our recommendations and to firmly embed social value in the Procurement Bill, rather than rely on a subsequent national policy framework, which will restrict investment through continued uncertainty. Offer organisations certainty and I believe we’ll see a welcome boost to our economy, through more sustainable, informed decisions that incorporate social value practice.”
Please read our response below.
For queries please contact: communications@socialvalueuk.org
Social Value must be the watch word of Procurement. May 22 2023
Social Value UK urge the Government to replace “public benefit” and “value for money” within the Procurement Bill, with the more robust term “social value” to ensure the best outcomes for British taxpayers and wider society.
The amendment would reinforce the government’s warmly welcomed decision to move from considering the most economically advantageous tender to most advantageous tender.
It would give commissioners the leverage required to filter bids through more qualitative means; reducing unrealistically low bids and providing more opportunities for SMEs and VCSEs (charities, public service mutuals and social enterprises) to compete with larger organisations.
Social value, simply put, is the change experienced by people when organisations take decisions. It is the non-monetary value, such as staff wellbeing, access to services or myriad other things not directly included in traditional accounting. More than that, it is the balance of positive and negative experiences.
Alignment would build upon the Government’s introduction of the Social Value Act in 2012 and would ensure wellbeing, equality and environment become fundamental considerations in the £300 billion spend on public services, works and goods.
Our Recommendations: Align the definition of MAT (Most Advantageous Tender) with “social value” rather than “public benefit” when awarding contracts, Extend procurement accessibility to VCSEs and further embed steps to support SMEs, Extend learning and development support to organisations of all sizes and sectors, alongside the included provision for commissioners.
SVUK appreciates the Government has indicated the Social Value Act and the National Framework Policy, which will accompany the Bill, will somewhat align procurement with social value and Net Zero ambitions. However, we feel by relying on the short-term nature of policy, the government could fall short of its intended target to get best value for taxpayers. Policy is easily changed and uncertainty risks inaction, jeopardises progress and reduces investment potential in the UK.
Businesses and delivery organisations of all sizes want greater clarity and consistency, so they can better plan, maximise their return on investment and ensure efficient delivery. Without clear regulation and consistency, supply chain issues such as exploitation, modern slavery and planetary destruction will not be addressed.
Further, SVUK is of the opinion that by adopting “social value” as a key tenet of procurement, it will assist the government in its Levelling Up ambitions.
SVUK and our members commend the Procurement Reform programmes’ learning and development plans and urge this support be extended to all suppliers, especially SMEs and VCSEs, in order that the new approach to procurement is interpreted consistently.
The climate crisis reinforces the need to embed social value within procurement and as the Skidmore Independent Review of Net Zero emphasised, there is a need to act fast or face a more uncertain and expensive future.
NB: This response has been formulated based on feedback from the Social Value UK Thought Leadership Group “Contract for Change” made up of SVUK members. For more information, please visit www.contractforchange.org
The Procurement Bill is currently between the report and committee stage in the House of Commons. It successfully passed the Third Reading in the House of Lords and the Second Reading in the House of Commons. The next reading will confirm it is to be passed into law. There is no date set for this debate as of yet.
To read more: https://bills.parliament.uk/bills/3159/publications
The SROI Network, soon to be Social Value UK, has just released a report calling for a change in legislation to demand more assurance of social and environmental impact information.
The report, entitled How Do Companies Act, outlines an argument for extending statutory audit requirements of Annual Reports. It includes a discussion of gaps and limitations in current legislation in Companies Act that prevent investors from truly understanding social and environmental impact information that may inform their investment decisions.
Whilst this area does not always make headlines, the profession of accounting and auditing acts as the gatekeeper for large capital flows, and is fundamental to the way we choose to allocate resources. If long-lasting systemic change is to be effected, it is necessary to address this crucial link in the capital chain. This report is a step in this direction.
Jeremy Nicholls, CEO of the SROI Network, says ‘we have argued that whilst there is an increase in demand for information on the social and environmental impacts of a company’s activities, the current auditing requirement means that it is difficult for investors to know that this information is complete and accurate.’
‘We believe that strengthening this legislation will give investors a more accurate idea of where they are investing their money and, if in the investors’ interests, mean that investment will shift to businesses which on balance have less of a negative social and environmental impact.’
The report How Do Companies Act is available for download from the SROI Network’s website here. The report is a key part of the SROI Network’s wider campaign to change the way the world accounts for value, to increase the accountability of businesses to their stakeholders and the environment.
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Press contact
Helen Campbell, Communications and Membership Coordinator, The SROI Network
Social Return on Investment (SROI) is a framework for measuring and accounting for the value created or destroyed by our activities – where the concept of value is much broader than that which can be captured by market prices. SROI seeks to reduce inequality and environmental degradation and improve wellbeing by taking account of this broader value.
The SROI Network, soon to be Social Value UK, is an international membership organisation with members in over 40 countries. It exists to support the vision of SROI through the formation of a collaborative network of individuals and organisations dedicated to the practice and support of SROI.
The membership comprises business advisors, academics, funders and individuals representing organisations across all sectors. All members want to influence change through their work; practicing SROI, creating national networks, developing the methodology and gathering examples of SROI and how it is being used.
