The Social Value Act: three years on

It’s been three years since the Social Value Act became law. Chris White, the then new Conservative MP, launched the Bill in October 2010. It gained Royal Assent in March 2012 and the former MP Tom Levitt recollects in his book, ‘Partners for Good,’ that it was, ‘a feat of patience only made possible by Parliament’s long sitting between one state opening and the next, unprecedented in modern times … Private members’ bills usually succeed, or more often fail, within nine months.’

A statute that almost never was, the Social Value Act was heralded as, ‘an ambitious piece of legislation passed with cross-party support that aims to transform the way billions of pounds is spent in local government, Whitehall and the NHS.’ 1

And yet, a conversation only last week, with a soon to be ex-strategy lead for a forward thinking and innovative London council, seemed to capture the general sense that it has underwhelmed. Did ‘it’ over-promise? Or have we — public, private and third sector thinkers, workers and do-ers — not done enough to seize the opportunity? Have local government, Whitehall and the NHS been transformed? Possibly; but not in the way that many in the sector would like.

We have to look at context. It’s tough for government commissioners and procurement teams to pay more than lip service to a policy framework and set of tools that permit commissioning on added value over price. Why? Well, because government has just faced the deepest spending cuts since the end of the Second World War. There’s context for you.

So let’s focus on price. Competition for public contracts will always be price competitive. But why does this have to lessen the potential impact of Social Value? If we can commodify ‘Social Value’, if we can commodify ‘community benefits’ and integrate them into the pricing and market mechanism that decides how contracts are awarded, then in fact, price competition gives the Social Value Act the teeth that many hoped it would have back in 2013.

‘Commodify’. ‘Market mechanism’. These are words that may be unpalatable to some. But at Firesouls, we’re building the Social Value Exchange and we use Social Value Credits to facilitate a trade of resources between supplier and community based organisation. Using an agreed exchange rate, the resources traded for Social Value Credits are a proxy for price. In other words, we put a price on Social Value, a price that suppliers also compete on. We hit the sweet spot — a good deal for communities and a fair price for suppliers.

The Social Value Exchange goes live later this month. If you’d like to know more, please get in touch with ruth@firesouls.co.uk or visit us at www.firesouls.co.uk.