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30 October 2011 | Adam Leach
Public sector buyers may soon be required to consider the “social value” in contract award decisions, as a result of a bill currently passing through Parliament.
The Public Services (Social Value) Bill, which passed the report stage in the House of Commons this week, demands “public authorities to have regard to economic, social and environmental well-being in connection with public services contracts”.
Current rules state contracts should be awarded on the grounds of “best value”, which is defined as the bid with the lowest price that can meet the requirements. It defines “social value” as “the benefits of the community from the commissioning and procurement over and above the direct purchase of goods and services”.
In a statement this week, Conservative MP Chris White, who brought the private members’ bill, said: “It is important that as we review our public services, we maximise the use of the skills, knowledge and dedication of organisations who have the best interests of our local communities at heart”.
Outlining the intention of the bill, first proposed in June 2010, White used a hypothetical example of a contract to build social housing being awarded to a supplier that while not the cheapest, specified in its tender that it would provide apprenticeships and educate students on construction skills.
The Bill, which has cross-party support, will receive a third reading in the Commons on 25 November, before moving through the House of Lords before receiving Royal Assent.
The small business community has welcomed the principle of the bill. Phil McCabe, a senior policy advisor at the Forum of Private Business told SM that the bill must open up the public procurement process for small local businesses. “If this bill becomes law and achieves this it will be very valuable for smaller employers, the regions they are based in and the economy as a whole,” he said.
Earlier this week, Alex Neil, the Scottish government’s cabinet secretary for infrastructure and capital investment explained the government had written to theEuropean Union to request social criteria can be taken into account when awarding public contracts.