Social value-led procurement driving higher economic growth, says report

A new report, Front and Centre: Putting Social Value at the Heart of Inclusive Growth, launched by Social Enterprise UK, has found that local councils are increasingly using procurement as a way to drive higher economic growth. 

The report calls on central government, local councils and other public bodies to do more to utilise social value, putting it front and centre of decision making. Based on in-depth research across local government, the report shows a growing use of social value – making spending decisions not just on financial cost but on the economic, social and environmental impact. 

82% of local councils believe that spending public money focusing on social value, rather than just focusing on the cheapest product, generates higher levels of growth. Sunderland, one of the case studies referenced in the report, was one of the fastest growing cities in the UK in 2018. Two-fifths of councils also believe that a social value approach can reduce inequalities. 

With the benefits of social value and using public money strategically increasingly recognised by local councils, the research calls on more to be done to embed social value into all aspects of decision making, using it as a driver of inclusive growth. The report also asks for more support to be given to local councils to measure and report on the value that they are creating, so that there is a consistent pressure to drive better performance. 

The report calls on central government to change the law so that it catches up with best practice and spreads the benefits of social value across the country. This could be done quickly by extending the Public Services (Social Value) Act, a law passed by the coalition government in 2012. The research was supported by the independent trust, Power to Change, Cordant Group, Engie, and the Lloyds Bank Foundation. 

Commenting on the report, Peter Holbrook chief executive of Social Enterprise UK said: “Necessity is the mother of invention, and the squeeze on public resources that austerity caused has forced everyone to think differently. What we have seen in many parts of the country is strong leaders utilising every tool to boost local economies and spread growth across communities. Social value has been critical to this change, creating new jobs and new opportunities. It is having transformative results on the ground. Now that we have proven that social value works, we must place it front and centre in the way that we run our economy.”

Ailbhe McNabola, head of research and policy at Power to Change, who co-funded the report, said: “We have seen an increase in awareness of the Social Value Act with more and more public bodies realising that social value can drive growth at a local level. What we need now is a recognition that social value can be a vital tool in working with communities to deliver services that address local challenges.” 

Jamie Quinn, director of responsible business at Engie, said: “Every sector has a role to play in driving this agenda forward and the role of businesses is key. Social value has the potential to create new relationships between the public, private and social sectors resulting in stronger communities and better living and working environments for the people and places that we work with.”

Click here to download the report, Front and Centre: Putting Social Value at the Heart of Inclusive Growth.

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