A Social Value Breakthrough?


Our Public Affairs Manager, James Butler, delves into how a new procurement note could have a big impact on how social value is delivered.

PPN 11/16 may not have been on your Christmas/New Year’s reading list. But if you’re into social value it should’ve been. Bear with me on this one. The procurement note is a measure to make British-made steel a bit more competitive, by allowing public authorities to take into account the true value of British manufactured steel.

Keener social value watchers will already have spotted that we’ve here before. Of course!  PPN 16/15 allowed public authorities to take into account the true value of British-made steel.

What’s changed? And what has British manufactured steel got to do with social enterprises?

The answer to both questions is “a great deal.”

Most obviously, PPN 16/15 had a £10m threshold above which the procurement note applied. This threshold has now been abolished, replaced with the self-defined “major project” criteria. This makes a lot of sense. The £10m threshold always seemed an arbitrary measure.

So if you are a public authority undertaking a “major project” involving steel, you now have to take into account social, environmental and economic considerations. Such considerations include the value of British jobs and the environmental impact of shipping steel half way around the world when it can be manufactured a few hundred miles away. But a public authority could include more considerations that may favour social enterprise – granted, these may be slightly unlikely in the context of steel manufacturing.

Here’s where the other change from PPN 16/15 is so important. Brexit might mean Brexit, but steel doesn’t mean just steel, it now means “material” – that could be concrete, aluminium, etc. In practice, it looks like the Government has extended the Social Value Act to cover goods and works where they are deemed to be part of “major projects”.

This comes on top of draft guidance on the Bus Services Bill which suggests that social value should be extended to the commissioning of bus franchises (which oddly are considered utilities).

So over the past few months we’ve seen the extension of the Social Value Act to goods, works services and utilities - key SEUK and Social Economy Alliance asks. Social Enterprise UK is never shy of criticising Government when it gets things wrong; we also are quick to praise them when they get it right. Here, they’ve got it right. It could be HUGE.

And it’s along the lines of something we suggested to Government, privately, earlier this year. Perhaps great minds think alike; or perhaps someone somewhere in Government is listening. The mystery is why Government chose to publish the PPN quietly in the run up to Christmas rather than make more a fanfare about it.

Where do we go from here?

It would have been neater (if not necessarily easier) to amend primary legislation. In the medium term we probably do still need to see the SVA amended to provide clarity to what is a slightly messy situation. Guidance says one thing; statute says another and ultimately, as Procuring for Good seems to demonstrate, being instructed to do something by primary legislation is the key driver for cash strapped public authorities.

I imagine there are a fair few people in public authorities now scratching their heads about how to incorporate social value into commissioning. In the absence of legislative clarity there is quite lot of best practice information available notably on the Government’s own pages, the Social Value Hub,  at the Social Value Summit, or at one of our training sessions for commissioners. In the meantime, public sector commissioners have the green light from Government in the form of a PPN to go ahead and apply social value in many more situations than they previously thought possible.

It’s a positive start to 2017.


SEUK's political work is supported by CAN, Fusion 21, and First Ark Group