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  • Social value is nothing new, although there has been an increased interest in the UK due to the Social Value Act 2012.
  • Birmingham City Council’s approach to implementing social value in commissioning and procurement – good example of strategic leadership and provision of tools to achieve social value in individual contracts.Risk adverse and process driven nature of procurement - In order to break this down in all areas of procurement, but particularly when considering social value, it is necessary that there is strong leadership from the top. If the council leader or mayor demands social value is included, this provides protection for individual procurement officers and can make them less risk adverse.In order to comply with EU procurement rules, any social value requirements have to relate to a contracting authorities own strategies and policies. By setting out social value priorities, as Birmingham and some other UK councils have done, this requirement is covered.Somecouncil’s, including Birmingham, are requiring contractors to pay the living wage, which is higher than the legally mandated living wage. This is permissible under EU procurement law, but only for those employees working directly on a contract. Authorities cannot insist that a business pays all its staff the living wage.
  • Procurement rules have always allowed social value to be taken into account. European Commission 2010 guidance, “Buying Social: A guide to Taking Account of Social Considerations in Public Procurement”, covers the promotion of employment opportunities, social and labour rights, social inclusion, ethical trade issues, corporate social responsibility and promoting Small to Medium sized businesses.The commission intended this guidance to highlight the contribution public procurement can make to stimulate greater social inclusion”So, why have we not seen more social value commissioning. I believe it is due to the complexity of procurement rules. People are unsure what they can and can’t do. Also short term savings being prioritised over long term value.One of the areas that is very clear in procurement rules is the principle of non discrimination against bidders from other member states. However, growing the local economy is a priority for many local authorities.
  • The principle purpose of the Directives remains that of opening up procurement markets to competition across the EU, but the new rules have also ben revised and modernised “in order to:-increase the efficiency of public spending, facilitating in particular the participation of small and medium-sized enterprises in public procurement and to enable procurers to make better use of public procurement in support of common societal goals (Recital 2)The new rules now clearly state that award criteria can include social and environmental characteristics. Contracting authorities may exclude a tenderer who does not comply with certain social and environmental laws.There has also been removal of the distinction between Part A and Part B services and the introduction of a new “light touch” regime for health, social and related services. Again, changes here are not radical, because Part B services were effectively light touch anyway. But it could help social purpose organisations and the creation of social value in a number of ways:National rules have to be developed by each country for light touch services. There is the opportunity for this to lead to a simple, proportionate process. National rules could include not using price only to evaluate tenders and a requirement to consider social value. However, if requirements are not clear, public bodies could go back to following the full rules, as often happened with Part B services.The other benefit of the “light touch regime” is that the threshold is raised to 750,000 Euros. It then provides greater clarity that any contracts below this threshold will sit outside of the European Procurement Directives. This removes the fear of breaking the EU rules and may provide the space for procurement to become less risk adverse and more creative. It could lead to better dialogue with social purpose organisations and more innovative solutions to social problems.Other requirements of the new Directives that are aimed at helping small organisations win contracts, and therefore should be beneficial to social purpose organisations include:Large contracts must be dividedinto separate lots. If not, then this has to be justified. This could help stem the move to larger and larger contracts, which are often seen to be more efficient, but can exclude small and local bidders. Public bodies cannot require the minimum turnover of organisations to exceed two times the estimated contract value. But we feel more needs to be done to stop discrimination against not for profit organisations in financial evaluation.Clarification has been provided that contracting authorities may consult with service providers before going out to tender. We need more of this and it to be done better. And when considering social value, consultation needs to include wider communities.Finally, reserved contracts, for organisations whose main aim is the employment of disabled or disadvantaged persons. These contracts can now be awarded where 30% of the workforce is disabled or disadvantaged. Previously it was 50%.

Eu procurement workshop Eu procurement workshop Presentation Transcript

  • 20/05/2014 120/05/2014 1NAVCA Maximising opportunities for social value creation in the context of EU procurement rules Rachel Rhodes Policy and Research Officer
  • 20/05/2014 220/05/2014 2NAVCA Overview • UK implementation of social value • What the procurement rules do and do not allow • The new EU Procurement Directives • Complexity and challenge • Lessons learnt • French example: presentation of the social/ disability clauses • Questions • Discussion: sharing learning, moving forward
  • 20/05/2014 320/05/2014 3NAVCA So what is social value? • A way for public bodies to achieve wider policy objectives through their purchasing power. • Additional outcomes/benefits that are not directly related to the original intention of the service. These outcomes benefit the wider community.
  • 20/05/2014 420/05/2014 4NAVCA Birmingham Council • Clear political commitment to social value through Cabinet backing, social value aligned to the leader’s policy statement and tools such as the Business Charter for Social Responsibility to provide instruments for securing value. • Future commissioning and contracting decisions will take account of the principles of the charter and it will form part of the terms of new contracts • Examples include: a requirement to pay living wage, support the local economy by choosing suppliers and sub-contractors close to point of delivery, Provide support to third sector organisations and work with third sector organisations to deliver services and contracts http://www.finditinbirmingham.com/feature/charter
  • 20/05/2014 520/05/2014 5NAVCA Procurement Rules • Procurement rules have always allowed social value to be taken into account • But do not allow anything that will discriminate against bidders from other member states – contracts cannot be reserved for bidders from a certain area or a certain sector. • Part B contracts – UK has tended not to apply different processes for Part B services. Have moved away from grants and reserved contracts
  • 20/05/2014 620/05/2014 6NAVCA The new EU Procurement Directives • Increased focus on achieving wider policy objectives through procurement , but no dramatic changes • Stress the types of services not covered by the Directives and introduce the “light touch” regime for health, social and community services • Remind us that procurement rules regulate ‘how’ goods and services are procured, not ‘what’ is procured. It is for contracting authorities to decide what they value.
  • 20/05/2014 720/05/2014 7NAVCA Complexity and challenge • Risk adversity • Short term cost versus long term savings • Silo working • Supporting the local economy without breaking the principle of non discrimination to other states • Measurement and evaluation – for both providers and commissioners. Evidencing ‘what works’. • Making the new “light touch” regime work
  • 20/05/2014 820/05/2014 8NAVCA Lessons learnt • Strong political leadership is needed to embed across commissioning and procurement. • Corporate wide social value policies and strategies should be adopted. • Communities and social purpose organisations need to be more involved in creating solutions. • Measurement and evaluation continues to be complex and confusing.
  • 20/05/2014 920/05/2014 9NAVCA French example
  • 20/05/2014 1020/05/2014 10NAVCA Questions?
  • 20/05/2014 1120/05/2014 11NAVCA Discussion topics • What are the main challenges and barriers to achieving social value:- 1. Because of the EU Procurement rules 2. At a local/national level • What can contracting authorities do to overcome these barriers? • What do voluntary sector and social purpose organisations need to do?
  • 20/05/2014 1220/05/2014 12NAVCA Find further resources on social value at www.navca.org.uk/socialvalue Contact policy@navca.org.uk