PSNC Briefing 002/13: Public Services (Social Value) Act (January 2013)

PSNC Briefing 002/13: Public Services (Social Value) Act (January 2013)

The Social Value Guide was published by Social Enterprise UK in November 2012. The guide describes the impact of the Public Services (Social Value) Act 2012 in commissioning of services by public bodies.  The Act received Royal Assent in 2012, and the main provisions in ss 1 & 2 came into force on 31 January 2013.

The Act requires certain public authorities at the pre-procurement phase of procuring services to consider how what is being procured might improve the economic, social and environmental well-being of an area and how the authority might secure that improvement in the procurement process itself. There is also a requirement that authorities consider whether to consult on these matters.

Guidance on taking into account social and environmental issues in the context of procurement has been published: Social issues in purchasing (February 2006) and Joint note on environmental issues in purchasing (October 2003). Guidance on the best value duty, Best Value Statutory Guidance (September 2011) has been published which requires certain public authorities to consider overall value – including social value – in the provision of services.

The pre-procurement obligations apply when an authority proposes to enter into a public services contract. There are some exceptions, including threshold values below which the Regulations do not apply – £113,057 for central government and £173,934 for other public bodies.  Although these are significant thresholds, it is likely that LPCs and their contractors will see commissioning above these.

One of the interesting features of the Act is that public bodies may ‘exercise a function by reference to a non-commercial matter to the extent that the authorities consider it necessary or expedient to do so in order to comply with the requirements of the Act’ – this means that local authorities may need to think outside the pure financial value for money of their contracts and consider the ‘social’ values of the contracting.  The Social Enterprises UK guidance referenced above includes a number of examples of procuring deliberately for social value, for example – ‘A health contract which, based on consultation with service users, includes criteria such as investing in employees, the ability to evidence training, improved motivation and outcomes, and also the ability to meet the desires of the community’.

The Act and the statutory Guidance, as well as the guidance issued by Social Enterprise UK extends well beyond the issues that I have recently highlighted (concerning the use to which profits can be put by Community Interest Companies).  The Act and guidance could be very helpful for local pharmacies, providing local services, even to the extent that one might argue that commissioning a local provider secures local employment opportunities.

If you have any queries on this PSNC Briefing or you require more information, please contact the PSNC Services Team at:

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