Public Services (Social Value) Bill

Baroness Hayter of Kentish Town Excerpts

Friday 27th January 2012 Lords Chamber

[Baroness Hayter of Kentish Town]

My Lords, first, I join the noble Lord, Lord Newby, in congratulating Chris White on having brought this Bill forward. He and I are fellow trustees of the Webb Memorial Trust; I have a feeling that Beatrice Webb would approve of this measure. I should also declare my interest as a trustee of a number of other charities, including one that deals with people with drug and alcohol misuse, which may well be able to take advantage of this Bill should it become an Act. It is not in that capacity that I speak but I most warmly welcome the Bill, as I believe it provides a fantastic opportunity to reform public sector procurement. In doing so, it will give thousands of social enterprises, voluntary organisations and charities the chance to provide services in their own communities. In the last year, the public sector must have spent tens of billions of pounds procuring services at a local and national level. This Bill will open up these contracts to voluntary organisations and charities at a time when, given the present economic situation, many are struggling—despite the great value that they offer to society.

I have a great belief that at all times, but particularly in today's economic environment, public money should always be used in the most effective way possible. Very often, the most effective way also helps to support the voluntary sector because of what it can bring to the table. Social enterprise, motivated by commitment but run on sound commercial lines, is an invaluable asset, but often such bodies face unfair competition. We therefore need to level the playing field to ensure that it is not just those large corporations that can bid for and win contracts, sometimes simply by spending the most on the commissioning process. Rather, we need to focus, as has already been mentioned, on quality of service delivery in output and effectiveness, in local or sectoral engagement, in expertise, in voluntary, user or consumer input, and in accountability. By including more social enterprises, voluntary organisations and charities in public sector provision, we can see quality improved and, in the longer term as well as in the short term, costs reduced.

This Bill makes really quite a simple change, but one that could be profound. Under it, the concept of value for money will not be diminished but will be widened to include social value. That means that instead of just considering who is providing the services and how cheaply they claim to do it—often, it is not quite as cheap as they claim—public bodies would also look at the additional benefits that would be derived if the service was provided by more innovative organisations. There are, as we have heard from the noble Lord, Lord Newby, examples across the country, including in our own area of Camden, where local authorities have adopted social value-led approaches in commissioning and with great success.

This Bill seeks to ensure that such benefits are spread across the country and that all organisations have to engage in similar smarter commissioning processes. It also stipulates that public bodies need to consider consultation when looking at implementing social value in their commissioning process. This is central, as social value will mean different things in different communities and in the different types of services that are being provided. I hope that the Bill will be passed, and if it is I hope that public bodies will consider particularly this clause about consultation and act in the spirit of openness that is at the heart of the Bill.

The Bill also allows local authorities to consider the whole locality when considering social value. This should allow the social impact of voluntary organisations and social enterprises to be appropriately assessed, so that their good work across and within our communities can be considered when public bodies are looking to increase social value. This could also have a positive impact on local job creation. In many parts of the country, the public sector remains a considerable source of employment. By ensuring that local employment opportunities are considered as part of social value in the commissioning process, the Bill could help to ensure that we can get as much out of the public’s money as possible. It is for this reason that the Bill has attracted tremendous cross-party support, as well as from numerous national organisations, as the noble Lord, Lord Newby, has mentioned.

Time, however, is critical as we rapidly—I think it is rapidly—approach the end of this parliamentary Session. We need to move quickly if this invaluable Bill is not be lost. If it was to be lost, that would significantly dampen morale in the voluntary and third sectors, which are going through tough times at the moment. The aim of the Bill, as summarised by the noble Lord, Lord Newby, in moving this Second Reading is to require public authorities to consider how a service that is being procured,

“might improve the economic, social and environmental well-being”,

of an area. This is an objective that we must all share. I therefore hope that your Lordships’ House will act in the spirit of consensus and ensure that this Bill receives a swift passage.