Public sector procurement: Good for Social Enterprises?

Social enterprises may be missing out when it comes to public service procurement – but the Social Value Act will help them bring innovative solutions to public service contracts.<!–more–>

The Government’s procurement reform programme started in 2011 and aimed to reduce public body spending without affecting the quality of public service provision by simplifying the procurement process, but it is argued that further changes need to be made in order for small businesses and social enterprises to have a fair chance of securing public contracts.

The Public Administration Select Committee held a meeting last Tuesday, attended by three witnesses with an interest in small businesses and social enterprise: Peter Holbrook, Chief Executive, Social Enterprise UK; James Allen, Head of Public Services and Partnerships, National Council for Voluntary Organisations (NCVO), and Mike Cherry, Policy Officer, Federation of Small Businesses (FSB). All were in agreement that the process had been improved since the changes, and they praised the Government’s efforts to help prospective providers search for available contracts and identify obstacles in the process.

But more needs to be done – such as improving the pre-qualification questionnaire (which is filled in when organisations bid for work) and addressing late payment issues. “What we’re seeing initially is a real interest in involving small business and social enterprises but a lack of experience and cultural understanding around how to do that,” said Allen.

Holbrook’s view was that upscaling and aggregating contracts, intended to increase efficiency, actually “limits the opportunities for small providers” – and it is these providers that often have the ability to drive public services forward with innovation and creativity. Social businesses are, he added, lacking in confidence about their future role in public service provision.

Social businesses may now have a better chance of winning public service contracts, however, because of the recently implemented <a href=””>Social Value Act</a>. It is obviously too early to tell how things will pan out, because it has only been in force for a month. But for the first time, public bodies such as local authorities are required by law to consider how service providers will add to the social, economic and environmental well-being of an area when they are bidding on a contract.

Recycling Lives welcomes the new Act, as well as any efforts the Government may make to streamline the procurement process, provided that the result is a greater opportunity for social enterprises to flourish. The Recycling Lives social business has a commitment to Corporate Social Responsibility, being dedicated to developing innovative waste management solutions and sustaining charity through metal and waste recycling. This includes our own social welfare charity, which helps homeless individuals find accommodation and employment in waste management – a clear demonstration of our ability to increase social value.