Councils still focus on lowest price, rather than social value, MPs told
Sounds, surprise, surprise that only lip service is being paid to social value by procuring councils. This report of Select Committee discussions tells us:
MPs on the Commons communities and local government committee have heard from charities and thinktanks about how local government could deliver social value and support for small businesses.
The hearing on Tuesday, part of the MPs’ inquiry into local procurement, centred on the impact of the Social Value Act, introduced over a year ago, which requires public authorities to consider the wider social and environmental impact of procurement.
Key points:
• The Act is a useful tool, but could be better used by local authorities
• Local authorities still tend to focus on price and lowest prices, rather than look at wider social and environmental wellbeing indicators
• Procurement officers are looking for the “lowest care option”, when in the longer term the economic benefits from choosing the right contracts would lead to more efficient services
• Community right to challenge, which lets communities take over local services that they think they can run differently and better, has not been as widely used as people expected
• Only 22 formal right to challenge cases since the legislation was introduced as part of the Localism Act in 2011 and only two of these have been accepted
• “It does indicate that there are some limits to the ability to use that challenge and some councils are not feeling that there is any obligation on them to respond to that challenge.”
• But people may still be raising needs, to which councils are responding in less formal ways.
• Right to challenge could be seen as creating confrontation. If things can be resolved in a different way, they generally are although this can be harder to quantify
Local government must take more procurement risks
• Councils are “surprisingly good” in dealing with small suppliers and businesses
• No-one is doing everything they could, but “there are more examples of good practice than bad” but no one is doing everything they could,” he said adding that
• The biggest factor preventing good practice is risk aversion. “It’s not like councils don’t know what to do but in a tense environment in local government there is more fear of job losses and the responsibility for that falls on members.”
• Members need to tell officers engage with small businesses even though this carries more risk.