An overview of the social value act. Presented by Julie Prior (Assistant Head of Law & Governance at Sunderland City Council) at #socialvalueNE on Friday 26 April 2013.

1. Social Value Event
Sunderland Software Centre
Friday 26th
April

2. 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

3. Sunderland City Council : Doing Business with the Council
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?

4. Sunderland City Council : Doing Business with the Council
• 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?

5. Sunderland City Council : Doing Business with the Council
• 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)

6. Sunderland City Council : Doing Business with the Council
• 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?

7. Sunderland City Council : Doing Business with the Council
• 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?

8. Sunderland City Council : Doing Business with the Council
• 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

9. Sunderland City Council : Doing Business with the Council
• 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?

10. Sunderland City Council : Doing Business with the Council
“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?

11. Sunderland City Council : Doing Business with the Council
• 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?

12. Sunderland City Council : Doing Business with the Council
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?

13. Sunderland City Council : Doing Business with the Council
• 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

14. Sunderland City Council : Doing Business with the Council
"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 Addington
Liberal Democrat Deputy Chief Whip
What will be the impact of the
Act?

15. Sunderland City Council : Doing Business with the Council
Procurement and Social Value
Paul Davies, Head of Corporate Assurance and Procurement
paul.davies@sunderland.gov.uk

16. Sunderland City Council : Doing Business with the Council
• 3rd
Party Spend
• Arrangements in Place
• Examples in Practice
• Future

17. Third Party Spend by Location
Sunderland City Council : Doing Business with the Council
3rd
Party Spend - 2012/13

18. Sunderland City Council : Doing Business with the Council
• Policy position (quality, price, social value)
• Supplier Charter
• Supplier Engagement Group
• Dedicated Market Engagement Team
• Thresholds (all quotes via Corporate Procurement)
Arrangements in Place

19. Sunderland City Council : Doing Business with the Council
• Buy Sunderland First
• Scoping Reports
• Supplier engagement events
• Streamlined PQQ documentation / process
• Links with Business Investment Team
Arrangements in Place

20. Sunderland City Council : Doing Business with the Council
Required bidders to submit a Method Statement (scored) relating to
how 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

21. Sunderland City Council : Doing Business with the Council
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 the
Council. The Contractor shall use all reasonable endeavours to recruit new
employees from these recruitment agencies.
“The Contractor shall use all reasonable endeavours to provide supply chain
opportunities to small businesses within the Employer’s area.”
New Wear Bridge

22. Sunderland City Council : Doing Business with the Council
• 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)

23. Sunderland City Council : Doing Business with the Council
Any Questions?