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Social value in government procurement

A consultation on how the Government should take account of social value in the award of central government contracts.

Objectives of the consultation

The Civil Society Strategy committed the Government to use its buying power to drive social change. Central government will, in future, take better account of social benefits in the award of its contracts. This will have the effect of levelling the playing field for all types of businesses including small businesses, voluntary and community sector organisations and social enterprises, encouraging employment opportunities, developing skills and improving environmental sustainability.

The Public Services (Social Value) Act 2012 already places a requirement on relevant contracting authorities to consider, in respect of procurement for services (a) how the economic, environmental and social well-being of the relevant area may be improved by what is being procured and (b) how, in conducting the procurement, they might act with a view to securing that improvement. Contracting authorities must also consider whether to consult the market on these issues before the procurement process starts.

The approach proposed in this consultation paper will go further in requiring central government departments to take account of social impact as part of the award criteria, where the social impact is linked to the subject-matter of the contract and proportionate to what is being procured.

The requirements proposed in this consultation will apply to all Central Government Departments, their executive agencies and Non-Departmental Public Bodies when undertaking procurements which are subject to Part 2 of the Public Contracts Regulations 2015.

This consultation closed on 10 June 2019.

Supporting papers

To download the consultation document, please follow the link below.

CIBSE response

CIBSE very much supports the intent of the Social Value Act and is aware that its application is still relatively limited due to lack of awareness and guidance. CIBSE therefore welcomes this consultation and the proposal to specifically include social value in contract awards criteria. This should make it clearer to procurement teams that social value should be considered alongside cost when awarding contracts, and it should prompt bidders to examine opportunities.

The Institution stressed that the Hackitt Review recommended a radical rethink of the approach to procurement. This consultation is one opportunity to make a change, and we therefore have serious concerns about particular aspects:

  • The consultation proposals are limited to central government departments, their executive agencies and non-departmental public bodies. We do not think it is appropriate to exclude other public bodies, particularly local authorities.
  • The consultation document states that “Procuring authorities are not required to use any of the themes and policy outcomes and it is for them to determine whether or not to do so“. This has the potential to completely undermine the intent of the proposals. There should be a clear statement that social value should be integrated in the awards criteria on all contracts.
  • Most of the proposed metrics are focused on impacts through the supply chain. This is an extremely narrow interpretation of the value that projects can bring, particularly in the built environment where they can influence long-term environmental, social and health and wellbeing outcomes in the long-term and for a much broader community than the supply chains alone.

The Institution therefore advised a rethink of the proposals and included detailed comments in the response as well as possible references and examples of more holistic and comprehensive approaches.

To read the full CIBSE response please follow the link below.