October 26, 2011

Bill focuses on social value of public sector contracts

by Jan Harris

A new bill is making its way through Parliament, which would ensure that ‘social value’ is considered when public sector contracts are awarded.

The private member’s bill, put forward by Conservative MP Chris White, aims to push the concept of social value to the front of the public sector procurement process.

This would mean that all public sector organisations would have to consider the social value of the contracts they award in order to ensure that they have a positive social and environmental impact on the local area.

Currently the emphasis is on securing the “best value” for taxpayers’ money, which means accepting the bid of the cheapest provider who can offer the required quality.

The government has been criticised for awarding major contracts to overseas companies, even though jobs are desperately needed in the UK, because under current rules the contract has to go to bidder offering best value.

The bill covers services such as accounting, advertising, education, care and recreation, as well as emergency, health and government services.

It has cross-party support, but the government has been criticised for cutting key clauses including a requirement for local authorities to promote social enterprise in their area.

The bill has been welcomed by the Federation of Small Businesses which believes it could help SMEs secure public sector contracts.

It is due to go to the report stage in the House of Commons on 25 November.

In related news, the Scottish government has launched a website to help Scottish companies bid for public sector procurement contracts.

The Supplier Journey site will guide businesses through the application process.

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