Legal overview & social value act in practice

Social Value Event

Sunderland Software Centre

Friday 26th April

http://www.fsb.org.uk/default.aspx

Sunderland City Council : Doing Business with the Council

What is the Public Services (Social

Value) Act 2012 (and What is it Not?)

Julie Prior – Law and Governance


Public Services (Social Value) Act 2012

• Private members bill initiated by Chris White MP

• Received broad cross party support

• Became law on 8th March 2012

• Came fully into force on 31 January 2013

• Applies to contracting authorities when procuring public service contracts

What is the Act?


• Defined in Regulation 3 Public Contract Regulations 2006

• Includes:-− local authorities (and companies they control)− central government bodies− fire and police authorities− NHS trusts− schools and academies

What is a Contracting Authority?


• A written contract or framework agreement for consideration (usually money) under which a Authority engages a person to provide services

• mix of goods and services - covered if value of

services more than goods

• mix of works and services - covered if works are incidental to the services

What is a Public Service Contract?(Defined in Public Contracts (Regulations) 2006)


• The Authority must consider-

− how what is proposed to be procured might improve the economic, social and environmental well-being of the relevant area, and

− how, in conducting the process of procurement, it might act to secure that improvement.

What new obligations are the Authority subject to under the Act?


• Before starting a procurement process, e.g

− before publishing OJEU− before publishing an advert seeking offer− before contacting any person to seek an offer− before responding to an unsolicited offer or− before entering into a contract/framework

• This is because once the procurement process has commenced the opportunity is missed

When does duty apply?


• This is limited to

− matters relevant to what is proposed to be procured only;

− to the extent which it is proportionate in all the circumstances to take those matters into account.

Obligation to consider how Authority might act to secure improvement


• The Authority must consider whether to undertake any consultation as to what social, economic and environmental improvement can be secured through the procurement process

• Duty to consider consultation not a duty to consult

Duty to Consult?


“One of the key provisions of the Act is to ask public bodies to consider consultation when seeking to define what social value could be in the contracts they are designing. I hope all public bodies will see this as a duty to consult and civil society organisations should lobby hard to ensure that public bodies use the expertise and knowledge of the third sector when putting the Bill into action.” Chris White MP

Duty to Consult?


• All contracting authorities will have to consider the relevance of social, economic and environmental requirements when a contract for services is commissioned

• It opens door for consultation and engagement with the relevant sector

What does it mean?


1. A requirement to consider these things in relation to contracts for supplies or works

2. A requirement to implement social, environmental or economic requirements into every service contract

3. A requirement to consult in every case

4. An opportunity to override EU treaty principles and legislation

What is it not?


• Require authorities to treat Bidders in a non-discriminatory way

− cannot discriminate in favour of local providers

− cannot require a local office at the time of bidding

− but can include contract conditions to encourage use of local labour and supply chain incentives

EU Treaty Principles


"The Bill constitutes a good idea that has been given a few teeth. Whether those teeth are sharp enough, or the jaw that contains them is strong enough, we do not yet know. However, the Bill is a good start. We should see it as part of an ongoing process as opposed to an end in itself.“

Lord AddingtonLiberal Democrat Deputy Chief Whip

What will be the impact of the Act?


Procurement and Social Value

Paul Davies, Head of Corporate Assurance and Procurement

[email protected]

mailto:[email protected]


• 3rd Party Spend

• Arrangements in Place

• Examples in Practice

• Future

Third Party Spend by Location


3rd Party Spend - 2012/13


• Policy position (quality, price, social value)

• Supplier Charter

• Supplier Engagement Group

• Dedicated Market Engagement Team

• Thresholds (all quotes via Corporate Procurement)

Arrangements in Place


• Buy Sunderland First

• Scoping Reports

• Supplier engagement events

• Streamlined PQQ documentation / process

• Links with Business Investment Team

Arrangements in Place


Required bidders to submit a Method Statement (scored) relating tohow they would target recruitment (inc. unemployed / NEET’s)

Outcomes:

Total of 341 additional staff employed

186 previously were unemployed for 6 months+ / NEET

Care and Support


Required bidders to submit a Social & Economic Benefit Plan(scored) which includes:

• Use of local subcontractors & supply chain opportunities for SME’s• Recruitment of NEET’s and long term unemployed• Employ or provide work based training opportunities and apprenticeships

“The Contractor is required to notify every vacancy, including those with sub-contractors, to recruitment agencies as agreed in writing from time to time by theCouncil. The Contractor shall use all reasonable endeavours to recruit newemployees from these recruitment agencies.

“The Contractor shall use all reasonable endeavours to provide supply chainopportunities to small businesses within the Employer’s area.”

New Wear Bridge


• Social Value considered for all contract opportunities over £5,000 (proportionate) – not just economic

• Engagement with representative bodies at scoping stage to identify opportunities / discuss approach / barriers

• Increased use of Social Value benefits, terms & conditions and evaluation criteria

• Opportunities to secure Social Value covered as part of ongoing relationship

Future (Sunderland)


Any Questions?

Legal overview & social value act in practice

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