A Social Value Bill: Still waiting

Despite unanimous cross party support, Northern Ireland remains the only region of the UK without social value legislation. Returned Chair of the All-Party Group on Social Enterprise Stewart Dickson MLA outlines the need for implementation of the ready-made Bill to build on progress to date.

In early 2017, the Finance Minister, Conor Murphy MLA stated that the Executive would bring forward social value legislation. This announcement came off the back of a Private Member’s Bill that I proposed in the Assembly, which was subsequently taken up and shaped by the All-Party Group (APG) on Social Enterprise.

It is now August 2022, and social value legislation is still non-existent in Northern Ireland.

Why? Because time and time again, the functioning of Stormont has been frustrated by the on-and-off-again nature of political manoeuvring in recent times.

“Without legislation applicable to central government, local government and arm’s length bodies, social value as a consideration for the awarding of public sector contracts is not guaranteed.”

But where social value legislation is concerned, the APG on Social Enterprise has already done the work. The content is quite literally sitting there ready to go. It is not a long bill and all that is really needed is for politicians to agree to get back to work, and then for the Finance Minister to really commit to pushing this piece of legislation through.

But what is a Social Value Bill? What is a social enterprise for that matter?

In my mind, a social enterprise is a commercial business like any other, with a focus on generating profit. What is different about a social enterprise, is that generated profit is re-invested back into the company in line with the organisations social or environmental mission. What social value legislation would aim to achieve, is more access and opportunity for social enterprises to compete on a level playing field for public contracts. Beyond that, it would ensure that all bids for publicly tendered procurements would have to be considered through the lens of social value.

There are a multitude of varying ‘types’ of social enterprise currently operating in Northern Ireland. In fact, there are approximately 900 social enterprises, employing thousands, and generating millions, operating across the region. Each social enterprise is dedicated to their own philanthropic mission.

The benefits of social enterprises on our society are wide-ranging. Often coming to the aid of the Executive, and taking pressure off government departments. For instance, social enterprises can help reduce the demand on healthcare services, by providing purpose and boosting mental health and wellbeing for individuals often prevented from accessing the labour market. Reoffending rates, for those who have gone through the justice system, have been shown to be lower for those that have been employed by a social enterprise. The knock-on effects of these benefits is not just obvious for the public purse, but also in the social makeup and happiness of our local communities.

Moreover, social enterprises have proven themselves to be exceptionally innovative and flexible. During the worst of the pandemic, many social enterprises were able to pivot their operation, reframing their work to ‘solve’ or ‘abate’ a Covid-caused problem. For instance, some companies began producing hand sanitiser or PPE at a time when Northern Ireland was experiencing increased demand. All of this was done with the specific social value mission kept at the core of their work.

So why is Northern Ireland the only region of the UK to not have social value legislation? England’s Public Services (Social Value) Act came into effect in 2013, Scotland’s Procurement Reform Act came into effect in 2014, and the Welsh Wellbeing of Future Generations Act came into effect in 2015.

In Northern Ireland, the public sector spends in excess of £3 billion annually on goods, services, and works. This amounts to more than a quarter of the Executive’s budget. A Social Value Act would allow this public spending to go further for the people of Northern Ireland, as it has statistically been proven to do in other areas of the UK.

Progress

Despite the on-again-off-again nature of Stormont over the past decade, it must be said that some significant progress in the area of social value has been made. In December 2020, the Finance Minister restructured the Procurement Board so that when assessing tenders, contribution to social good is a required field of consideration. Moreover, the Minister appointed Colin Jess, Director of Social Enterprise NI, to the Board. Previous ministers took other steps to promote the profile of social enterprises, including making it easier for social enterprises to access skills programmes and other government support packages.

However, all of these steps fall short of legislation. Without legislation applicable to central government, local government, and arm’s length bodies, social value as a consideration for the awarding of public sector contracts is not guaranteed.

This is key because, by spending smarter, public money being channelled into necessary services comes full circle by being reinvested for community benefit. For local communities, this means that social, economic, and environmental issues can be tackled alongside everyday community needs. This is the definition of a ‘two birds with one stone’ solution; a win-win for Northern Ireland.

What is needed is a move away from decisions being made on a ‘most economically advantageous tender’ basis, to a ‘most advantageous tender’ approach which allows for the factoring in of social value. The goal of any public sector procurement is surely to make society and our planet a better place to live. For this, price is a factor yes, but not the only factor, and that is what this legislation would instil.

If only we could get an operational Executive, there might even be a silver lining to the long delays in passing this legislation. By this, I mean we have the benefit of hindsight, and can assess how legislation has worked in other regions. For instance, we could include provisions for public sector organisations to consider breaking out contracts into ‘lots’. Smaller social enterprises often struggle to bid for contracts, especially because partnerships are not given the same footing as bids from single providers who tend to be large companies. Not only is this patently unfair on social enterprises, but there is also sense in spreading risk so that one provider is not solely relied upon to deliver on a contract.

In recent weeks I was returned as Chair for the APG on Social Enterprise. The first agenda item on my ‘to-do’ list was to seek backing for a Social Value Bill. Unanimous cross-party support was offered, which gives me great hope for the future success of a Bill.

However, before a Bill can be further progressed, we need our institutions up and running again, and this is what I call for today.