Lawyer accuses public sector of ignoring 'social value' of charities in contract awards

Julian Blake says authorities can use factors beyond price and quality to choose suppliers but mostly fail to do so

Julian Blake
Julian Blake

A leading charity lawyer has accused public sector commissioners of failing to recognise the social value of charities when awarding contracts.

Julian Blake, joint head of the charity and social enterprise department at law firm Bates Wells & Braithwaite, said it was "perfectly legitimate" for commissioners to choose service providers based on such grounds, as well as price and quality.

But in an article on the company’s website, he said this rarely happened because contracting bodies were too concerned about breaking laws on distorting competition and state aid.

Blake said commissioners displayed "excessive caution" when awarding contracts, and failed to take into account the social value of charities and social enterprises.

He referred to a European Commission guide from 2011, Buying Social, which promotes social enterprises in procurement, as an example of existing guidance on the issue.

 "There is much rhetoric across the reorganisation of public services about social enterprise, and more specifically mutuals, the presumption being that there is something essentially beneficial about the nature of the public or community benefit service provider," Blake told Third Sector.

"That is not, however, the way in which the services are procured."

A more open tendering process involving consideration of social value as well as price and quality would see more contracts handed to charities and social enterprises, he said.

It would also encourage private sector providers to demonstrate how they would produce public benefit.

Blake said the Public Services (Social Value) Act 2012, which requires local authorities "to give greater consideration to economic, social or environmental wellbeing" when tendering for contracts, might prove helpful.

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