At the start of this year, a tiny explosion occurred in the world of public procurement. The question of whether it will rock the foundation or be a damp squib depends on the innovators in both the public and private sector.
The Social Value Act is designed to change the way that public authorities rate tenders. Public bodies must now take into account social, environmental and economic impacts when they award contracts. Given that these contracts are worth over half of UK public sector contract value – £3.75 billion per year – it could be a major driver to re-investment in local communities.
Global Action Plan is already working in this space with a programme called ‘Transform’, a partnership with British Gas and Accenture that will train 1,400 unemployed 17-25 year olds with a BTEC in sustainability skills and will guarantee jobs for 1,000 of these. Transform partners are doing this because it is the right thing – but we also believe that leading businesses need to re-invest in their communities to thrive and create a solid future.
As a collaborative charity, we don’t like to work alone – so we held a breakfast briefing hosted by Hazel Blears MP to gauge the opinion of other leading businesses working with the public sector.
The message that came back is that this agenda can and will be shaped by innovators, both in the public and private sector. And if you are willing to step up and be one of those who lead, the rewards could be high. We heard from our briefing invitees that there were some clear wins to getting involved early:
- Building a solid evidence base of work in this area to win future contracts.
- Shaping the framework to measure social and environmental impact under the act.
- Getting the reputational benefit of leading this agenda rather than jumping on the bandwagon.
- Reaping the financial rewards of adding social and environmental value, such as making supply chains more secure through local sourcing, or tapping into new sources of recruitment at a time of a skills shortage.
We are facing extensive public sector cuts that have barely begun to bite. Yes, that means tighter finances and an increasing emphasis on price. But the public sector will need to get more bang for its buck. It will have to use the money it spends to get a social and environmental return – something it previously invested in directly.
Half of councils have already said they will change their procurement practices as a result of the act. When that happens, the most innovative companies will benefit from being ready.
☛ Philippa Ward is a partner at Global Action Plan