Analysis: Will the 'social clause' revolutionise service delivery by the third sector?

The Public Services Bill is welcomed by chief executives body Acevo but considered by local authorities to be an extra burden. Kate Youde reports

Conservative MP Chris White (left) and Peter Holbrook
Conservative MP Chris White (left) and Peter Holbrook

Peter Holbrook, chief executive of the Social Enterprise Coalition, last week said that a proposed new law requiring bidders for public sector contracts to outline the social value they would provide was "one of the most important pieces of legislation for our sector in a generation".

The Public Services (Social Enterprise and Social Value) Bill, a private member's bill put forward by Conservative MP Chris White, will go to committee stage next year after receiving cross-party support earlier this month. If passed, public sector contracts would have to include provisions relating to social outcomes and values.

The bill, which was drafted with the help of the SEC and was strongly supported by the voluntary sector bidding consortium 3SC, would also require the government and local authorities to publish strategies relating to social enterprise.

The Local Government Association has not welcomed the measure. In a briefing to members, it said councils already supported social enterprises and there was no need for "a top-down imposition" on local government to promote them. It is also keen to avoid any extra burdens on local authorities.

During the bill's second reading in Parliament earlier this month, Nick Hurd, the Minister for Civil Society, said legislation would not impose an additional burden on contracting authorities. The government supported the bill's "core proposition", which would place a firmer requirement on commissioners to consider the potential to maximise the social, environmental and economic impact of money spent, he added. But he also said the government was "uncomfortable about legislating for strategies at both a national and a local level".

Sarah Kennedy, head of external affairs at Turning Point, which provides health and social care services, said the national strategy was not the most important part. "It is more the opportunity for social enterprise to be recognised for its ability to create social value and to be put on the same footing as any other business providing services," she said.

Ralph Michell, head of policy at the chief executives body Acevo, said: "If it goes through, it could really revolutionise how commissioning is done, to the benefit of our members and beneficiaries. The state would get more bang for its buck."

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