Social value 'must be compulsory component in every public contract'

Will Green is news editor of Supply Management
27 January 2023

The UK government should include a “social value calculation” in the Procurement Bill as a compulsory component for contracts.

During a Westminster Hall debate in Parliament, Mick Whitley (Lab), told MPs a “measure of social value” should be embedded “in every contract”.

“That spending should bring direct benefits to the people of this country, not primarily to the corporations that win most contracts, and still less to those in tax havens who utilise loopholes in the law to siphon taxpayers’ money into offshore accounts,” he said. 

“However, the bill does not match the scale or scope of reform to public procurement procedures required to ensure that it addresses the needs of the British people following the UK’s exit from the EU.”

Whitley, who called the debate, said “value for money has come to mean the cheapest bid, not the best bid”.

He said the Cabinet Office had previously published a social value model that means government departments must “evaluate” social value rather than just “consider” it, “yet when it came to publishing the Procurement Bill, there were no explicit references to social value”.

“At the very heart of the problem lies the fact that a social value calculation is not included in the public procurement process,” he said. 

“My call on the government is simple: make it a compulsory component – make its inclusion in the consideration of all bids compulsory.

“Only by including a social value calculation can we ensure that every contract is transparent, and that its impact on local communities, job creation, the standard of jobs and the local economy is taken into account and plays a key part in shaping the final decision.”

Alex Burghart, parliamentary secretary in the Cabinet Office, said the bill shifted procurement considerations from “most economically advantageous tender” to “most advantageous tender”.

“That gives public authorities a freer hand to make an assessment about whether procurement decisions will create jobs in their area, benefit the environment or create any other forms of social good that are not purely economically measured.”

Last year a charity warned if the bill was not strengthened, social value would remain a “tick-box exercise”.

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