Understanding the Social Value Act

In January 2013, the Public Services (Social Value) Act came into force. The law calls for public sector commissioners to try to weave in social and environmental benefit that is beyond the primary purpose of a contract. This means that public bodies, including housing associations and local authorities, can ask contract providers – whether they are private businesses, charities or social enterprises – to deliver services in a way that also creates added community value. An example of this would be creating local apprenticeships or jobs for disadvantaged people, such as those who are long term unemployed, living with a disability or have spent time in prison.

The Act is the result of a two-year long campaign by the social enterprise sector. As businesses trading for social value, the UK’s 70,000 social enterprises inherently place social value at the heart of how they work. But support for the Act goes far beyond the social enterprise community. With less money from the public purse available to go round, the Act allows commissioners to get more bang for their buck. From the contractor building premises to the caterer who supplies the sandwiches for meetings, the decisions public bodies make about the providers they do business with can have a huge knock-on effect.

Each and every pound of public money spent needs to be working as hard as it can for local communities across the country. That is why we are so pleased that private firms are embracing the Act alongside social enterprises and charities. Over the past twelve months, the team at Social Enterprise UK has noticed a marked increase in the number of private companies wanting to understand how they can take practical steps to create social value and report on their social impact. This is not surprising, as many private companies deliver contracts on behalf of public bodies. One of the UK’s largest construction firms, Wates, with whom we are working, does 70% of its business with the public sector.

One way in which Wates is delivering social value is through its supply chain: the firm recently launched the industry’s first Social Enterprise Brokerage Scheme. The aim is to get every one of its construction sites in the UK trading with social enterprises, and to spend £5 million with the sector by 2015. With our help, a ‘one stop shop’ of social enterprises has been created from which the company’s teams of construction workers can source services. The company is on track to meet its target and has so far traded around £4 million with the social enterprise sector.

Social value pioneers in the private sector are also taking steps to create employment opportunities and local economic growth, and reduce environmental damage. Landmarc Support Services, which manages the Ministry of Defence’s national training estate, is investing £750,000 over the next two

Each and every pound of public money spent needs to be working as hard as it can for local communities across the country

years in rural communities through initiatives including; Landmarc 100, which will provide financial support and mentoring for 100 start-up enterprises; and The Rural Enterprise Hub, a free-of-charge touch-down office facility for rural entrepreneurs. And in 2013, the company diverted 94% of all waste from landfill, up from 70% in 2012.

Contractors, in both the private and social enterprise sectors, also have to measure their social impact – this helps them understand, manage and communicate the social value that their work creates in a clear and consistent way. Information about social impact provides substance and strength to contract bids, informing commissioners of the added or increased benefits. But measuring your social impact is also good for staff morale, and also when selling to other customers. People like to work and do business with organisations that are doing good things for the communities they work in. Creating social value has many advantages.

For more information and resources on the Act, visit www.socialenterprise.org.uk

Author of this article

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			Peter Holbrook

This article first appeared in the 2014 bulletin publication.
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