The Public Services (Social Value) Act 2010-12 - good news for ethical suppliers

This year has seen the introduction of the ground-breaking Public Services (Social Value) Act 2010-12, which obliges public sector contracting authorities to take on extra accountability for the social value of the suppliers to whom they award contracts.


The act aims to ensure that public bodies consider how the public service contracts they award can be used to improve the social, environmental and economic well-being of the communities in which they are active.  While this might sound like a small change, it represents a great opportunity for thousands of charities, voluntary organisations, ethical companies and social enterprises across the UK.

According to Chris White MP, who sponsored the Bill,

“One of the things that most inspired me was the vision of public services; run by our communities, for our communities. This idea recognised that by using the expertise and dedication of voluntary organisations, charities and social enterprises we could not only reconnect people with the delivery of the services that they use, but also help to create better public services from it.”

By introducing a means of properly assessing the benefits of socially-oriented organisations and companies, the Public Services (Social Value) Act will hopefully represent a way to level the playing field and allow these ethical suppliers to get a fair opportunity to bid for, and win, public service contracts that will not only help them to grow, but will help the community around them.

For an organisation like Recycling Lives, which offers high reuse and recycling rates, runs its own social welfare charity and has a number of social enterprise schemes, the introduction of the Public Services (Social Value) Act can only be a good thing.

The company, based in the heart of Preston, has balanced its commercial success with the pursuit of ever-higher recycling rates and the steady growth of social and ethical projects that have tangible benefits for communities across the North West.

As one of the largest employers of local people, Recycling Lives is an organisation that participates in many “back to work” initiatives – often assisting the most disadvantaged individuals and giving them a chance to return to independent lives. The results are undeniable: Social Return on Investment (SROI) analyses indicate that Recycling Lives saves the tax payer up to £35,000 for every individual it helps.

Too often, the same firms win repeat contracts from public bodies simply by offering the lower up-front price. However, the Public Services (Social Value) Act should ensure that short-term financial gain is no longer seen as the be-all and end-all of public sector procurement.  Communities are starting to understand that more needs to be wrought from their tax payments, and that contracts need to be awarded to firms with a real, on-going interest in the issues that affect both the area and the people who live there.

By putting the onus on public sector organisations to prove that they are considering the whole picture in terms of the benefits that a contract will bring to the local community, the Public Services (Social Value) Act is demanding more for the tax-payer’s pound and setting the foundations for stronger communities in future.