Progress | Centre-left Labour politics

Social value, inspirational stories

Inspirational stories uncovered by Social Value Act review

Imagine, if through one simple piece of legislation you could help unemployed people into work, reduce crime and relieve the burden on our NHS.

Imagine, if at the same time, you could save millions of pounds of taxpayers’ money in an era of austerity.

If that all sounds too good to be true, and you have yet to hear about the Social Value Act, you are in for a pleasant surprise.

For the act has been doing all these things and more since coming into being in 2013.

I was one of the members of parliament who supported the passage of the act through parliament, and over the last few months I have been part of a government-appointed panel set up to review how effective the act has been.

The act means public sector bodies like councils and hospitals must consider social, economic and environmental benefits to local communities, rather than just cost, when awarding contracts to provide services.That means not only choosing an organisation which will provide the basic service, but also one which will do that little bit extra to help local people in doing so, be it paying the living wage, or working with a local school.

During our review, we found some really inspiring examples of how it has helped people.And we found that the act had given smaller businesses, social enterprises and charities a ‘competitive advantage’ in bidding for contracts.

Take Emmaus, a federation of social enterprises which has secured a number of contracts with councils through which it employs homeless people to help supply furniture and white goods to council house tenants.

They get both a home and a job and recent calculations show this has saved nearly £2.5m by reducing the cost of council payments for hostel accommodation, pressure on drug and alcohol services and landfill costs.

It has also saved central government around £3.5m, including nearly £1.5m in NHS and emergency costs, almost £800,000 for the Ministry of Justice in court costs due to reduced crime and more than £1.2m for the Department for Work and Pensions due to a fall in the number of people claiming benefits.

We are leading by example in parliament, and both Houses were accredited as ‘Buy Social’ organisations by Social Enterprise UK in November. For instance, the Jubilee Hall Trust charity, which was awarded the contract to run a gym for MPs and parliament staff, invests profits into community outreach programmes including dance classes for older people and healthy eating programmes for obese children.During our review we also found thatsome large firms like Fujitsu have recognised the benefits of applying the idea of social value when they award contracts in their supply chain.

While there were plenty of really positive examples of how the act has been used, we also found its full potential was yet to be realised.

More needs to be done to raise awareness about its requirements among both organisations which award contracts and those which compete to win them.

Councils and housing associations are leading the way in using the act but take-up has been lower by central government departments and clinical commissioning groups.

Our recommendations include producing more guidance on the act for small businesses, working with individual central government departments to show how social value can apply to them and running a Social Value Awards competition.

One of the key things we need to develop is looking at how the likes of social enterprises and small businesses can prove that what they do really helps local people – and quantifying this social value with a pound sign can really help those awarding contracts to choose between competing bids.

We must therefore find ways of measuring community benefits and we are therefore asking Inspiring Impact, a 10-year programme led by the voluntary sector, to develop a methodology.

Get these things right, and we might even consider extending the act to cover goods as well as services – bringing major housing and transport schemes under its umbrella.

But of course there is nothing to stop any organisation embracing its principles right now.

Labour has taken a bit of a battering from the rightwing press over the last couple of weeks for supposedly being ‘anti-business’.That is simply not true. We are not the ones moving towards a vote on the possibility of leaving the European Union – a move which would be really costly for British business and jobs. We have promised to cut business rates.What we are against is ‘bad business’. We want businesses to take inspiration from and work with the likes of social enterprises and charities in operating for the good of our communities.That is what social value is all about and the idea has been embraced by councils of all political persuasions including Labour-run councils like Salford, Wakefield and Lambeth.

Some people will raise their eyebrows and say ‘but businesses are only interested in the bottom line’.While this will be true in some instances, there is growing evidence that doing good is good business.It is great PR. People who see a business taking on unemployed local people as apprentices for instance, or subcontracting to a local social enterprise, are more likely to give that business their custom.

A new online platform tradingforgood.co.uk includes a directory of companies of all sizes which are committed to social value, enabling the growing number of socially conscious customers to choose an enterprise which shares their values. And our brightest young talents increasingly want to work for businesses which are seen to be forces for good.

The Social Value Act has already been of great benefit. But social value is not just about a piece of legislation, it is a mindset. And it is a mindset with a rare and exciting potential to help the public, private and third sectors – but most importantly of all, thousands of people in communities across the UK.

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Hazel Blears MP is a former secretary of state for communities and local government

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Hazel Blears

is former secretary of state for communities and local government

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