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The Social Value Act and Business

How businesses, local authorities and social enterprises can make the most of the Social Value Act. 

The Social Value Act means that businesses will have to change the way they tender for public services so that they can show explicitly how they have factored Social Value into their business's models.

So what is social value?

“Social value” is a way of thinking about how scarce resources are allocated and used. It involves looking beyond the price of each individual contract and looking at what the collective benefit to a community is when a public body chooses to award a contract. Social value asks the question: ‘If £1 is spent on the delivery of services, can that same £1 be used, to also produce a wider benefit to the community?

The big question is how we measure social impact.

The answer to this question is still emerging. Some local authorities are now taking the Act very seriously and committing to including Social Value clauses in all their procurement. The challenge is to transfer this knowledge and enthusiasm and to make sure national government is procuring in a similar way.

When there are fewer resources around Social Value becomes even more important. This agenda is essentially about changing the mainstream business model so that social value is at the heart of product development, training and recruitment marketing etc. This way we will get a bigger impact in communities from how we spend scarce public money.

It is a smarter way to do business and needs bold ideas, which are often easier to push when the economic situation is difficult.

The Public Services (Social Value) Act 2012 became law on the 8th March 2012. From 31st January 2013 the Act is 'live' and commissioners and procurers must adhere to it. The Act was initiated by Chris White MP as a Private Members Bill

Trading for Good believes that the spirit of the Social Value Act can be easily translated to large business and how they operate. That’s why we are working with some great partners to take a look at what social value they are helping to create by working responsibly with small businesses in their value chains.

Fujitsu for example works with over 700 smaller businesses as suppliers. As a large partner Fujitsu is committed to the Prompt Payment Code, opening up its expertise to help smaller businesses to take on more young people and to helping smaller business expand their export business to Japan.

Fujitsu have encouraged their suppliers to join Trading for Good and in doing so we can report on the collective good being generated by these small businesses.

And Trading for Good can help smaller businesses who want to tender for public sector work. By completing a strong profile on Trading for Good we can help businesses shout about the good that they do and help evidence and measure the social good that they help create.

Kay Allen
About the Author

Kay Allen

Kay is the Founding Director of Trading for Good. She is a consultant on Responsible Business advising clients including Fujitsu, who won Responsible Business of the year with BITC in 2015. Previously a Non-Executive Director DWP Pension Disability and Carers Service, Kay is a well networked, high profile ambassador for equality and social action with a proven track record as an outstanding innovator in the private and public sector.

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