Last night, the TSIC team attended the All Party Parliamentary Group on Social Enterprise (APPG) where discussion centred on the new Public Services (Social Value) Act 2012 (PSSA).  The Act requires public bodies such as local authorities, NHS bodies, housing authorities and government departments to consider how they could use public service contracts to improve the economic, social and environmental well-being of communities.

 The PSSA reflects the growing support for the idea of “social value” in commissioning.  This outcomes based approach requires public commissioners to look beyond the price value of each contract and to ask what other social, environment or economic benefits a contract could bring over and above the purchasing of services.  While the PSSA will require a fundamental shift away from the risk averse environment in which many commissioners now operate, it is encouraging to see some public bodies already experimenting with this new approach.  For example last year Camden Council and East Sussex County Council used an outcomes based approach to commission mental health and health, social care and well being services respectively.

The enactment of the PSSA, which follows on the coattails of The Open Services White Paper and the Localism Act 2011 signals the Government’s continued desire to support innovative, value driven, community supported services. This is great news for social enterprises and charities who are already motivated by a strong social mission.  Such businesses are already creating social value, for example by providing training and employment to the most vulnerable, creating opportunities for community engagement , improving educational attainment and improving health and nutrition.

As the Minister for Civil Society, Nick Hurd MP noted in his speech to the APPG last night, ensuring contracts deliver on social value is the only way commissioners can precede to ensure that the public gets the “most bang for its buck.”  With annual government spending at £236 billion, it is crucial that this money delivers in every way possible.

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