The Public Services (Social Value) Act 2012 came into being with a bit of a fanfare.
Enjoying widespread support on a cross-party basis the Act newly required public authorities to ‘have regard to economic, social and environmental well-being in connection with public services contracts; and for connected purposes’. So far so good? But what has it really achieved?
The timing of the Act in 2012 and coming into force in January 2013 was far from ideal. This was peak austerity for councils across the UK. Faced with budget cuts the temptation of doing ‘more for less’ was to look at the role of procuring contracts through voluntary and community sector organisations, who in turn promised greater opportunities for service co-design, training and employment opportunities, at a local level, supporting local economic outcomes. However, the fundamental flaw in all of this is that vibrant and thriving VCSOs are most often anchored to commitments from local councils in terms of practical support but also funding, in the form of both grants and contract awards. During austerity, therefore, was it really going to be possible to deliver public services on a shoestring under the pretext of social value? Or was this, as many argued, public services on the cheap?
It is notoriously difficult to monitor contract awards to the voluntary and community sector organisations, including forms such as Community Interest Companies, but across the public and VCSO sector there is a widespread recognition that the Government’s own target of £1 in every £3 spent on public service contracts should go to VCSOs by 2022, will be missed.
So, is there anything to celebrate in the Social Value Act? Well clearly the Act, if nothing else, has changed the conversation. The idea that big contractors can deliver the nuances often needed in public service contracts has been debunked. We have also witnessed in the past decade a number of public policy movements that complement some of the intentions behind the Act; ideas which challenge the status quo of large unwieldly mass contracts, instead exploring how better outcomes can be achieved by how we spend the public buck, particularly at a local level.
Evidenced in areas such as Community Wealth Building, the ‘Preston’ model adopted by Preston City Council supports the principles of public sector interventions in local economies that can drive up employment opportunities, training and income, as well as an unapologetic approach to shifting spend to smaller local organisations to recycle money within the local economy, as opposed to traditional extractive economics. Similarly, the Foundational Economy, a collective, made up of mainly European academics, is actively exploring new ways of thinking about economic policy, making some serious and challenging recommendations about how governments across the UK can support better outcomes; for example a recent report on localised food supplies in Wales called on more infrastructure support from the Welsh Government, to develop supply chains, rather than simply an exploration of procurement issues alone. Indeed, the Levelling Up White Paper also gave some tacit recognition to a different kind of local economic settlement that would reward not detract from local economies.
Our own work at APSE in recent years has gone one step further too; challenging the perceptions that outsourcing to a VCSO is naturally a good thing. Indeed, in many cases awarding contracts to unstable organisations, however well-intentioned, can have poor outcomes, not just for public services, but for the workforce. Our own starting position in securing social value is to remind our member councils to get their own house in order.
When services are delivered in-house councils should take cognisance of how they can positively direct local suppliers to engage with them. Councils can pull the levy in extracting social value. For example, in Swansea Council suppliers are encouraged to support training and apprenticeships in the local area; their directly built new homes support environmental outcomes with a ‘Swansea Standard’ supporting Passivhaus-style outcomes on energy performance and lowering fuel bills for residents in initiatives which should help to drive down fuel poverty. Swansea is only one of many councils which provides us with solid evidence of social, economic and environmental outcomes which are being tangible delivered directly by councils.
So, whilst the Social Value Act has served a purpose, APSE would argue local councils should not simply apply the Act’s principles to outsourced contracts, but rather engage in the spirit and intention of the Act, which is to get the very best outcomes from public money.
Whoever is ultimately the provider of public services, social value outcomes should be a golden thread throughout all council activity, not simply a tick box exercise, and not simply something that is only a consideration through the prism of procurement.
Mo Baines is deputy chief executive of APSE (Association for Public Service Excellence)
@apsenews