Can the new Social Value Act help communities?

A recently passed law, the Public Services (Social Value) Act 2012, should mean that local councils have to consider the ‘social value’ that outside contractors can offer, rather than just the cheapest deal. Claudia Cahalane asks Peter Holbrook, head of umbrella group Social Enterprise UK, to explain the Act.

Positive News: How will the act help communities?

Peter Holbrook: For the first time, public bodies including local authorities, NHS Trusts, rescue services and housing associations will be required to consider how the services they buy in and commission might benefit an area not just economically, but a community’s social and environmental ‘wellbeing’ too. It’s about looking beyond the price of a contract and looking at what the collective benefit to a community is when a public body awards a piece of work to a provider.

What happens now?

It’s early days; the bill was only passed in March and will probably come into force early next year. The next step is for the legislation to be implemented and for local authorities to understand what it means and how they can put it into practice on the ground at community level.

Do you see any good examples of councils already taking social value into account?

Last year, the London Borough of Waltham Forest was looking to re-tender a seven year contract for the provision of transport services. The contract was won by HCT Group, a social enterprise that was founded in 1982 in Hackney, and now runs transport services across the UK and Channel Islands.

As a social enterprise, providing community value is central to how HCT Group operates. Their focus is on helping the most marginalised people to access transport services and on creating employment opportunities for people furthest from the labour market.

The fact that Waltham Forest’s contract included a scored question about ‘added value’ gave HCT Group the space to set out the additional social impact of their approach. They explained that any profits they made on the contract would be re-invested into a learning centre that would provide training for long-term unemployed people in the borough.

Commissioners in Jersey recently announced HCT Group as the preferred tenderer to run the island’s bus services. It’s a real sign that commissioners want more from their contracts.

How can good businesses really benefit from this? 

They need to think about how they measure and prove their social value, and they should get in touch with the public bodies they want to work with, tell them about the act and how they can bring about social value in their community.