The social value act should be made compulsory for all commissioners, according to a new report from the community business body Power to Change.
The report, which was released this week and is called Community Business and the Social Value Act, considers how the act has affected community businesses since it came into law four years ago.
The recommendation to make the act compulsory for commissioners is among four suggestions in the report for reforming the act.
It also says the act should be extended beyond services to include goods and works, and the current £170,000 threshold should be lowered so the legislation applies to lower-value contracts.
Earlier this year, the government announced that it would carry out another review of the legislation, having reviewed the act in 2015.
The report, which was produced by independent researchers for Power to Change, also calls for more support, guidance and monitoring to accompany the act.
The report highlights four barriers that prevent the legislation from becoming more effective: budget cuts affecting commissioners, risk-averse councils, procurement practices and insufficient mechanisms for supporting or monitoring the act.
A lack of expertise among smaller charities, the impact of austerity on councils, increasing numbers of larger contracts and rigid procurement processes are also cited in the report as barriers to charities and social enterprises bidding for public sector contracts.
Measuring social value is highlighted as a significant issue in the report, especially in how it is defined and the lack of relevant expertise in some voluntary organisations.
The report says that more guidance is required on how to approach measurement of social value as well as more guidance and training from local and central government.
In a blog post announcing the new report, Ailbhe McNabola, head of research and policy at Power to Change, said: "The community businesses with which we spoke were universally positive about the aims and principles of the social value act, but views on the act itself were much more mixed.
"Some saw it as tokenistic, with little practical impact on how councils commissioned or from whom, but for some the commissioning landscape would be much bleaker without the act to nudge councils into considering social value.
"The social value act has done little if anything to influence community businesses in tendering for local contracts, however. Those that looked to work with local authorities said they would have done so whether the act was there or not."