Getting bolder with social value in procurement

30^th April 2015

Working together will be the big theme of the new few years if we are to meet social need effectively. A new configuration of dependency, independence and inter-dependence in services for the public (and with and by the public) will be necessary in which public money and resources provide the seeds for change and not the whole medicine. And it is in this broad context that the possibilities of using the processes of public procurement to optimise social value need to be understood and embraced.

It’s an exciting time for procurement lawyers such as me. Contracting authorities in England, Wales and Northern Ireland are getting used to a new set of public procurement regulations implementing the latest version emanating from the European Union. These are the Public Contracts Regulations 2015. Scotland can look forward to a similar experience later in the year, albeit there it will be heralded as very much an opportunity to stimulate innovation and community benefits in the public realm.

I’ve been visiting local authorities and social enterprises to facilitate workshops that help them think about how the new rules will be relevant to them. And there are important changes that enable much more to be done to embed social value in commissioning services for the public which are entirely complementary to the spirit and letter of the Public Services (Social Value) Act 2012.

On my commute to work a couple of weeks ago, I caught up with some reading that I had yet to complete on my return from a restful Easter break. It was the Crown Commercial Service’s new Guidance on Awarding Contracts, which pointed out that:

• the new unified basis for tender evaluation enables factors to be taken into account that can include qualitative, environmental and/or social aspects, linked to the subject matter of the contract. The inclusion of social aspects is a new feature and a positive change;
• Regulation 67(3) (a) of the 2015 Regulations refers to trading and its conditions. As recital 97 to the 2014 Directive (on which the 2015 Regulations are based) sets out, award criteria relating to trading and its conditions can for instance refer to the fact that the product concerned is of fair trade origin, including the requirement to pay a minimum price and price premium to producers;
• every award criterion used must be linked to the subject matter of the contract. What counts as linked, however, has been clarified in the new directive and implemented in Regulation 67(5) of the 2015 Regulations. In short, the manufacturing and production processes can be looked at, not just the content of the product itself!
• in the FAQs bit of this guidance, this question is posed: “What other criteria apart from price or cost might a BPQR ( best price-quality ratio) approach include?” And this answer is offered: “Using the example of printers … , other criteria could include: use of recyclable materials for the production of the printers, length of warranty, after sales service, noise emission, involvement of persons from a disadvantaged group in the production process and user friendliness.”

Unpacking all this, it means that there is no doubt that local authorities, Government departments, NHS bodies and housing associations, to name just a few of the contracting authorities covered by the Public Services (Social Value) Act 2012, can describe in the specifications for public services requirements to alleviate poverty, tackle climate change, pursue social justice, and bridge the gaps between the “haves” and have nots”. They can and indeed should evaluate tenders submitted in response to such specifications, using criteria that are connected with the requirements specified.

We can, in short, help the public, private and voluntary sectors, to get out of the narrow mind set of “added value” and Corporate Social Responsibility and instead into the space of social value at the heart of resourcing services for the public. It’s not the law that stops people driving social change through public procurement, but culture and lack of adaptability that is the biggest boulder that blocks good practice. It’s time to stop being “doubting Thomases” waiting for the evidence.

We really should see the public purse as containing seeds that, if sown, can bear the fruit of binding the broken and making people whole again. The question should not be “what are we buying?” but “how are we facilitating the improvement of society?”.  If we take this kind of approach it won’t just be the technical procurement specialists who are fascinated by the refreshed EU procurement regime! Procurement for the common good can help unlock the reciprocal, responsible and relational “community of communities” that we can all be a part of. Are you in?