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Social Value Act - NEW Cabinet Office Guidance

Published by Yvonne Atkinson on Monday, January 21st, 2013 at 12:47 pm

As I mentioned in my first blog the Public Services (Social Value)  Act 2012 comes into force on 31 January. Please see the Public Services (Social Value) Act 2012 (Commencement) Order 2012 (SI 2012/3173 (C.124)),   published on 21 December 2012.


The Act introduces a new statutory requirement for public authorities to have regard to economic, social and environmental well-being in connection with public service  contracts let by public authorities and includes housing associations. Recent Guidance published by the Cabinet Office  on 2oth December 2012 has confirmed that it intends that the Act now only affects service contracts above the EU public procurement threshold.  For all other contracts the Best Value Statutory Guidance will apply in connection with local authority let contracts and the HCA VFM Regulations will apply to Housing Association let contracts in England and Welsh Government regulation of RSLs in Wales 

The Act states that the authority/housing association must consider how what is proposed to be procured might improve the economic, social and environmental well-being of the relevant area and how in the process of the procurement it might act with a view to securing that improvement. When considering these matters the authority/housing association  must consider only matters that are relevant to what is proposed to be procured and in doing so the extent to which it is proportionate in all the circumstances to take those matters into account.

All contracting authorities including housing associations will need to ensure that they fully consider the requirements of this Act when planning and procuring their service contracts. In particular they will need to also take into account how the Act related to the EU public procurement rules.  The main thrust of this Act is a requirement to consider and consult about social value before letting contracts. This does not conflict with EU Public procurement law. Care will still need to be taken to ensure that the social value sought meets EU public procurement  legal requirements. However the EU is currently considering how to change these rules to widen the scope of what social value can be taken into account. 

Who should be consulted and how should it be done? This is going to be an issue for procurement officers and their departments. Commissioners will need to consider consulting with supply markets before formal procurements begin to develop new innovative specifications that enable social value to be created and measured as part of the contract award process. Consultation will be particularly relevant when considering procurements for services for social care or that are delivered direct to service users 

The Guidance says " The expectation is that consultations should be “digital by default” and carried out on line if at all possible but authorities should consider the types of services they are looking to procure and the best way of getting the views of potential users who may not be familiar with modern IT."

The Cabinet Office Guidance is  Procurement Policy Note on the Act – PPN 10/12: Advice for Commissioners and Procurers. 

This is an exciting and fast developing field of law and public policy. We at BDA are working with Housing Associations in developing social value outcomes and impact measurement  as part of their VFM and Procurement Strategies.  Join our Procurement Working Groups  coming together across the country to discuss new specifications in contracts. We have developed a Proxy Value Bank a bank of knowledge about what values can be applied to evidence social value creation. Let the bank do the work for you. Click to find out more about the Proxy Value Bank .

BDA launched a survey of  social landlords in December 2012 to find out what social value Housing Associations are currently creating and measure. Click  to complete the survey 

To find out more about the Act and Social Value measurement come to our Conference on Social Value and Value for Money on 27 February 2013 at the Radisson Blu Hotel Birmingham.  



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