The Conservative MP behind the social value act has criticised the government for "locking out" charities and social enterprises from winning key government contracts.
In an adjournment debate in Westminster Hall yesterday, Chris White MP, who tabled the private members bill that led to the Public Services (Social Value) Act 2012, said that the large size of many government contracts prevented smaller organisations from bidding for them.
White’s bill, which became law in March, places a duty on local and national government to consider the social good offered by bidders during public service procurement exercises in addition to monetary value.
White said: "The size of many contracts is a problem. I appreciate that commissioning on a large scale can create efficient economies of scale, but those are not the only economies that we should be focusing on; the most useful economy is secured through successful outcomes. Large contracts do not always lead to better outcomes, and can increase costs in the long term."
He used the example of the UK Border Agency that issued £1.7bn in contracts for asylum-seeker services in March, but added that each of the contracts "was for more than £100m, completely locking out our charities, social enterprises and small businesses".
He also criticised the way contracts had been awarded for the Work Programme, the government’s employment scheme, pointing out that a quarter of the £3.3bn of contracts went to one company. "That is not the opening up of public services," said White. "Only a handful of organisations can bid for contracts of such size. More accessible contract sizes would go a long way to change the situation, as well as enabling a larger degree of social value, as such contracts are able to target additional benefits to be created through the commissioning process."
White added that many private companies involved in the delivery of public sector contracts were not open about the way that they operate. "If I or my constituents have questions about state-delivered public services, we may ask questions in this place or through correspondence with departments to get the appropriate answer. Private companies, however, are often not so willing or forthcoming with information, leaving a sense of unease among the public."
He said that he supported government efforts to provide details on public spending of more than £100,000 at both central and local government level.
Sajid Javid, the Economic Secretary to the Treasury, said during the debate that the government had put in place measures to open up government contracts to smaller organisations. He said that every government department had nominated a small and medium-sized enterprises minister responsible for delivering a procurement action plan for their department and, as a result, "more than 2,000 of the 5,700 contracts awarded through the government’s contracts-finder website have been allocated to SMEs".