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Labour would ringfence some contracts for social enterprises

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Labour has pledged to reserve public service contracts for social enterprises if it wins next year’s election.

Shadow minister for social enterprise Chi Onwurah said the party wanted to make it easier for third sector bodies to win state work.

The European Parliament earlier this year agreed a law change to allow public bodies to insert clauses into procurement notices requiring bidders to be employee owned.

Labour said it would use the new rules to keep some three-year contracts exclusively for organisations “in the pursuit of a public service mission”. 

Ms Onwurah said: “Public procurement remains a significant and growing concern for many social enterprises, who feel locked out.  

“Many public service sectors are now dominated by the same big companies. We want to make it easier for not-for-profit, community-focused organisations to win government contracts. 

“To help drive this, a Labour government in 2015 will enable departments to offer some contracts exclusively for organisations in the pursuit of a public service mission.”

A spokeswoman for the MP said the party would encourage councils to follow suit. 

Ms Onwurah added: “We want to draw on the innovation of social enterprises. Rooted in their communities, social enterprises can identify new, effective and enterprising ways of delivering public services.”

Campaigning body the Social Economy Alliance welcomed the announcement.

Director Celia Richardson said: “Social enterprises and their supporters will be delighted by this announcement.

“We campaigned long and hard for the new Social Value Act, and for changes to EU rules, so that local, socially driven organisations can win in public service markets.

“No one wants to see £10bn a year in taxpayers’ money going to just 20 private businesses. This is not what a 21st century, balanced economy needs and not what public service users need.”

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