Public Procurement: Social Value and the Government’s Civil Society Strategy
This House of Lords Library Briefing has been prepared in advance of the forthcoming debate on the motion moved by Baroness McGregor-Smith (Conservative) that “this House takes note of the case for increasing the social value of public procurement by aligning it with Her Majesty’s Government’s Civil Society Strategy”.
Government procurement accounts for a significant proportion of public spending, amounting to around a third of all public expenditure. However, the way in which procurement decisions are made has been criticised for not delivering value for money or encouraging enough innovation in the way services are delivered.
There have been efforts by successive governments since 2010 to change the way in which government procurement operates. One of the main ways in which they have sought to achieve this is through supporting the principle of social value in procurement. Since coming into force in 2013, the Public Services (Social Value) Act 2012 has required central and local government officials to consider social value when making procurement decisions about services.
There have been calls from the Labour Party and the campaign organisation Social Enterprise UK for this to be extended to cover goods and works. In addition, in 2015 a government review argued a lack of clarity over what social value meant was holding back the number of procurements where social value was considered.
In 2018, the Government announced it would extend the existing requirements to consider social value in public procurement. This would apply to central government departments and would include procurement of goods and works. The announcement formed part of the Government’s civil society strategy, a larger policy to further engage charities, social enterprises and other bodies in the delivery of services. The Government has also sought to increase awareness of social value amongst civil servants and those bidding for procurement contracts.
There has been broad support for the objectives set out in the Government’s civil society strategy from bodies including the National Council for Voluntary Organisations. However, concerns have been raised about how it is to be implemented. The Leader of the Opposition, Jeremy Corbyn, has argued the Government is not doing enough to use procurement spending to support economic growth and accused the Government of subsidising bad corporate behaviour.