Third Sector

Why is the Social Value Act relevant to the Third Sector?

The Act aims to involved more third sector organisations in delivering public services. It will ask public bodies to commission and procure services from providers that are committed to doing more than making money from a contract but want to give something back to the community, our ethos is that if you win work from a local council you should be prepared to give something to the community as part of delivering that contract. Third Sector organisations are well placed, as their business model delivers social value as part of the day job and cuts across many sectors including health, education, housing and transport.

The Public Services (Social Value) Act 2012 came into force in January 2013

This ground-breaking new law has the potential to transform the way public services are commissioned, requiring public bodies to consider choosing providers based on the social value created in an area and not on cost alone. The Act aims to help Third Sector Organisations win more public sector contracts as it laid down the principle that public bodies – including local authorities and central government – in England and Wales should avoid awarding public service contracts on price alone and take into consideration wider social, economic and environmental benefits. Because the Third Sector is generally considered to deliver more social value than the private sector, it is expected that the act would help it win a larger share of public sector contracts, estimated to be worth £236bn a year.


Views on the Third Sector as Suppliers

The benefits of the Third Sector are widely recognised and enshrined in a range of public sector policies and programmes. Third Sector has something positive to offer and there is growing recognition that the sector can help public sector buyers to gain a better understanding of local needs, can provide a useful source of innovation in the design of public services, and therefore make it easier to commission high quality services. However, there is still a perception that Third Sector organisations lack the skills and capacity to bid for and win their share of public sector contracts. Therefore it is important that there is ongoing focus, both nationally and locally, on supporting the third sector to develop the capacity and capabilities needed to effectively participate in competitive tendering processes.

Social Value Diagnostic Tool

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