Public sector procurement change likely to spur outlook for social enterprises and mutuals

There is a good piece by Colin Cram on the Guardian Public Leaders Network which sums up a mood of change in public sector procurement towards social enterprise and the future of mutuals.

Cram argues that  “the public sector procurement spend of £236bn is the biggest lever the government has to generate economic growth. It could be argued that the focus on price or an overly narrow interpretation of cost has damaged UK businesses and UK economic growth. This, more than anything else, might explain the relative success of German industry and business compared to that of the UK.”

He suggests that MP Chris White’s public services social value bill, which has passed its third reading and report stage in the House of Commons,  seeks to strengthen the social enterprise business sector and make the concept of ‘social value’ more relevant and important in the procurement and provision of public services.

Its key elements, says Cram, include:

• A duty on the secretary of state for communities and local government to publish a national social enterprise strategy to encourage engagement in social enterprise.

• Local authorities, when entering into public procurement contracts, to give greater consideration to economic, social or environmental wellbeing.

There is already work in this area being done by Coventry City Council, which is helping social enterprises secure more business by supporting the creation of a consortium, which will be in a much better position to win business, and by the London Borough of Lambeth.

These procurement developments are likely to be  important for the take-off and future well-being of public service mutuals. It will be interesting to see whether further mutuals can take off inspired by the example set by the London Borough of Hammersmith & Fulham which is set to launch in early 2012.

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