by Ian Shires on 25 January, 2012
This coming Friday I will introduce the Second Reading of a Bill which has the capacity to permanently change the way in which public sector bodies procure services – whether local authorities, NHS trusts or Government Departments. It will require them to consider how what is being procured will improve the economic, social and environmental well-being of the area in which the services are being provided. This means that, whilst they will obviously still have to take price very much into account, they will have to assess the social value which different potential suppliers can add to their performance of the contract.
The Bill – with the distinctly ungainly title of the Public Services (Social Value) Bill – started life as a private members’ bill in the Commons. Chris White the new Conservative MP for Warwick was successful in the ballot for private members’ bills and introduced the bill within months of being elected. With some amendments it gained Government support, with Nick Hurd, the Cabinet Office Minister strongly helpful. If it achieves its Second Reading on Friday and we can avoid a Committee Stage in the Lords (both highly likely outcomes) it will become law before Easter.
Why does it matter? At present many public sector procurers choose large companies as a matter of course rather than even considering smaller, local mutuals, social enterprises and small businesses, even though these can offer additional value by supporting local employment, offering training (often to particularly disadvantaged groups) and simply providing a better quality service than mega-companies with a profit-maximising approach. At a time when civil society organisations are feeling the effects of the cuts particularly harshly, the Bill will help tilt the playing field back in their direction. Several local authorities do follow a social value led approach to commissioning – including Durham, Camden and Wakefield, but this is the exception rather than the rule.
That is why, on the eve of its Third Reading in the Commons, Social Enterprise UK co-ordinated a letter from the CEOs of 15 umbrella organisations which said that “the Bill will play a key role in enabling social enterprises, voluntary organisations and small businesses to bid for public sector contracts.” Signatories included the CEOs of ACEVO, Co-operatives UK, NCVO and the Race Equality Foundation.
Although the Bill has Labour support, it is only happening because of coalition action. And although I don’t expect it to feature very heavily in anyone’s Focus leaflet, I hope very much that Liberal Democrats will point out at every opportunity that it is through measures such as this that this Government is fulfilling its commitment to support mutual and social enterprises. In so doing, we not only get better value for our public services but also help develop the kind of inclusive, empowering society for which we strive.
* Dick Newby is the Liberal Democrat Treasury spokesperson in the House of Lords.