Northern Ireland has announced a new government procurement policy that emphasises social value “to create a fair and cohesive society”.
Finance minister Conor Murphy said from June 2022 government tenders must dedicate a minimum of 10% of total award criteria to social value. This will rise to 20% from June 2023, subject to approval by the NI Executive.
The policy will apply to service contracts worth over £123,000, and to construction contracts valued above £4.7m, which account for approximately 97% of total government procurement spend.
The NI government spends around £3bn per year procuring goods, services, and construction from the private and third sectors, which makes up a quarter of the Executive's budget.
“This new policy represents a significant step-change for both government and tendering organisations,” Murphy said.
The policy will also require contractors to pay employees the living wage as a condition of contract from June 2022.
The living wage currently stands at £9.50 per hour, and is higher than the national living wage, which is £8.91 per hour for over-23s.
Murphy said the new approach would create jobs for people in deprived areas and also deliver environmental benefits by requiring contractors to employ low or zero-carbon practices.
He continued: “It is imperative that we harness this spending power to deliver economic, environmental and wider societal benefits.
“It sees social value placed at the very heart of public procurement, setting new standards that rewards companies for doing the right thing while ensuring the Executive uses its spending power for the common good.”
The policy was developed in partnership with the NI Procurement Board, which is made up of civil servants and members from the private and social enterprise sectors. It advises the government on public procurement policy.
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