There’s no doubt about it, 2020 has been rough. The pandemic has deepened already existing inequalities, exposing the inadequacy of our economic systems and our foremost institutions. As such, it has become clear that a new appraisal of the deep connection between organisations and the wider economic, social, and environment context is urgently needed. In other words, institutions of all kinds must take on a great responsibility for their impact upon society. The concept of social value must naturally form the centre of any effort to ‘build back better’. Thankfully, a positive first step is already being made in that direction: from 1st January 2021, the social procurement landscape will be improved by a new government model.
This series of new measures represents a positive step forward by the Government, as it mandates the assessment of social impact made by suppliers to public bodies. This is great news for social enterprises, who will be better placed to win government contracts by demonstrating the social value they create.
The changes will apply to all Central Government Departments (e.g. the Cabinet Office, the Department of Health and Social Care, Ministry of Justice), their Executive Agencies (e.g. Companies House, HM Prison Service) and Non Departmental Public Bodies (e.g. the Charity Commission, Crown Prosecution Service).
What are the main changes?
According to the Procurement Policy Note (PPN) on the new model published in September, social value must be “explicitly evaluated” in all central government procurement [...] “rather than just ‘considered’ as currently required under the Public Services (Social Value) Act 2012.”
Although this change of wording might sound minor, it actually highlights a big shift in the government’s approach to social value. Whereas the Social Value Act required officials to think about social value within procurement processes, there was nothing to ensure that it was a determining factor. Instead, the new model insists that social value must be ‘explicitly evaluated’, in all central governments contracts. Moreover, the framework is imposing a minimum weighting of 10% for social value in decisions on contract bids. This means that social value will soon be a standardised, compulsory aspect of government procurement, and that it could make a decisive difference where there’s close competition. In this respect at least, social enterprises will now have an inherent advantage, with government supply chains offering an exciting area of growth in the years ahead.
PPN also breaks down the intended outcomes of the changes to government procurement, giving us an insight into how social value is understood, and what policymakers are looking to achieve:
Help local communities manage and recover from the impact of COVID-19.
Tackling economic inequality
Create new businesses, jobs, and skills and to increase supply chain resilience and capacity.
Fighting climate change
Effective stewardship of the environment
Reducing the disability employment gap and tackling workforce inequality
Improve health and wellbeing and community integration.
Here too, social enterprises seem well placed to compete on these terms, given that many of the hoped for outcomes are already built into their social missions. Throughout the pandemic, we’ve followed how social enterprises have been at the forefront of efforts to support local communities and protect those who need it most. And beyond their efforts during the COVID crisis, social enterprises across the UK have put economic injustice, equality of opportunity, ecology, and health at the centre of their work. Contributing to the major issues facing our society is in their DNA; it's what social enterprises are all about. This being the case, the new social value framework could open an opportunity for social enterprises to take centre stage in the UK’s efforts to rebuild in 2021. We look forward to being a part of that effort, and to seeing social enterprises across the country winning government contracts, and entering major public supply chains.
If you are a buyer or supplier who will be affected by the new rules, get in touch with Supply Change at firstname.lastname@example.org to find out how we can help you ensure you have social value as part of your offering.