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Contractors face stricter 'social value' procurement standards

The government has announced it will take into account wider social value as well as cost in the award of public sector contracts.

Cabinet Office minister David Lidington (pictured)  said new measures would see all major procurements “explicitly evaluate” social value in the award of contracts, rather than just “consider it”.

Mr Lidington said government plans to extend requirements under the Social Value Act were designed to “level the playing field” for small businesses, mutuals, charities, co-operatives and social enterprises bidding to win government contracts.

“We want to see public services delivered with values at their heart, where the wider social benefits matter and are recognised,” he said.

“That is why I can announce today that we will extend the requirements of the Social Value Act in central government to ensure all major procurements explicitly evaluate social value where appropriate, rather than just ‘consider’ it.

“By doing so, we will ensure that contracts are awarded on the basis of more than just value for money – but a company’s values too, so that their actions in society are rightly recognised and rewarded.”

The minister added that the government intended to use its purchasing power to improve equality and diversity at its major suppliers.

He said the government was developing proposals that would see its biggest suppliers publish data and provide action plans for addressing social issues, modern slavery and disparities such as ethnic minority representation and gender pay.

Other measures for suppliers include the development of ‘living wills’ that would allow contingency plans to be rapidly put into place should a company run into financial difficulties.

The government also said it intended to publish key performance indicators on major contracts.

Last week the Cabinet Office minister said the government would “draw important lessons from events leading up to and following the liquidation of Carillion” in a letter to the inquiry into the firm’s collapse.

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