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Post-Carillion public procurement to evaluate 'social value'

26 June 2018 | By Neil Gerrard

David Lidington

Procurement of major state projects will have to consider "social value" where appropriate, as part of a commitment to improve trust in the delivery of public services post Carillion, a government minister has pledged.

Speaking to the Reform think tank in London yesterday, David Lidington, minister for the Cabinet Office, said the government needed to be a diverse marketplace of different suppliers which take into account wider social values as well as cost.

He also set out new measures to encourage and make it easier for small businesses, mutuals, charities, co-operatives and social enterprises to take on government contracts.

He said: "We want to see public services delivered with values at their heart, where the wider social benefits matter and are recognised. That means government doing more to create and nurture vibrant, healthy, innovative, competitive and diverse marketplaces of suppliers that include and encourage small businesses, mutuals, charities, co-operatives and social enterprises - and therefore harness the finest talent from across the public, private and voluntary sectors.

"That is why I can announce today that we will extend the requirements of the Social Value Act in central government to ensure all major procurements explicitly evaluate social value where appropriate, rather than just ‘consider’ it.

"By doing so, we will ensure that contracts are awarded on the basis of more than just value for money - but a company’s values too, so that their actions in society are rightly recognised and rewarded."

2013 Social Value Act

The 2013 Social Value Act aims to level the playing field for mutuals, co-operatives and social enterprises bidding to win government contracts.

Lidington said the government would also use its purchasing power to challenge its major suppliers to do better on equality and diversity.

Calling on industry to put right past failings, he added: "If we are to build a fairer society, in which the public has greater trust in businesses not just to make a profit, but also to play a responsible role in society, then we must use the power of the public sector to lead the way.

"We will now develop proposals for government’s biggest suppliers to publish data and provide action plans for how they plan to address key social issues and disparities - such as ethnic minority representation, gender pay, and what they are doing to tackle the scourge of modern slavery."

He also announced further measures, including requiring key suppliers to develop ‘living wills’ which will allow contingency plans to be rapidly put into place if needed, increased transparency for major contracts by publishing key performance indicators, improved training for government procurers, and enhanced measures to protect suppliers from cyber attacks.

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