17 January 2013 | David Hansom
Public authorities need to ensure they are ready for the implementation of the Public Service (Social Value) Act.
The UK’s Public Services (Social Value) Act 2012 will, for the first time, require public authorities to consider how the services they commission and procure could improve the economic, social and environmental well-being of an area. The operative provisions of the Act are expected to be implemented at the end of this month, so authorities need to be ready to meet the obligations it imposes.
The Act applies only to services contracts that are subject to the Public Contracts Regulations 2006 and not to works or supplies contracts, or those that fall outside of the regulations. Before undertaking any relevant procurement, the Act requires the contracting authority to consider:
● How what is proposed to be procured may improve the economic, social and environmental well-being of the area.
● How it may act with a view to securing that improvement in conducting the procurement process.
● Whether it needs to undertake any community consultation in the determination of the above two points.
While the Act aims to encourage the use of social, economic and environmental criteria, it is important for authorities to remember this needs to be done within the context of existing EU rules, which require competition to be on a fair and non-discriminatory basis. As such, the Act does not broaden the scope for authorities to use such criteria when they are unrelated to the specifications or criteria of the contract being procured, as such an approach would distort competition. This is reflected in the Act, which states the authority may only consider these factors where relevant and proportionate to do so.
Practically speaking, the most important aspect for authorities at this point is to ensure their own internal policies reflect the requirements of the Act, ensuring their continued compliance. The following are some suggestions authorities may wish to consider:
● Making amendments to your procurement polices, standing orders or contract procedural rules to include details of steps employees involved in a relevant procurement process should take to ensure they comply with the Act.
● Training for those employees undertaking relevant procurements on the requirements of the Act.
● The development of a social value policy, setting out the type of areas where social value criteria may be relevant.
● Making amendments to the mechanisms by which you may monitor the performance of any services provided by third parties to include social value factors.
● If you are a local authority, making amendments to the templates used to report on members decisions, ensuring that the requirements of the Act are a part of this process.
The above steps are designed to bring consideration of the social, economic and environmental factors to the front end of any procurement process as required by the Act. In an environment in which there is an increasing trend of policy and legislation aimed to support the ‘big society’ agenda and the inclusion of social enterprises, charities and SMEs in the market, such factors are bound to increase in prominence. A detailed procurement process can be used to ensure this is recognised.
☛ David Hansom is a partner and head of public sector at Veale Wasbrough Vizards
