I was in Truro recently for a conference on social value organised by the Cornwall Voluntary Sector Forum, on the subject of "putting the social value act to good use for the people of Cornwall". My preparations showed me just how difficult it is to use this new law to reform local commissioning practice.
Under the Public Services (Social Value) Act 2012, which came into effect last January, local councils and the new NHS bodies must consider how the procurement of public services can improve the wellbeing of their areas. This is a good idea at any time but makes especially good sense when budgets are being cut deeply. Commissioners must ask themselves: "If £1 is spent on providing services, can the same £1 also be used to produce a wider benefit to the community?"
Croydon Council in south London has led the way with its social value toolkit, which urges commissioners to "think social value" and to shift the focus from the bottom-line cost of a service towards the overall value of the outcomes delivered. This is common sense turned into strategy and it is reinforced by Croydon's recognition that "charities and social enterprises have elements of social value hard-wired into them, giving them a competitive advantage over private sector organisations when it comes to assessing the overall quality of bids".
The new legislation presses local public bodies to consult the voluntary sector about securing the best return from spending before any procurement begins. So in practice councils should talk to suppliers, community groups and advocacy organisations to find out what they want to see public expenditure achieving for the people they serve.
I can see how this approach might have prevented some of the waste we have seen with big social care and welfare-to-work contracts.
Why then do I think it's hard to use this new law? Paul Davies, who leads commissioning for Sunderland Council, gave me a run-down of what the social value act doesn't mean. The council doesn't have to do anything at all - it must simply consider whether procurement can improve wellbeing. The council doesn't need to consult the community ahead of a procurement - it has only to think about consulting. The act applies only to services - not to spending on goods or works. The council can ignore the act entirely if contracts are below the European threshold of about £174,000, which will exclude many local charity and social enterprise contracts.
Reforming local commissioning practice so that more charities have the chance to access public funds will depend on local advocacy. There has been good progress in applying the new law in Croydon and Cornwall because Croydon Voluntary Action and Cornwall Voluntary Sector Forum have led from the front. As we know from applying the Compact, best-value guidance and the public sector equality duty, local voluntary sector leaders must seize the tools available to them and put them to work if anything is to change.
Kevin Curley is a voluntary sector adviser