Legislating for Social Value

Teasdale, S., Alcock, P., & Smith, G. 2011. Legislating for the Big Society? The Case of the Public Services (Social Enterprise and Social Value) Bill, paper presented at Social Policy Association Conference, University of Lincoln, 4-6 July 2011.

The Public Services (Social Enterprise and Social Value) Bill, a Conservative MP’s Private Member’s Bill to enshrine the importance of social value creation and social impact is making its way through the UK Parliament. The Bill was formally described as “A BILL TO Require the Secretary of State and local authorities to publish strategies in connection with promoting social enterprise; to enable communities to participate in the formulation and implementation of those strategies; to require that public sector contracts include provisions relating to social outcomes and social value; and for connected purposes” (House of Commons, 2010)

In implementation this means that before a public authority invites bids to provide goods and services it should be compelled to consider how it (the authority) might “promote or improve economic, social or environmental well-being” by means of any contract and that it should consider how to take these matters into account as part of its awarding criteria. (see CSI’s Social Procurement research papers which investigate the use of social clauses and creating shared value procurement practices in Australia)

The Teasdale et al paper uses the Bill’s progress to explore “the possible contradictions in political principle made explicit in political practice that lie at the heart of the Big Society discourse and across competing political governing philosophies in the Conservative Party.”

The authors’ analysis of the parliamentary debate using the Hansard record reveals contradictory discourses around three key issues:

  1. Should voluntary and community organisations and social enterprises     (VCSEs) be given a fiscal advantage to deliver public services?

2. How should social value be conceptualised?

3. What should be the role of legislation in creating the Big Society?

And further, the authors argue that these contradictory discourses are symbolic of wider unresolved tensions within the Conservative Party, which are played out within the Big Society agenda:

 “The support of the government for the principles of the Bill would suggest that the Big Society is in the ascendancy. However closer scrutiny of the position expressed by the Cabinet Office on behalf of the government reveals that the compromise position is likely to favour Market Liberals within the Conservative party.”

The Bill’s second reading debate, it is argued, exposed the different ideological and policy frameworks underpinning the Big Society and Market Liberal approaches to public service reform, with supporters of market liberalism favouring a traditional laissezfaire approach and Big Society protagonists arguing for legislation to tilt the playing field in favour of VCSEs.

According to the authors their analysis of the debate also revealed that there is general consensus among Conservative MPs that the role of the state in the direct delivery of public service should be reduced as part of a reform of public services aimed at a re-balancing of the mixed economy of welfare. But there is considerable disagreement as to which organisations should fill the gap. From a Big Society perspective there is a clear preference for VCSEs delivering publicly funded services, not only because of the additional social value they create, but also because they might reinvest surpluses from delivery these contracts to:

“…innovate and expand their activities, using their funding to further build their capacity and strengthen their community base” (Chris White who introduced the Bill)  

However, Market Liberals, whilst recognising that supporting VCSEs to deliver public services may be a laudable aim, also argue that these organisations may in practice be unsustainable and cost the taxpayer money by virtue of their inefficiency.

On the matter of measuring social value, Big Society proponents see social value in terms of reciprocal links and a cohesive society; that VCSEs delivering public services create additional social value when compared with public and private sector deliverers, for example, through the employment and training of long-term unemployed people, engagement with local communities and engendering public trust.

Market Liberals, however, argue that because all enterprise seeks to create value for other people it is necessarily social and a separate category of social enterprise is unnecessary.

Some MPs appeared to straddle both camps, arguing that social value can equate to financial value that is retained within communities, with one arguing that the term ‘social enterprise’ should be extended to include locally‐owned businesses.

With respect to the third area of contradictory discourse, whether there is a role for legislating the Big Society, Market Liberals were opposed and expressed specific concern about mandatory procurement processes.

Since this paper was published amendments to the Bill have been made: removing the term ‘social enterprise’ from the title, removing the requirement on government to draw up a national social enterprise strategy, and removing the proposed duty on local authorities to set out how they will engage with local social enterprises.

It seems the tenet of the paper – that the Market Liberals within the Conservative party would succeed in any compromise has been proven.

The paper can be found here

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