86. Section 3 of the Public Services (Social Value) Act 2012 requires that a public-sector authority must consider how a procurement might improve the economic, social and environmental well-being of the relevant area. Baroness McGregor-Smith told us that, as shared value models became more prominent, it was necessary "to start thinking about the impact the private sector has upon the communities where it works" and, whether through apprenticeships, working with "individuals who had been disadvantaged in some way" or improving diversity, additional social value was at the heart of a private sector's work on public contracts.89
87. Strategic Suppliers were keen to tell the Committee about their commitment to social value as part of their company ethic and Corporate Social Responsibility Work.90 They expressed concern about the consistency with which its requirements were applied.91 The Government has indicated that greater use of the Act will be included in the measures the Cabinet Office will be implementing to improve Government contracting.92
88. Cabinet Office is obliged to consider wider social benefits of procurements under Section 3 of the Public Services (Social Value) Act. The underuse of the Act could be taken as further evidence that cost overrides any other consideration Government makes in awarding contracts. The enthusiasm of suppliers to see the Act better used gives Government an open goal to achieve more social value.
89. Recommendation: We recommend that there be an expectation of including a social value evaluation in Government procurements and that contracting bodies provide the Cabinet Office with an explanation if they wish to remove the provisions.
90. Recommendation: Government should, as part of every procurement tender, require plans to add social value and ensure social value is a weighted criterion for contract awards
91. Recommendation: Government should enshrine winning bidders' social value commitments into contracts and agree appropriate KPIs for monitoring delivery.
92. Recommendation: We recommend the Government include terms in their standard contracts that provide assurance that the company has appropriate corporate governance and corporate social responsibility policies in place.
_________________________________________________
89 Q127
90 Q 539-40, Q 611
92 Cabinet Office, Chancellor of the Duchy of Lancaster speech to Reform, 25 June 2018, accessed 12 July 2018