As Chris White MP’s excellent Public Services (Social Value) Bill is enacted it is important that its ethos and ambition is embraced across the public sector by commissioners, procurement executives, senior managers and political leaders. It is equally important that business and social sector providers also embrace it. And, of course, staff delivering public services in all sectors.
The Bill is not as strong as its original draft form, but nevertheless it sets a new tone and hopefully culture for public procurement. Social outcomes, benefits and disbenefits should always be as critical to procurement decisions as price and direct service quality – though they should never be an excuse for a failure to secure value for money.
When money is spent on a public service there can and should be additional gains for the community and society. These could be local employment, local sourcing of materials and goods, apprenticeship and training programmes for disadvantaged groups, employment standards and practices for employees – for example payment of the ‘living wage’, co-production that empowers service users, the use of sustainable products and much more. These will be different for different services in different places. The public sector and the taxpayer get a social return on the expenditure and not simply an economic one, even though the social impact should be quantifiable and certainly has to be measurable.
It is very important that throughout a procurement process the public sector client is clear about the social goals that it expects to see and how it will measure them. There is a risk that this element of the process will either be so bureaucratically complicated that it deters innovation and some potential suppliers from bidding or that it is simply paid ‘lip service’ to.
There must be dialogue between the sectors to ensure that the right balance is struck and that practical and affordable arrangements are used. There has to be some consistency in how social impact is measured and users and communities must be key contributors to this measurement.
Public sector commissioners, senior executives and political leaders should apply the same criteria for setting social impact targets and accountability for them to all providers, irrespective of their sector. The ethos and aims of the Act have to be applied to all public services irrespective of who delivers them – business, social, community or public sector. This must not be regarded as only having application when services are contracted, especially if such an approach is based on the premise that the public sector always adds social value.
In this way social value measurement can be used to influence investment and budget decisions as well as commissioning and selecting service delivery options. It can become a fundamental element of the culture of the public sector.
At a time of concern about ethics and standards in the business sector in particular, here is also an opportunity to ensure that social impact includes employment practices, governance standards and the ethics of providers. If a provider pays its most senior staff a massive multiplier of its lowest paid employees then this could be deemed to result in a negative social impact.
This final point illustrates the necessity to take into account negative as well as positive social impact and to net these off.
Through his imaginative Act Chris White has offered the public sector a powerful tool for driving change and making hard but necessary decisions. He has also placed public services well beyond the narrower confines of consumer services. It could lead to a cultural shift in public service commissioning, procurement and delivery. Indeed it is vital that the legacy of the Act is such a cultural change rather than a new set of processes!
Public value, social value, value for money – these should be the underpinning trinity of modern public services.