Public Services (Social Value) Bill

Lord Wallace of Saltaire Excerpts

Friday 27th January 2012 Lords Chamber

[Lord Wallace of Saltaire]

My Lords, I am delighted to speak on behalf of the Government to support this small but significant Bill. We support it because it contributes to the ambitions of the coalition Government—which, after all, are not fundamentally different from those of our predecessor Government—to reform public services by ensuring that they achieve optimum value and promote economic growth, as well as strengthen relationships with communities.

The Bill requires relevant authorities to consider how to improve the social, environmental and economic impact of public service contracts at the pre-procurement stage. As noble Lords have noted, it requires commissioners to consider consulting on public services, thereby empowering communities to play a more active role in shaping them. It ensures that commissioners consider the full impact of services on the people they serve, and it will enable them to maximise the social, environmental and economic impact of public money. It does not change procurement law but sits within the existing procurement process. It does not undermine the requirement to award the contract to the most economically advantageous tender, nor is it at odds with the Government's value-for-money agenda and efficiency reforms, and by considering the full impact of a service it reinforces obtaining value for money in procurement and should help to improve the quality and efficiency of public services.

Several noble Lords noted that we are really talking about a long-term culture change and that we still face considerable obstacles in changing that culture. As I sit in the House listening to noble Lords talking about their commitment to localism but insisting that ring-fencing should be maintained on one subject or another—that the Secretary of State should retain full responsibility for the provision of public services and that Whitehall should intervene—I am conscious that we have not ourselves entirely gone through that culture change. As the noble Lord, Lord Wei, remarked, the Bill provides a nudge in that direction. Perhaps we need to recognise that some of us still need to be nudged. The noble Lord, Lord Mawson, remarked that regulation and form-filling still stifle innovation in this area. Centralisation is part of that, as we all know. All noble Lords will be familiar with Unshackling Good Neighbours, the report last year of the noble Lord, Lord Hodgson of Astley Abbotts, which attempted to tackle that in a number of ways, but we all recognise that we need a major culture change in this area.

After all, many of the public services with which government in any shape is concerned can succeed only if they are embedded in the local community. Bringing vulnerable people back within the links of a strong community is a necessary part of effective delivery. In probation and rehabilitation, for example, one group I have been involved with recently in Yorkshire is Together Women, with which the noble Baroness, Lady Thornton, may well be familiar. It is concerned with preventing young women being caught up in reoffending. It can and does save the public purse an enormous amount of money. It demonstrates that keeping people from being caught up in the prison process again is proving to be a considerable saving. That has not been easy to demonstrate. Indeed, I have been lobbying on their behalf to make sure that the Government fully understand the extent to which these unavoidably local bodies—they have to work with local people—provide help.

Mental health support and recovery, as a number of others have mentioned, is a similar activity. I was at the Bradford mental health re-employment awards lunch last Friday. The noble Baroness will be familiar with the Cellar project and a number of the other bodies that are working in that area. There are social enterprises raising money from their activities to fund what they do in partnership with local authorities. Similarly, many groups are already operating in care for the elderly. One needs to ensure when the government outsources activities that the vulnerable people are involved in their local communities. One of the examples pointed out to me is that if meals on wheels are provided by the elderly being brought into a local community centre to be fed, they can mix with each other, it is much easier to work with them and they are back to being involved in the community. That can contribute considerably to their continuing health. There is therefore the integration of service provision at the local level.

Close co-operation among different service providers on the ground can also improve effectiveness. My noble friend Lady Scott and I were extremely happy to be shown round the Bromley by Bow Centre by the noble Lord, Lord Mawson, last week in which the health and housing advice centres have a common counter. People who go to talk about particular health concerns may often be concerned about bad housing, which can be dealt with at the same time. The noble Baroness, Lady Stedman-Scott, also underlined the advantage of linking up across the different deliveries of local public services. I know very well from some of the issues that we have in Saltaire, which is not a problem village, that sometimes you have to deal with one bit of bureaucracy that says that something cannot be done and another bit of bureaucracy that says it has to be done. One has to lobby hard against that.

The Bill is a first step. It is part of a long-term process in an attempt to change the way in which government manages public services and co-operates with the not-for-profit or not-for-dividend sector. Where might we move on from here? The Government are now concerned with simplifying the procurement landscape and building the capability of commissioners and those concerned with procurement. We are considering ways in which larger contracts can be broken up into smaller lots where appropriate, and we are also planning a commissioning and procurement academy as a way of equipping commissioners and procurement authorities with the right skills and raising capacity. We are also hoping—this point was raised by the noble Baroness, Lady Stedman-Scott—to accelerate the measurement of impact. There are a number of ways in which we are concerned to improve the way in which to measure and collect data. We need to increase access to measurement tools and systems and the data that people need.

The legislation does not explicitly favour the involvement of social enterprises or any other particular form of provider in public service delivery. However, its focus on maximising social, environmental and economic value will inevitably ensure that the full contribution of organisations with a social or environmental purpose is recognised. Social enterprises are the prime example of such organisations. The current pressure on all parts of government to make spending cuts is particularly important to ensure that the full value of organisations is recognised. Consultation may clarify social and environmental aspects of the service, which will then be reflected in the specification. Effective consultation can also lead to fewer bureaucratic procurement processes—which is much to be hoped for—and a greater range of suppliers responding, which in turn will drive value for money.

On behalf of the Government, I welcome the Bill. I know that the House agrees that it is a useful and important step in the long-term process of transforming procurement in the public sector and enhancing our work to build what the coalition Government call the big society, what Liberal Democrats call the responsible society and what others call community engagement, active citizenship or local self-government. Whatever we call it, I hope that all parties share the same objective, and I hope that the Bill will help to push us further in that direction.

[Lord Newby]

My Lords, I thank all noble Lords who spoke in the debate. I am extremely pleased to get such support from all sides of the House. The debate demonstrated the degree of experience and expertise on the subject in your Lordships' House, and a deep, common-sense approach to difficult issues. Rather than looking at principles, we look at how things work on the ground. There is widespread acceptance that the Bill will not transform the world, but will play a part in doing so. As the noble Baroness, Lady Thornton, said, it is a step on the journey. As the noble Lord, Lord Wallace, said, it is a long-term process. As the noble Lord, Lord Mawson, among others, said, we are trying to effect a culture change, which one piece of legislation can only partially do.

It is one of the attractions of your Lordships' House that one normally leaves a debate with one or two new ideas or phrases ringing in one's mind. I will take away two from today. The first is the idea of the noble Baroness, Lady Stedman-Scott, that we are talking not about not-for-profit enterprises but about not-for-dividend ones. We want social enterprises, and they have to be profitable. If they are not, they are not enterprises and they will not be around for very long. The phrase “not for dividend” is not used often enough to segregate this sector from the rest of the entrepreneurial environment. My quotation of the day is from the noble Lord, Lord Mawson, who asked us all to become the Brunels of this generation. I had never thought of myself or my colleagues in those terms, but it is a comparison to which we should all now aspire. With that, I request that the House give the Bill a Second Reading.