A law that comes into force today to help social enterprises and charities win government contracts needs to be strengthened, according to Social Enterprise UK, the umbrella body for social enterprises.
The Public Services (Social Value) Act 2012 was passed in February last year and comes into effect today.
It requires commissioners of public services to take into account "economic, social and environmental wellbeing" when seeking to purchase services from suppliers. The act applies only to central government and NHS contracts worth more than £113,057 and local government contracts worth more than £173,934. It will apply to contracts for goods and services, but not to contracts for goods.
The act will affect all public bodies in England, including local authorities, government departments, NHS bodies and housing associations. All organisations in Wales will be affected, except those with devolved powers. The act does not apply in Scotland.
Peter Holbrook, chief executive of SEUK, said: "The social value act has the potential to create a more level playing field for social enterprises and charities.
"This law, if strengthened, has the power to improve standards across the board because private companies will also come under pressure to deliver social value."
But SEUK believes public bodies should be obliged to include and account for social value in their commissioning and procurement activities rather than just consider it. SEUK has also called for the act to apply to contracts of goods as well as services, and for all monetary values, and for statutory guidance to be drawn up.
The law was introduced by a private member’s bill drawn up by Chris White, Conservative MP for Warwick and Leamington. "I believe that this could lead to more charities, social enterprises and socially responsible businesses delivering public services," said White.
Nick Hurd, the Minister for Civil Society, said: "As taxpayers, we should all want those buying services on our behalf to get as much value as possible.He said the act was "an important step in encouraging public sector commissioners to think harder about maximising value to communities" and that it would help the government’s goal of making it easier for social enterprises to deliver public services".