The Crown and Social Value

27^th April 2015

One of the more intriguing ideas to emerge from Cabinet Office under the Coalition government has been the resurrection of the concept of ‘The Crown’. Of course we’ve heard the rhetoric of joined-up government for decades now. But joining up sounds rather like a bit of an effort – something officials have to choose to get up from their desks to do, like some enforced office fun or a tedious team away day.

But the idea of ‘The Crown’ is all together weightier. Instead of saying “Come on! We really need everyone to get involved – you’ll love it!” it instead suggests “We’ve always done it this way, you’re doing it whether you like it or not”. It says taxpayers’ money is one big pot and silos are an illusion. Legally, this is one big beast. Officials, deal with it.

Sadly, this bolder talk still hasn’t made much difference in practice. Until departments have vetoes over others and we have more cross-departmental Ministerial posts, more pooled Budgets or Star Chambers, national silos will triumph over the local and the lateral. Or perhaps until someone in government realises the potential of the Social Value Act, widens it in policy and strengthens it in practice.

Imagine explaining the concept of social value in procurement to an alien, or maybe even just someone not very well versed in the behaviour and practice of public spending:

“So this exciting and radical new law means that people spending public money have to think about the, er, total difference it makes to, er, to people.”

“As opposed to? To not thinking about what the total impact it has?”

“Er, yes. We, er, used to just think about just some of the difference it made.“

“Right. Okay …”

Or let’s turn to the politician’s favourite analogy of home economics. Let’s say the cheapest way to kill the weeds on your lawn is to douse it with a bit of petrol and set fire to it. The quickest way to get to sleep is to go a bit crazy with the sleeping pills every night. The simplest way to raise money for your holiday is to sell the house.

Of course these are far from sensible and sustainable methods of household management. Each approach ignores the wider impact on your household – the impact on clean air, green space, keeping costs down in the long-term, family health and wellbeing.

What’s more likely is that your own personal Department for Agriculture consults with your Department of Public Health when it wants to solve the weed problem. When your Public Office for Wellbeing tries to hit its target of eight hours sleep, it has to get permission from your Department of Health. Your Ministry for Finance needs to consult with the Department of Housing before it sells the whole thing off.

So our fledgling Social Value Act, which currently applies only to the pre-procurement stage of certain services and above a threshold is really just the start. It needs deepening and widening. We need progress in policy and in practice.

We need to widen it to goods and works, below thresholds, to public sector asset management and disposal, and to all stages of commissioning and procurement. We need to make sure new City deals and housing policies don’t lead to firesales of public assets to the cheapest bidder without due regard to the impact on communities. We need local authority pension funds to divest from dirty asset classes and antisocial businesses. Or better still, to invest in pro-social enterprise.

And we need to deepen it by giving the Act teeth and by challenging those who choose to ignore it. We need to develop and share tools and good practice. Officials need to go further than just consider it – they need to account for it. We must change behaviours and cultures, get inside the heads of local authority finance officers and procurement officers, understand what drives them and then change their incentives. We need carrots and sticks, naming and shaming, awards and ambassadors. We need new Ministers to see the opportunity and wade into it.

At any time, but particularly in tough economic times, the narrow, short-termist use of public assets is a scandal. Social value is about smarter and more effective management of the public finances. This is one for the Crown in the first 100 days after the election, whoever wears it.