How will the Public Services (Social Value) Act affect your procurement processes?

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How will the Public Services (Social Value) Act affect your procurement processes?

The Public Services (Social Value) Act came into force on the 31st January 2013. The Act requires public authorities, to take into account ‘social value’ at the pre-procurement phase of procuring/ commissioning services rather than focus solely on the price or quality of their contracts.

To ensure that social value has been taken into account, relevant bodies must reference at pre-procurement stage, how what is being procured might ‘improve economic, social and environmental well-being of the relevant area and how that improvement could be secured.’

Furthermore, those bodies affected by the Act will be required to consider whether it is necessary to consult the communities affected in the locality of the contract.

Amongst other bodies, the Act applies to:
Local authorities;
Government departments; and
Housing associations in England.

The Social Value Act sits alongside other procurement laws, complementing existing procurement legislation rather than replacing it. The Act applies to contracts for products and services, but does not apply to contracts solely relating to goods and works contracts.

The act applies to public services contracts whose value exceeds:

£113,057 for service contracts awarded by central government and the NHS
£173,934 for all other contract bids.

Below these thresholds, tests for social value should not be applied in commissioning.

Housing associations are required to:

Take into account ‘social value’ at the pre-procurement phase when procuring a service; and
Be prepared to define the social and economic value and impact of the services they offer when tendering for a service from a local authority or another relevant body.

If you would like more information you can read the Act here, view a brief guide to the Act here, or read a Procurement Policy Note on the Act that the Cabinet Office has issued as guidance to commissioners and procurers here.

If you are unsure about what the Social Value Act requires you to do, or if you would like to check if your procurement processes are still fit for purpose, please contact Chris Wood at chris.wood@nullaltairltd.co.uk for an informal discussion or telephone 07932 693292, or Matt McCormack Evans on matt.mccormackevans@nullaltairltd.co.uk, 07931 752 786.