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Dai Powell's blog

Dai Powell is HCT Group's Chief executive. His blog explores ideas on social enterprise, transport and related issues. Always forthright, Dai’s views are his own and do not necessarily reflect the position of HCT Group.


The Social Value Act - fixing a damp squib

Posted: 30 Oct 2017

At HCT Group, we’ve been campaigning for social value to be recognised in public sector tenders for as long as we’ve been competing for public sector tenders. For us, the reasons are obvious. If a commissioner can get additional impact, tackling social issues in their community just by buying social, then they should.

It will come as no surprise that we were amongst the first to join SEUK’s successful campaign that led to the Social Value Act in 2012. When the Act was passed into law, we were hopeful that it would start to make a real difference in public sector contracts. In pretty much all cases – at least for HCT Group in our transport markets – it has made no significant difference whatsoever. It’s a damp squib.

So what’s gone wrong? Three things – non-compliance, under-compliance and, in certain cases, over-compliance.

A significant proportion of contracts in our market simply ignore social value. It’s just not present. This is for two reasons. The first is out-and-out non-compliance, for which there is no excuse. The second is the use of framework contracts, the individual lots of which are under the financial threshold for inclusion. These commissioning authorities are missing out.

That’s why we’re calling for a change to the wording of the Act. We want the words ‘to have regard to social, economic and environmental well-being’, which is pretty optional, changed to ‘must have regard to…,’ which would give the Act more ‘teeth’, compelling commissioners to take action. We are also calling for commissioning organisations to publish both their policy in regards to social value and an account of their actions.

To address the framework contracts issue, we are calling for the financial threshold for application of the Act to be lowered or eliminated. This would also engage a huge range of smaller VCSEs in public procurement.

Our second issue is with under-compliance. On too many occasions, the social value proportion of contracts is trivial and cannot move the dial. If the social value element is too small, then the tender process cannot sensibly differentiate between lightweight CSR and genuine social impact. That’s why we’re backing the calls made by other social enterprises that authorities should, at the very least, match Manchester’s policy of 20% social value in all commissioning.

Our final issue is with over-compliance, which may sound strange. However, we have noticed an alarming trend in some commissioning, where what is defined as social value is deeply over-prescribed. This locks out the innovation that social enterprises can bring if their methods of impact don’t fall within a narrow scope. We would urge commissioners to think about the outcomes they want from social value, rather than the inputs and outputs. That way it will be less management-tree-planting-greenwash and more transformative social change.

We’ve set out a package of proposed changes in policy paper, which we hope our stakeholders will read, share and debate, aiming to influence government. Because if we really want the Act to live up to its potential, we have to act ourselves.


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