Public sector contracts are worth an astonishing £3.75 billion. They account for 55% of the UK’s annual contract spend. Money isn’t exactly sloshing around the system at the moment. So you’d think that a new law, which changes the way that public authorities spend those billions, would have attracted attention.
Instead, the Social Value Act has stayed out of the spotlight since it came into effect in January this year. The Act states that public authorities must consider social and environmental impacts when awarding contracts.
But we’re not seeing those changes take effect on the ground. Rather, there is a waiting game going on – and a behind-the-scenes debate about the implications of the Act.
Indications are that the Act is a signpost to the way the public sector will have to spend its money in the future. With less public sector money available and further cuts coming, even the most meek public authorities will realise they must use their spend to increase local social and environmental impact, or risk delivering zero added-value to their electorate. In fact, 50% of councils have already said they intend to change the way they procure to reflect the Act.
As for action by business: as with sustainability, innovative companies believe that the importance of showing added social and environmental value is here to stay. Corporates that already lead on this agenda will use it to boost their ability to win contracts and their reputation. They are already doing this work – the Social Value Act simply adds to the business case.
So what can businesses that want to stay ahead on this agenda do? There are three ways to help shape the way it turns out.
1) Help set the measurement framework
One of the key barriers for public bodies to make use of the Act is measurement. Measuring purely on cost is easy – and simple to evidence in court in case of a challenge. The more cautious public bodies will need a firm framework to measure social and economic impact against - business can contribute to best practice on clear metrics and evaluation.
2) Work in partnership to deliver impact
Global Action Plan is working with Accenture and British Gas to deliver Transform, a programme to train 1,400 unemployed young people in green skills and provide 1,000 of them with jobs by 2015. We are two very different national and global businesses - and a small third sector charity. Working together, we have gone further and had a greater impact than we imagined at the start.
3) Spread best practice
Talking about the Social Value Act and great case studies from your business will shape the landscape around social and environmental impacts – especially helping public authorities understand what excellent looks like. When we launched Transform, it attracted a lot of media attention and twitter activity, as well as lots of emails from enthusiastic councils and young people (and their mums!) keen to be involved. This kind of project captures the public imagination and shows what is possible even in a time of austerity.
So the Social Value Act might be sneaking under the radar – but it is part of a wider movement to create extra value. Imagine what £3.75 billion could do if we all did something a little bit differently.