Extra value could be used to help tackle net zero goals © Photo by Monty Rakusen via GettyImages
Extra value could be used to help tackle net zero goals © Photo by Monty Rakusen via GettyImages

Public procurement ‘missed £760bn of opportunity’

The use of public procurement to benefit social value “has not been fully realised” a report has found.

“Smarter” use of public sector procurement could unleash an extra £56bn per year in social value, which could be used to level up the country, tackle net zero goals and strengthen communities, a report by Social Enterprise UK has said. 

The report, Social value 2032: creating a social value economy, found that between 2010-2020 the UK missed over £762bn worth of opportunities to create economic, social and environmental value.

The report said: “While the understanding of social value has increased, we’ve not yet achieved its full potential –  which means that we have missed significant opportunities.” 

It said the UK’s public procurement had only optimised 5% of the potential gains of social value during the last decade, and called on the government to double its commitments to social value by 2032. 

Chris White, director of industrial policy and insight centre at the Manufacturing Technology Centre, UK, who wrote the report, said: “We have made some progress in raising awareness and embedding practice, but not fast enough.

“We now have an opportunity to learn the lessons of the past and accelerate the growth of social value over the next decade to cover all public sector procurement and across our largest businesses. 

“This would see social value cover over £400bn of procurement spend in the UK every year, equivalent to 20% of UK GDP, providing us with a base to transform our economy, our public services and to protect and enhance the environment. But to do this means doubling the pace of social value utilisation in the public sector, and more rapid growth in the private sector.

“Unless social value is working towards a bigger vision, we won’t maximise the benefits that it can bring.”

The report found social enterprises bring progress outside of financial benefits. Nearly half (47%) of social enterprises are being led by women, compared to just 18% of SMEs. A further 14% were led by people from BIPOC communities, compared with just 8% of SMEs.

Having diverse and socially driven supply chains is increasingly influencing which businesses consumers engage with.

Research found nearly three quarters of the British public (72%) said they are looking to buy brands that reflect their personal values, up from 56% in 2019.

A further 77% of people would like to see more businesses with a priority on using their profits and business operations to make a positive impact on the wider community.

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