Government to strengthen social value requirements after Carillion collapse

In a speech at the Reform think tank, David Lidington said the Government would also require all departments in central government to regularly report on the social impact of new procurements.

All 4,000 of the government’s commercial buyers are to be trained as well in how to take account of social value and procure successfully from social enterprises.

The minister identified a number of further ways in which the outsourcing market might be strengthened in the aftermath of the Carillion insolvency. He said the Government would:

• require all key suppliers to develop what are known as ‘living wills’, “which will enable contingency plans to be rapidly put into place, while ensuring services are still delivered.”
• require government departments to follow for the first time a ‘playbook’ of guidelines, rules and principles that will encourage new entrants to the market and build mixed markets of suppliers.
• increase transparency by requiring a number of key performance indicators to be published - such as response rates, on-time delivery and customer feedback - "so that taxpayers can monitor outcomes, and track how their money is being spent."
• ensure that all 30,000 contract managers across the Civil Service can receive "the high quality training they need to undertake the proper management of contracts and suppliers".

The minister said that while these measures would improve how the contracting process was carried out, the Government must also recognise the need for a more diverse marketplace itself.

“It is clear that competition for contracts has often favoured large suppliers, with too narrow a focus on value for money,” he said. “But we want to see public services delivered with values at their heart, where the wider social benefits matter and are recognised.

“And that means government doing more to create and nurture vibrant, healthy, innovative, competitive and diverse marketplaces of suppliers. A marketplace that includes and encourages small businesses, mutuals, charities, co-operatives and social enterprises.”

Lidington said proposals would be developed for the government’s biggest suppliers to publish data and provide action plans for how they plan to address key social issues and disparities.

“Such as ethnic minority representation in their workforce, the gender pay gap throughout the company and what they are doing to tackle the scourge of modern slavery,” he said, adding that he had commissioned a review of these priority areas, and would announce the outcomes later this year.