The UK government has launched a new social value procurement model to assess and score suppliers on wider social impacts.
The new measures, coming into effect on 1 January 2021, are expected to increase opportunities for SMEs and social enterprises to win public contracts, creating “a more resilient and diverse supplier base”.
The model will determine a score for bidders based on the “wider positive benefits” they bring, including supporting the recovery from Covid-19 impacts, tackling economic inequality through job creation, increased supply chain resilience, fighting climate change, waste reduction, and driving equal opportunities.
It will include tests “that all bidders, irrespective of their size and type, will be capable of meeting, therefore, further levelling the playing field for the UK’s small businesses, start-ups and voluntary and community sector organisations and social enterprises”, according to the Cabinet Office.
All government commercial teams will need to complete training courses on the new model and how to ensure contracts deliver maximum social value.
The measures aim to ensure public procurement goes further than the Public Services (Social Value) Act 2012, so that “all major procurements explicitly evaluate social value, where appropriate, rather than just consider it”.
Julia Lopez, Cabinet Office minister, said: “Government has tremendous buying power, spending £49bn each year on contracts for vital public services. Value to the taxpayer should lie at the heart of our procurement decisions.
“Too often, however, ‘value’ has been narrowly defined by price without taking into account other important factors such as the number of local jobs or apprenticeships a contractor will provide, the care they show the environment in their business practices or the number of SMEs involved in their wider supply chain.
“We want to see a greater variety of companies deliver government contracts, from every corner of our country – not just because that benefits local economies and communities but because it helps diversify our risk, create a more resilient supplier base and deliver some of our critical priorities.
“If we can use government’s buying power to drive that broader value, the better our chances of levelling up our country and investing in our people as part of our Covid recovery.”
Arnab Dutt, chair of the Social Value Policy Unit at the Federation of Small Businesses, said: “I welcome the announcement on social value procurement as an important step forward for public sector supply chains. Its focus on addressing economic inequality, the climate emergency and societal wellbeing is a 21st century agenda.
“Social value has the potential to be transformational in bringing opportunity to all parts of our country and to the many small businesses that are the lifeblood of our communities.”
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