More Whitehall contracts to include social value

The government has announced plans to change the way it awards public sector contracts to help more social enterprises and small firms bid for them.

At a summit yesterday in London, ministers said more government contracts will be awarded on the basis of social impact, as part of plans to ensure that a third of Whitehall contracts will go to small and medium-sized businesses by 2022.

Issues such as the employment of disabled people, the use of small businesses, climate change and the prevention of modern slavery will all become key factors in one of the ‘biggest changes in public procurement in recent years’.

‘Every year, the government spends £49bn with external organisations and it is morally right that we make sure none of that money goes to any organisations who profit from the evil practices of modern slavery,’ said chancellor of the Duchy of Lancaster, David Lidington.

‘Similarly, it is right that we demand that the organisations we work with meet the high standards we need to protect our environment and employ workforces which represent our diverse society, including people with disabilities and those from ethnic minorities.’

The Social Value Act come into force in January 2013 and requires all public sector commissioners, including local authorities, to consider the social, economic and environmental impact of their spending.

Speaking to New Start in 2017, the author of the legislation and former Conservative MP Chris White, admitted there was ‘huge potential to take it further’.

At the time, Mr White said the legislation impacts or helps ‘shape’ around £25bn a year of public sector spending, which is only around 10% of the total figure (£268bn).

The Chair of Social Enterprise UK, Lord Victor Adebowale, said it was good to see the government showing leadership and ‘taking steps to embed social value across its contracts’.

‘This announcement will support the more than 100,000 social enterprises working in the UK which employ over 2m people,’ said Lord Adebowale.

‘The social enterprise sector has been a great British business success story and it is right that the government does more to support it.’

Areas which will be now looked at when contracts are being drawn-up by the government will include:

• The use of firms of all sizes, including those owned by under-represented groups
• The safety of supply chains – to reduce the risk of modern slavery and cyber security issues
• Encouraging firms to employ people from diverse backgrounds, including those with disabilities and from ethnic minorities
• Focusing on environmental sustainability to reduce the impacts of climate change
• Encouraging firms to prioritise staff training to boost their employees’ long-term employability