Social value act will apply only above certain contract value thresholds

EU procurement rules mean the new legislation will apply to central government and NHS contracts worth more than £113,057 and local authority contracts worth more than £173,934

EU: procurement rules affect act
EU: procurement rules affect act

The social value act, which is designed to make it easier for charities to win public sector contracts, will apply only to procurement exercises worth more than £113,000 if awarded by central government and the NHS and £173,000 if awarded by local councils, it has emerged.

The Public Services (Social Value) Act 2012, which comes into force in January, will allow local and national government to consider the social good offered by bidders during procurement exercises in addition to monetary value.

The legislation, which was introduced through a private member’s bill from the Conservative MP Chris White, is intended to give charities a better chance of winning contracts.

But EU procurement rules mean that the legislation will apply only to contracts above a certain threshold, depending on the organisation issuing the contract, a spokeswoman for the Cabinet Office said.

She said there were two thresholds: £113,057 for services contracts awarded by central government and the NHS and £173,934 for all other contract bids.

"The act, when it comes into force, will apply to public services contracts whose value exceeds the relevant financial thresholds in the EU Directives and Public Contracts Regulations," she said.

Charlotte Ravenscroft, policy manager at the National Council for Voluntary Organisations, said: "We are talking to the Cabinet Office and asking it to frame guidance that will mean the act applies equally to all levels of commissioning.

"We are hopeful the act will not be limited by the threshold and we want to see more organisations being able to deliver public services.

"There is the potential that some organisations could miss out because of this but we are hopeful the act will be applied across all commissioners in local and national government," she said.

The NCVO said it was helping its members to demonstrate their social value ahead of applying for contracts using the act next year.

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