Hands up those of you who are aware of your Authority’s new obligations under the Social Value Act, which came into force on 1st January. Keep those hands up if you’ve seen (and read) the Cabinet Office’s guidance note on the Act, which was published at the end of December.
From the various conversations we have with Authorities, I’m guessing that there won’t be too many arms that are starting to ache. The Act seems to have crept in rather apologetically, overshadowed by the noise around the Finance Settlement, the NAO report on the financial sustainability of Authorities and, bizarrely, our Secretary of State’s opinions on Council Tax rises and 50 ways to save. With the latter it’s a bit like, for those old enough, ‘Vienna’ being beaten to the Number One spot by Joe Dolce’s ‘Shaddap you face’.
It’s one of those great rarities, an Act of Parliament that you can read and digest over a quick coffee. All it requires is that, when planning a procurement for services with a contract value over the OJEU threshold, the Authority ‘considers’ how what is proposed to be procured might improve the economic, social and environmental well-being of the relevant area (effectively the area covered by the local authority) and how it might secure that improvement through the procurement. It does not say how the Authority must do that or what evidence it must provide that it has done it.
When BDO ran a round table discussion on the draft Bill, as it was at the time, I expected the discussion to centre around how this would fit with the current drive to reduce cost and the inevitable pressure to go for lowest price in any procurement. I’d prepared my take on that, which is that there is no reason why price pressure and social value need to be mutually exclusive, but in the event, the main worry of the local government attendees was about compliance. Isn’t this just another box to tick and another opportunity for someone to challenge? So rather than encouraging creativity it will simply join the EU rules, FOI legislation and others in that growing bucket of reasons why authorities often end up considering risk, rather than opportunity, as the first and most important item on the agenda when planning a major procurement (and why the procurement of services where ‘people’ rather than ‘goods’ are key to success is often sub-optimal).
My fears were then heightened further when I attended a conference on the Act just before Christmas. One of the sessions was being led by a lawyer and I thought it was going to be a helpful guide for authorities on how they could evidence that they are complying with the Act. It actually turned out to be what I can only describe as an ‘ambulance chaser’ targeting private sector suppliers with a message along the lines of ‘authorities won’t comply with this, particularly in the first few months, so here’s how the Courts might interpret it and this is how you can launch a successful challenge’. I thought these people only existed in the world of personal injury, but no, beware – they’re coming to a town near you. They’ll have to work a bit harder on the dramatisations for the TV ads though.
Focusing on compliance tends to badge the Act as something that should be the concern of procurement officers. Actually, though, it is commissioners who should be really on the ball with this. The Act is about what you do before you commence procurement. If you’ve launched your OJEU it’s too late.
The Cabinet Office guidance is helpful as a starting point. If you’ve read the Act first, you might flick through it and feel it’s not telling you much. But don’t be tempted to put it down before you’ve read it all the way through. The really juicy bit is at the end, in the case study. It’s probably the subject for a whole new blog, so I won’t go into the detail of it, but what it does is raise the topic of whether it is best for authorities to specify outcomes (and let the contractors work out how best to deliver them) or to specify inputs and outputs, because the authority knows best how to deliver them. I know which I lean towards, and it’s not the same as the Cabinet Office.
If the Act does come to be viewed as a burden, it will be a great shame, because this is a piece of legislation that deserves its place in the sun.
Some authorities have really embraced it, and said that they will apply it to all procurements, not just those caught by the Act. Some have produced some great internal toolkits. But many are still not at first base.