‘Social value’ procurement rules are an absurd waste of time and money
Procurement is not a sexy topic, but stay with me here. The public sector spends around £400bn a year buying goods and services from the private sector. You can imagine the scale: NHS equipment and Ministry of Defence gear, police cars and IT infrastructure, immigration processing centres, security guards, construction projects and fax machines.
It’s big business, and up until around 2012 spending decisions and contract awards were based firmly on cost and capacity to deliver. Indeed, the Local Government Act of 1988 prohibited public bodies from paying any attention whatsoever to “non-commercial considerations.” But then, in the dying days of the last Labour government, came the dreaded 2010 Equality Act (which required the public sector to pay due regard to new equality law in its procurement process) and this was, unbelievably, picked up and gold-plated by the progressive Con-Lib coalition government that followed.
The 2012 Public Services (Social Value) Act shifted procurement considerations away from cost and value, requiring public authorities and entities to consider how any spending decision “might improve economic, social and environmental well-being.” In 2020, under a nominally Conservative government, this was further enhanced and the duty was imposed on all central government spending decisions, with a formalised calculation of “social good” weighting baked into any tender process.
Most of this madness came from the Tories
The Tories – unbelievably – strengthened it again in 2022. Being good value for money became almost irrelevant. Instead, would-be suppliers had to demonstrate how their bid scored on contributing to a range of policy issues including modern slavery, net zero, domestic violence and diversity. This ever-increasing mass of well-intentioned but utterly ludicrous regulation is just one of the reasons why infrastructure projects cost so much and take so long; this paper work has to be filled in. Consultants are needed. Committees have to be convinced. In short, we lost our minds.
Now Andy Burnham wants to simplify this chaos and focus the evaluation of procurement deals on job creation and skills training. Has common sense finally reasserted itself? Of course not. It’s just another government using its financial muscle to engineer its preferred policy outcomes, with more ‘weight’ now being given to firms paying above the minimum wage and offering work from home. The burdens will still exist; they’re just being shifted to fit a new agenda.
The entire approach is an absurd, wasteful, indulgent, performative and expensive mess. It disadvantages smaller players, ties the country up in red tape and favours larger firms that can afford to jump through hoops.