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Government plan to have social aims in contracts

By Nathalie Thomas, Third Sector, 4 July 2007

The Government is looking into how public sector bodies can be encouraged to prioritise social outcomes above profitability when they enter into contracts.

The Office of the Third Sector is researching how social clauses can be added to all types of public contract, from those governing public construction work to those for social care services.

Ed Miliband announced the research programme during his final speech as third sector minister last week. "We are embarking on a programme to allow more use of social contracts," he said at a conference in London. "In a way, it's a much more sensible way of doing commissioning."

Third sector leaders organisation Acevo is pushing social clauses. "Social clauses are things you can add to tendering specifications saying that you're going to favour bidders for whatever contracts are going to have benefits for the community, as opposed to being cheaper or higher quality," said Nick Aldridge, its deputy chief executive.

Social clauses would lead to contracts benefiting local communities, and would also play to the advantage of many charities and social enterprises, he said. "You might have a social enterprise that wants to employ local people and train them up going for a construction contract," he added. "That would obviously benefit a local area, much more than if it brought the workers in from somewhere else."

Aldridge said he believed social contracts would be permissible under EU law, despite the doubts of some. "The reason people think they're not allowed is that they think European law says you can consider only price and quality," he said. "European regulations say you have to pick the most economically advantageous supplier, but that concept can include social benefits."