Government boosts social value procurement

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The government has introduced new measures to ensure public procurement delivers on social value priorities

Government departments will use the social value model to assess and score suppliers on the wider positive benefits they bring by delivering the contract.

The social value model includes:

  • Supporting Covid-19 recovery, including helping local communities manage and recover from the impact of Covid
  • Tackling economic inequality – creating new businesses, jobs and skills, as well as increasing supply chain resilience
  • Fighting climate change and reducing waste
  • Driving equal opportunity, including reducing the disability employment gap and tackling workforce inequality, improving health and wellbeing and community integration.

The new approach will apply tests that all bidders of all shapes and sizes will be capable of meeting.

It therefore further levels the playing field for the UK’s small businesses, start-ups and voluntary and community sector organisations and social enterprises.

Value at the heart of our procurement decisions

Cabinet Office minister, Julia Lopez said: “Government has tremendous buying power, spending £49bn each year on contracts for vital public services. Value to the taxpayer should lie at the heart of our procurement decisions.

“Too often, however, ‘value’ has been narrowly defined by price without taking into account other important factors such as the number of local jobs or apprenticeships a contractor will provide, the care they show the environment in their business practices or the number of SMEs involved in their wider supply chain.

“We want to see a greater variety of companies deliver government contracts, from every corner of our country – not just because that benefits local economies and communities but because it helps diversify our risk, create a more resilient supplier base and deliver some of our critical priorities.

“If we can use government’s buying power to drive that broader value, the better our chances of levelling up our country and investing in our people as part of our Covid recovery.”

The minister for civil society, Baroness Barran, commented: “This hugely positive change will ensure taxpayers’ money supports levelling up across the country, encouraging businesses to give back to their communities and offering more opportunities for our dedicated charities, social enterprises and voluntary groups.

“This way we can ensure government contracts are helping to tackle economic inequality and support our recovery.”

‘An important step’ for public sector supply chains

Arnab Dutt, chair of the Social Value Policy Unit at the Federation of Small Businesses, added: “I welcome the announcement on social value procurement as an important step forward for public sector supply chains.

“Its focus on addressing economic inequality, the climate emergency and societal wellbeing is a 21st century agenda.

“Social value has the potential to be transformational in bringing opportunity to all parts of our country and to the many small businesses that are the lifeblood of our communities.

“The Federation of Small Businesses continues to help shape policy for a dynamic ecosystem for our UK SMEs in collaboration with the public sector, acknowledging that the government’s SME growth agenda and social value policy go hand in hand.”

The new social value measures will come into effect on 1 January 2021.

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