Social enterprise wins on public contracts hit lowest in two years

16 January 2019

Analysis has revealed that despite the government announcing measures to diversify the public services market, social enterprises have won the lowest number of public contracts since 2016.

Research conducted by Tussell on behalf of Social Enterprise UK (SEUK) revealed that community interest companies (CICs) won just 0.3% of all public contracts in the second quarter of 2018. Of the contracts deemed suitable for voluntary, community and social enterprise organisations (VCSEs), only 11% were awarded to VCSEs.

The period marks the lowest number of public contracts won by CICs in two years, with only 41 contracts awarded to social enterprises in Q2, down by 28% from the previous quarter.

The research comes shortly after minister for the Cabinet Office David Lidington announced that government would “level the playing field” to give smaller enterprises equal access to government contracts.

Despite announcing plans to diversify the market for public services, central government only awarded 10% of contracts to CICs, while local government performed better, awarding 60% contracts to CICs during the second quarter of 2018.

According to SEUK, the report is indicative of the issues still faced by social enterprises eager to deliver public services, from the lack of social enterprise knowledge in procurement teams to risk aversion.

Charlie Wigglesworth, deputy chief executive at SEUK, said the government must do more to signal to procurement teams that social enterprises should be taken seriously when bidding for contracts, which in turn should encourage major suppliers to work with social enterprises.

“Measures to improve the use of social value in central government are helpful, but this alone will not address the cultural barriers facing social enterprises in the marketplace,” he said.

He continued: “At a time when the public is concerned about the involvement of businesses in public service markets following the collapse of Carillion, the government has an opportunity to ease these concerns through working with social enterprises.”

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