Saturday, 21 April 2012

Procurement look Big in the Public Services (Social Value) Act 2012

In the firing line of criticisms regarding penalising the Third Sector through the Budget's tax regime and criticism that the Big Society aspiration has been swallowed up by the austerity strategy, I would have would have had a fanfare announcement of the The Public Services (Social Value) Act 2012. But I suspect many of those who need to operationalise the Act have missed something which should be fundamental to public procurement's contribution.  I don't think I even noticed a reference in Supply Management; CIPS's oracle! Is the absence of that fanfare indicative of a lack of ownership or scepticism that its potential will be realised?

Is the Act, which gained Royal accent on 8 March 2012 although yet to become law, is in danger of going the same way as so many strategic initiatives and disappearing off the procurement radar?  So, for example, when I ask the average UK public procurement person about the impact of the Welling-being Powers, The Compact, Eight Principles of Good Commissioning and the Small Business Friendly Concordat, I see that blank stare which says: 'I know nothing, and have done nothing, about embedding those in procurement policy, strategy, practice and performance management' (If you want a copy of my research paper on this, just let me know).  We have also considered some of the hollow strategic commitments relating to sustainable procurement.

Let's try to ensure that the Social Value Act does not end up the same way but is seized by procurement professionals as an opportunity to reposition procurement strategically and also 'make a difference'.

The Act is so simple and concise my blog risks having a bigger word-count than the Act itself. So, in a nutshell what does the Act say?

In a non-legal summary, it places a statutory duty on public procurement to consider how, in procuring services, a positive environmental, economic and social impact can be made.  This is not only in terms of the specification of 'what' is to be procured but also the procurement process of 'how' it is procured.  So procurement professionals have a real opportunity now to help their internal clients and the market see that they can be the architects of a more value-adding, innovative and effective procurement process (NB if you want a copy of my earlier paper on procurement roles, viz. architects, teachers, etc., just let me know).

The Act also places a duty to consider consultation - this could be perceived as an echo of the former Best Value legislation and strategic commissioning. Personally I'm all in favour of pre-procurement consultation in shaping the preferred outcomes and value engineering.  Procurement can assist in getting this right and not falling foul of public procurement legislation.  So seize the day.

Finally the Act reminds us that when addressing social, economic and environmental matters they must be relevant to the subject matter of the contract - nothing new here, but procurement professionals can help their organisations avoid the inclusion of totally inappropriate externalities.

Will the Act move us any further than its forerunners?  I don't know but the predecessors provide part of the foundation.

Does the Act present any risks to procurement?  Yes, without a doubt, set alongside the Freedom of Information Act, how will you respond when asked to respond to, 'How you satisfy the Duty?'

Let's make sure this isn't another missed opportunity and seize the day!  What we now need are a few Big Procurement Case Studies - I'm on the lookout and have a few in the lab at the minute!

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