On 1 October, it became mandatory for Government contracting authorities to include social issues like jobs and skills in their procurement processes. That in itself is a good thing, but the social value model they have prepared is flawed.
I welcome the consultation on further reforms to public procurement issued by the Cabinet Office in June. In his related press release, the Chancellor of the Duchy of Lancaster made an explicit connection between the consultation and the Government’s proposals for obtaining social value benefits that are specific to the needs of a community. That aligns well with section 12 of the Procurement Act 2023 and the national procurement policy statement, which connects procurement with the Government’s core missions—for example,
“encouraging suppliers to recruit from groups that struggle to access employment opportunities”
as part of the “Take back our streets” mission;
“removing barriers to entry for young people and under-represented groups”
as part of the “Break down barriers to opportunity” mission;
“encouraging suppliers to recruit from economically inactive cohorts”
as part of the health mission; and
“opportunities for small businesses and social enterprises across the country”
as part of the “Kickstart economic growth” mission.
The Act sets clear objectives that, in effect, call for targeted recruitment and training, and local initiatives for small and medium-sized enterprises. The current position builds on an approach that evolved during the last Labour Government, when a range of local and regional initiatives were developed to target jobs and training opportunities at disadvantaged local communities. The term “community” could refer to people living in a specific geographic area or people who share disadvantages in the labour market, such as the long-term unemployed, young people, ex-offenders or care leavers.
The Joseph Rowntree Foundation’s influential 2002 report, “Achieving community benefits through contracts: law, policy and practice” kick-started this whole approach. Later, the Labour Government published the first UK guidance, “Social issues in purchasing”, in 2006. That was followed by the Scottish Government’s “Community benefits in public procurement” document, which included policy, a methodology and model clauses, and remains widely used today.
Similar toolkits were adopted in other areas. Those included the targeted recruitment and training toolkit produced by the north-east improvement and efficiency partnership, the Can Do toolkit adopted by Welsh housing associations, and the west midlands procurement framework for jobs and skills.
As a proud Glaswegian, I am pleased to say that Scotland was an early adopter of targeted recruitment and training through procurement. A 2014 Glasgow University study that covered 24 contracts identified 1,000 people recruited from priority groups, of whom 38% were recruited as a result of the contract requirements; 200 apprentices recruited, of whom 73% were as a result of the contract conditions and all were still in employment; and 6,700 individuals who had received training, of whom 31% would not have done so without those contract conditions.
Glasgow housing association—the stock transfer recipient for roughly 100,000 social homes in the city council area—incorporated new entrant trainee requirements into its regeneration contracts at the outset. The overall achievements by 2014 were that 657 apprentices received an average of 73 weeks’ employment; 501 other new entrant trainees obtained an average of 22 weeks’ employment; a total of 60,000 person-weeks of employment for new entrant trainees were delivered—11.4% of all person-weeks utilised on the contracts; and 48% of new entrant trainee opportunities went to residents of the most disadvantaged areas of Glasgow.
That counts as a great success by any standard, as I am sure the Minister would agree. The outcomes demonstrate the benefits of getting senior management buy-in and staff resources from the outset. Targeted recruitment and training then become a normal part of commissioning, procurement and contract management. The approach set out in the Scottish Government guidance is underpinned by the Procurement Reform (Scotland) Act 2014, which remains good law in Scotland.
Let us come back to 2025. The Government’s “Procurement Policy Note 002: The Social Value Model” updates the 2013 social value model. Both iterations of the model originate from discussions between the Government and civil society organisations that resulted in the Public Services (Social Value) Act 2012. For services contracts, the model encourages contracting authorities to procure some wider community benefit from the way their services contracts are delivered, often following good practice developed by innovative community-based service providers.