New EU procurement rules will 'rebalance the markets towards social enterprises'

Will Green is news editor of Supply Management
29 October 2013

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Pressure group Social Enterprise UK (SEUK) has welcomed proposed new EU procurement rules that can “rebalance the markets currently weighted in favour of private companies”.


SEUK said EU rules promoting social and environmental factors and reserving certain contracts for social enterprises for a limited time period were “good news for society”.


In a report Out of the Shadows? the campaign group claimed public sector outsourcing is now worth more than £100 billion, “the bulk of which is going to large private sector companies and their shareholders” who are “providing lower quality services”, but they “continue to profit from public services and operate without transparency and accountability”.

Peter Holbrook, chief executive of SEUK, said: “These new EU rules are good news for society – they recognise that public service markets don’t always put people first. The laws could make a positive contribution at a critical time. Currently, the UK’s public sector markets and contracts are too heavily weighted in favour of private companies who are on a money mission, and the consequences are being felt by ordinary people – the taxpayer, workers and service users – who are being short-changed.

“The EU rules can rebalance the markets,” Holbrook continued. “Social enterprise providers deserve a bigger seat at the public sector commissioning table, because they are businesses with a social mission, not a money mission.”

The report also calls for: the strengthening of the Public Services (Social Value) Act so public bodies are obliged to account for how social value is generated in procurement decisions; the extension of the Freedom of Information Act to be extended to cover private firms providing public services; the creation of an “independent contracting oversight body”; and open-book accounting to be introduced for public sector contracts worth more than £250,000.

A Cabinet Office spokesman said: “We have established a wide range of initiatives to help social enterprises deliver public services, including our commissioning academy and commercial masterclasses for voluntary, community and social enterprise organisations. But we know there is still more to do, and the government will continue to work hard to open up the way we do business to ensure SMEs, charities and voluntary organisations are in the best possible position to compete for contracts.”

The new EU directives are expected to be adopted this autumn, and come into force in the UK next year.

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