The government’s new social value procurement requirements should be extended into the wider public sector, including among councils and NHS organisations, charity sector body the National Association for Voluntary and Community Action (NAVCA) is urging.

Last week the government announced that its public spending ‘must back British jobs and skills in every postcode’, with a new weighting given to providers that support local communities.

The government says the move will help “innovative business and civil society organisations” who often “find themselves locked out of contracts” to “showcase their innovation and the benefits they are already delivering in communities”.

Under the changes, the score for bringing benefits to the local community will be raised from 10% to 20% for contracts worth £5m or more.

Also the threshold for "red tap and burdensome requirements" has been raised to contracts of £1m or more said the government.

While welcoming the government’s “intention to simplify social value requirements in procurement” as a “positive step”, NAVCA would like to see the changes “extend beyond central government” to cover councils and health systems.

This is needed as local authorities and NHS organisations “are among the largest commissioners working with the VCSE sector”, said the body, which represents local charity infrastructure organisations.

Under the government’s changes NAVCA is concerned that “suggesting” local commissioners “may adopt these approaches does not go far enough”.

In its response NAVCA added: “To unlock the full potential of the sector, we need a broader shift in how charities and social enterprises are viewed across all levels of government, recognising the inherent social value they bring through responding to local need, building relationships, and strengthening communities.

“We look forward to seeing the full guidance in the autumn and will continue to advocate for these principles to be embedded across both local and central government.

Concerns over £1m threshold

Another civil society organisation to cautiously welcome the changes is Social Enterprise UK.

It said the central government procurement changes is “another important step” for social enterprises, but raises concerns around the £1m threshold for much of the red tape around contracting.

“Raising it is framed as cutting red tape for small businesses, and easier routes for social enterprises bidding directly are welcome,” said Social Enterprise UK.

“But it also means social value requirements simply stop applying below that level – a tier where many social enterprises compete. A rule meant to open the door for small suppliers shouldn’t quietly remove the lever that makes buyers choose them.”

In announcing the procurement changes Cabinet Office minister and first secretary of state Louise Hayes said: “Every pound of taxpayer money should be spent in a way that benefits local communities - creating good jobs and giving young people the skills they need for the future.

“For too long, securing government contracts has been a tick box exercise that fails to deliver the positive change that people feel in their pocket and see in the places they live.

“We are doing things differently. These new rules will ensure the £90 billion that is spent each year through government contracts supports British jobs, skills and people in every postcode.

Among charities to welcome the rule changes is education, employment and social care services provider Catch22.

Its chief officer for impact and growth Andy Canniford said the charity “is encouraged to see the government’s recognition of civil society expertise, innovation, and local partnership by a fairer process for the voluntary sector in public procurement processes”.

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