A Social Value Act for Northern Ireland
Social Enterprise NI Position Paper
Background
For many years the Social Enterprise sector in Northern Ireland has called for
legislation to ensure that social value is included in public procurement.
Through the introduction of Social Enterprise NI, a voice for the local social
enterprise sector, this call has intensified and we are delighted that in early 2017 it
was confirmed that Northern Ireland will receive its own Social Value legislation.
This paper explores the context of Social Value legislation and sets out Social
Enterprise NI’s key calls for an NI Social Value Bill.
Social Value Legislation in GB
The Public Services (Social Value) Act came into force on 31 January 2013.
Key points:
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It was first introduced by Chris White MP as a Private Member’s Bill in 2010. The Bill
received cross-party support.
The Social Value act places a duty on certain public authorities, at the preprocurement phase of purchasing or outsourcing services, to consider the additional
economic, social and environmental well-being of an area could be improved by the
service being procured and award contracts accordingly. There is also a
requirement that authorities consider whether to consult on these matters.
The Act extends to England and Wales.
In Scotland the Procurement Reform (Scotland) Act 2014 makes similar provisions.
Put simply, before beginning the procurement process, commissioners are required think
about whether the services they are going to buy, or the way they are going to buy them,
could secure social, economic and environmental benefits for their area or stakeholders.
Reviewing the Act
Two years after its implementation Lord Young was tasked with carrying out a review of the
Act. The review sought to look at how the Act has been operating in the two years it has
been in force, exploring any barriers that exist to its implementation, and to consider
whether the scope of the Act should be extended.
The review found that where the Act was being used it had a positive impact. However it
also identified three main barriers and suggested methods to address them1:
1
See The Social Value Act in 2016: challenges and opportunities, at https://www.pioneerspost.com/newsviews/20160122/the-social-value-act-2016-challenges-and-opportunities, for more information.
Barrier
Recommendation
1. There was a general lack of
awareness of the Act.
The Cabinet Office should promote better
awareness and take-up of social value across the
key parts of the public sector and business. This
should focus on small businesses, health, central
government, Commissioners and procurement
officers.
The Cabinet Office should also continue to promote
awareness and take-up amongst key areas where
awareness was found to be growing, including the
voluntary sector and big businesses.
2. How the Act was being
interpreted lead to
inconsistencies in how it was
applied, particularly around:
Cabinet Office should promote better understanding
of how to practically apply the Act, particularly
around:
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• The definition of social value and
how and when to include it during
the procurement process
• How to apply social value within
a legal framework and
procurement rules
• Clarifying its use in preprocurement.
3. A Measurement of social
value had not been fully
developed.
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Knowing how to define social value and how
and when to include it during the procurement
process
Applying social value within a legal framework
and procurement rules
Clarifying its use in pre-procurement.
Inspiring Impact, a ten year programme led by the
voluntary sector to develop impact measurement,
would be asked to:
 Develop a methodology for commissioners to
assess the additional value provided by a social
value contract (including developing a generally
agreed way of measuring social value, possibly
via consultation).
 Set standards for measurement, considering
what degree of measurement might be required
for different types of procurement.
 Promote good measurement principles across
sectors, paying particular regard to the need to
avoid any potential burdens on small
businesses, including voluntary organisations
and social enterprises.
In terms of extending the Act, for example:
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To cover contracts for goods or works (or other types of contracts such as asset
disposal or planning);
To cover contracts with a value below the OJEU threshold;
So that commissioners would have to consider it at later stages of the procurement
process; or to
To mandate that commissioners would have to include social value for all contracts,
regardless of their value.
It was decided that only until all of the identified barriers were addressed it would it be
appropriate to assess if the Act should be extended.
Reactions to the Social Value Act
The Social Value Act is widely acknowledged as a step in the right direction, and although
its intentions are commendable, it has been widely criticised for its weaknesses, namely:
 It is not robust enough, to ask commissioners to ‘consider’ social benefits does not
go far enough.
 There is no obligation for commissioners or procurement professionals to monitor
their actions.
 Dedicated training and awareness raising to increase knowledge of social value, or
indeed the Social Enterprise Sector, should have been built into the Act.
Although some of these criticisms were addressed in Lord Young’s review, many were
disappointed that he failed to encourage an extension of the Act or a strengthening of its
powers. Many, including Liverpool Councillor and mayoral lead for social value Rosie Jolly,
have called on Government to make the Social Value Act compulsory.
Social Value Legislation for Northern Ireland
Northern Ireland has a vibrant and innovative Social Enterprise sector. Yet despite around
£3billion being spent on procuring public services each year, no legislation similar to the
Social Value Act is in place.
Social Enterprise NI has been at the forefront of lobbying for social value to be included in
public procurement in Northern Ireland. In particular, the Social Enterprise All Party Group
called on local politicians to introduce legislation similar to the Public Services (Social
Value) Act in the Assembly.
We were delighted to receive news that at the meeting of the Procurement Board on 13
January 2017 approval has been granted to proceed and bring forward legislation in the
form of a Social Value act for NI.
It is expected that pre-consultation on the ‘Social Value Bill’, which will place a statutory
duty on public authorities to maximise social, economic, and environmental wellbeing
through public procurement, will take place in early 2017 with key stakeholders.
Social Enterprise NI intends to work closely with policy makers to bring
forward this legislation. In particular, we will call for:
1. A Social Value Bill which is robust, going above and beyond existing models in the
other regions of the UK. For example, covering all types of contacts (not just
services) and at each stage of procurement.
2. Procurers must have a duty placed on them around social value, rather than simply
to ‘consider’ it.
3. Dedicated training for procurement professionals on social value should be
compulsory.
In this respect Northern Ireland is well placed to build on the progress we have seen in the
other parts of the UK. Social Enterprise NI, as the representative body for the sector, has
offered to be involved in early discussions and consultations.
For further information please contact:
Colin Jess
Director
Social Enterprise NI
Landline:
Mobile:
Email:
Web:
028 9046 1810
07872 470 327
[email protected]
www.socialenterpriseni.org