The Public Services (Social Value) Act urges social, economic and environmental wellbeing to be considered in procurement. Seven years after it became law, is it now delivering skills, jobs and growth for local communities?
This is a relevant question given the budgetary pressures faced by public services to deliver front-line services.
The New Local Government Network leadership index recently revealed councils’ diminishing confidence in their resources to deliver services; only a third felt they will be able to provide discretionary services such as libraries and museums beyond 2023.
Other concerns include the plight caused by low-income levels in their local communities and, separate to the index’s findings, dealing with the rise in knife crime.
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So is the act helping to tackle these challenges by embedding social, economic and environmental gain through the process of commissioning public services – as was its intention?
Things are happening. Last year around £25bn of public sector procurement spend was shaped by the act, leveraging activities worth many millions of pounds more in support of local economies. In some towns and cities, it has led to a vibrant, healthy, innovative and competitive marketplace of suppliers embracing small businesses, mutuals, charities and social enterprises.
However, £25bn this is less than 10% of taxpayers’ money spent by the public sector on procurement each year.
What we’re lacking is consistency and best practice in how the act is applied.
Councils need to be more demanding, for instance specifying how much of their money is spent in the local community, and how many local people their contractors employ. Set targets for value-adding activities such as training and apprenticeships, supporting local businesses and charities, improving the environment, helping people with disabilities into work, employing ex-offenders and tackling homelessness. Make sure these are targets for which business can be held accountable.
Measurement is key – are you using social return on investment (SROI) as a way of demonstrating success? For example, Willmott Dixon uses externally verified TOMs (Themes Measures and Outcomes) verified by the Social Value Portal. SROI takes into account the impact on an individual and/or the community – it avoids this becoming a ‘box ticking’ exercise.
From providing work experience and apprenticeships to equipping people with the skills and confidence that breeds aspiration and opportunity, companies like Willmott Dixon who are driven by a purpose beyond profit want to play their part under the Act. Just look at our Building Lives Academy initiative that has already upskilled over 150 people – mainly young and unemployed – since its launch in April 2018
Now think how many more people’s lives we can have a positive impact on if the annual £268bn of public sector buying power is used to leverage more for local communities.
Sarah Fraser is head of the Willmott Dixon Foundation. This oversees the company’s mission to strengthen the wellbeing of local communities. firstname.lastname@example.org