Since the Public Services (Social Value) Act went live on 31 January 2013, the commissioners of all public funded organisations have been required to consider the economic, environmental and social benefits of all procurement activities, considering how procurement proposals might improve the economic, environmental and social wellbeing of the relevant local area.
It puts social value at the heart of the commissioning process by ensuring that authorities consider the wider social, economic and environmental benefit they can achieve when buying services.
For those providing these services, the Act ensures that the social impact is recognised and rewarded when they compete for public contracts. Indeed the ability to effectively create social value is now being viewed as a route to competitive advantage with both public and private clients.
Of course, this places a requirement on contractors to demonstrate, in real and quantifiable terms, the social value of their activities.
Who does the Act apply to?
All English and some Welsh bodies (those not solely or mainly under the jurisdiction of the Welsh Assembly Government) have to comply with this law. This includes local authorities, government departments, NHS Trusts, Primary Care Trusts, fire and rescue services and housing associations.
How does this affect the private sector?
While the legislation only applies to public sector organisations when procuring services, there is a clear shift towards social value in many other businesses as they understand what society expects from a responsible business, and as they appreciate the benefits of adopting such an approach to their spending. Being able to demonstrate social value can also help gain valuable support through the planning process.