Pioneers Post

UK social enterprises triumphant as Lords pass the Social Value Bill

28 February 2012
Photo of Chris White MP

Chris White MP, in the House of Commons

We expect this legislation to put the brakes on firms who want to cream excessive profits from taxpayers’ money.

Social Enterprise UK CEO Peter Holbrook

A member of parliament’s 20-month crusade to inject social value into the way public services are commissioned triumphed today as his Private Member’s Bill was passed by the House of Lords.

Chris White’s Bill, which will now become law, asks public bodies to consider how they might use public service contracts to improve the economic, social and environmental well-being of our communities.

In a statement after the day’s successful session in the Lords, the MP for Warwick and Leamington said the process had been long but ‘worth the effort, as it will help thousands of community organisations, charities and social enterprises to win and deliver public service contracts’.

White added: ‘The Bill will, I hope, help to start a culture change in the public sector and ensure that we consider the full value of the services that we use, utilise the best that civil society has to offer and maximise the use of public money.’

The Bill was sponsored in Lords by Liberal Democrat Peer Lord Newby, and after a formal third reading this afternoon, was unanimously passed. It will now become the Public Services (Social Value) Act 2010-2012, once it has received Royal Assent.

The Bill has received support across the political spectrum and has been supported by organisations such as Social Enterprise UK, the National Council for Voluntary Organisations, the National Association for Voluntary and Community Action and the Association of Chief Executives of Voluntary Organisations.  

Social Enterprise UK said the new law could ‘kickstart responsible capitalism’. Its CEO, Peter Holbrook, said that when public money went to private sector providers of services it was ‘leaking out of our economy into wealthy pockets’.

‘Our taxes shouldn’t be a vehicle for the upward redistribution of wealth,’ Holbrook said. ‘We expect this legislation to put the brakes on firms who want to cream excessive profits from taxpayers’ money.’

The Government’s annual spend on commissioning and procurement is £236bn billion, and some 11% of government contracts are currently delivered by social enterprises and charities.

‘As a result of this law, public bodies will be the first to showcase what responsible capitalism really looks like,’ Holbrook added. ‘They will have the freedom and authority to commission based on what else a provider can offer society, as well as competing on price and quality.’

Holbrook added that without the legislation, the market would remain ‘skewed in favour of larger private firms’. He claimed this had occurred with the Work Programme, where few social enterprises and charities were commissioned ‘despite them having a strong track record’.

Lord Newby said the challenge now was to ensure that the change in procurement happened in practice.

Jon Trickett, Shadow Minister for the Cabinet Office, said: ‘I hope that this is just the start of social value being introduced throughout all government commissioning, and I urge the government to set out a clear national social enterprise strategy as an important next step.

‘By asking public sector bodies to consider how they can improve the social, economic and environmental wellbeing of their areas, a more sustainable and efficient public service will develop which holds the needs of its users at its heart.’