Buying social

Julian Blake calls on commissioners to seize the opportunity to make public benefit values central to the delivery of public services.

For commissioners and suppliers dedicated to making public benefit values central to commissioned public service delivery, there is no getting away from the too familiar problems with public service funding agreements, compounded by seemingly inflexible aspects of the European public procurement and state aid rules, further compounded by the impact of austerity budget cuts. But European law also sends positive messages over the barriers and obstacles.

At the end of 2010 the European Commission published Buying Social – A Guide to Taking Account of Social Considerations in Public Procurement. The theme is that the "unique European social model" is at the heart of the process of European integration, so that economic progress and social cohesion are "complementary pillars of sustainable development" and "socially responsive public procurement (SRPP)" can be an active means of promoting desirable public intervention. This should mean due recognition for public benefit service providers, other than only as undifferentiated market suppliers.

It should also have a particular bearing on the Coalition Government’s "mutualisation" policy, as delivery of public services outside the public sector is promoted, while their intrinsic public benefit nature must be preserved.

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There are opportunities here for charities and social enterprises and enlightened commissioners to refocus on their complementary public benefit purposes and to overcome the economic policy mantra that being non-profit distributing is irrelevant for the purposes of procurement.

Actually, such status "is not in itself enough to avoid classification as an economic activity" and by implication has distinctive features that may be of importance when it comes to economic activity in the delivery of public services.

Charities and social enterprises know well what those features are, because they are what their people are dedicating to. However, they are hardly ever articulated in the context of competitive procurement.

They can, explicitly, be requested by a commissioner as added social value features which may count with price and quality in the assessment and they can also be set as defining conditions of contract delivery.

Charities and social enterprises can respond to procurements in such terms, including by answering unasked questions creatively within the asked questions.

Ideally this would lead to the social dimension becoming so central to public service delivery that private suppliers would have to meet genuine public benefit standards to win procurements. That is a reasonable answer to fears about the private sector hijacking the mutualisation agenda and one given by a representative of the Cabinet office in our recent seminar on the subject.

Julian Blake is Co-Head of Charity and Social Enterprise at public benefit law specialists Bates Wells & Braithwaite London LLP