I have been thinking for a little while about doing a blog post on the new Public Services (Social Value) Act, and when I came across an article on the topic by former NAVCA CEO Kevin Curley it finally spurred me to action. Curley discusses some of the potential issues with the Bill and the way it will be implemented, and many of his thoughts echo ones I have been mulling over myself.
The Act sets out a new requirement that “public authorities to have regard to economic, social and environmental well-being in connection with public services contracts; and for connected purposes.” This has been well received by many in the civil society sector, who have been arguing for a long time that charities and social enterprises have been at a disadvantage when competing for public service contracts because they are unable to make the most of all the benefits they can offer. It is hoped that this bill could improve the situation.
Given this, it is quite tricky to look at the Act critically right now. No-one really wants to be negative, as it is an admirable achievement by Chris White MP and all those who worked with him to have managed to get a Private Members Bill on a topic like this all the way through Parliament and into legislation. And that should definitely be celebrated. However, the bulk of the work really begins now: ensuring the law is implemented in a in such a way that it actually achieves what it is supposed to, and is not distorted or watered down. It is important, therefore, to be aware of some of the issues.
The main issue is one of culture: do commissioners have the requisite mindset and skill set to factor social and environmental value into their service design and delivery decisions? The evidence suggests not. There are some examples of really innovative, strategic approaches to commissioning out there, but on the whole there is still a tendency for commissioning to be seen as synonymous with procurement and therefore for services simply to be purchased on the basis of what was done in the past.
Many of the elements of the current commissioning framework were developed to deal with a notion of outsourcing that was all about compulsory competitive tendering (CCT) and driving down cost through competition on price. It is unsurprising, therefore that commissioners are not particularly well-equipped to make holistic assessments of value and implement services that deliver this. The danger is then that the new requirement is just seen as another box to be ticked.
As Kevin Curley noted in his article, this is not the first time that commissioners have been called upon to use a broader notion of value either: the Best Value Statutory Guidance for Local Authorities issued last year did so, and even as far back as 2003 the HM Treasury Green Book, which gives rules governing central government spending decisions, stated that:
“social and environmental costs and benefits for which there is no market price also need to be brought into any assessment. They will often be more difficult to assess but are often important and should not be ignored simply because they cannot easily be costed.”
Unfortunately neither these nor other initiatives have had any discernible effect. And as Curley asks, “why will they [i.e. commissioners] take any notice of Chris White’s Act?”
Of course, where previous efforts have merely suggested that it would be desirable for a broader notion of value to be used, the new Act does enshrine a legal requirement on commissioners to take social and environmental factors into account. The potentially worrying thing, though, is that the Bill itself contains some apparent wriggle-room for those who are not minded to comply: there is a provision that in cases where a procurement needs to be made “urgently”, the commissioning body may “disregard the requirements to the extent that it is not practical to comply with them.” This does raise the question of whether there will be a notable upturn in the number of procurements deemed urgent.
The Act also does not seem to require that a commissioning body actually consult before deciding on the question of social and environmental value, which would seem to be a fairly important part of the process. If you do not consult users and citizens about what they deem valuable, then on what basis are you making the decision? These are issues that the National Audit Office and others will have to keep an eye on.
Assuming the more optimistic point of view- that commissioners buy into the new legislation and see it as an opportunity to be more strategic- there is still a big question about how social and environmental value is actually to be assessed and measured. There is no demand at this point for commissioners to put metrics on these aspects of value, but it seems likely that it will become more important to do so further down the line in order to justify spending decisions. It is vital that commissioners work with charities, social enterprises and others to develop a shared understanding of how to measure and report value effectively.