The Public Services (Social Value) Act 2012 came into force on 31 January 2013. This legislation makes it a legal obligation for local authorities, the NHS and other public bodies to consider the social good offered by bidders during the procurement process, alongside price and quality.
For the first time all public bodies will have to consider how the services they procure might improve the economic, social and environmental well-being of their area.
In this sense “social value” refers to making the most of scarce resources and how they are allocated and used. Social value involves looking beyond the price of each individual contract and looking at what the collective benefit to a community is when a public body chooses to award a contract.
For example, where a disability service is delivered by an organisation which employs people with a physical disability to help deliver the service, the social value of commissioning these services might result from providing disabled people with a job where they may otherwise have been unemployed, their becoming more socially included, and/or being involved in improving how disability services are run for the benefit of disabled service users.
It is intended that the positive obligation to consider social value will prompt commissioners to be more purpose-driven and creative in achieving the best value service provision. This will be particularly useful for charities and social enterprises bidding for public contracts where social benefit plays a greater role than the pursuit of profit.
If you have any questions about public procurement, please contact Alan Grisedale in our Commercial Team on 0191 211 7956.