August 9, 2018 / 7:15 PM / 3 months ago

Britain to help ethical firms win more government contracts

LONDON (Thomson Reuters Foundation) - Britain announced plans to give more business to firms that have a positive social impact on Thursday, as it seeks to cement its status as a global leader in the growing sector, but experts said the strategy did not go far enough.

The government said it wanted to work more closely with charities and social enterprises - businesses that seek to do good as well as make a profit - to create a fairer society.

“This strategy is intended to help government strengthen the organizations, large and small, which hold our society together,” said the first plan of action focusing on civil society in 15 years.

“Together we can build a country that works for everyone.”

Social services, from health to transport, are increasingly being outsourced to private companies to save money and boost innovation, with a third of government spending going to external suppliers, government data shows.

The government said it will help social enterprises win more public sector contracts by boosting a landmark 2012 law, which encourages officials to consider the social and environmental impact of contracts they award, not just choosing the low bid.

“We are determined to ensure that public spending is used to generate social value in addition to the goods and services it purchases,” the strategy said, adding that businesses should benefit society, not just their shareholders.

Britain is seen as a global leader in the innovative social enterprise sector, with about 70,000 businesses employing nearly 1 million people last year, according to Social Enterprise UK.

But social enterprises only win about 10 percent of public sector contracts, says membership body Social Enterprise UK.

The new strategy comes amid years of budget cuts, which have strained social services, and questions over the rising use of private companies to deliver them, following the collapse of one major provider, the construction giant Carillion.

Social enterprise experts welcomed plans to boost the 2012 Social Value Act so that central government must ‘account for’ - in other words, report on - the social impact of procurements, rather than just ‘consider’ it.

But this should also be extended to local government, Andrew O’Brien, a director Social Enterprise UK, told the Thomson Reuters Foundation.

He also expressed cautious optimism about plans to create a regular forum for social enterprises to meet with government, saying it could make it easier to learn about initiatives to help the sector.

“We want this to be something that has real substance to it. We don’t this to just be a talking shop,” he said.

Reporting by Lee Mannion @leemannion; Editing by Katy Migiro. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, property rights, climate change and resilience. Visit news.trust.org

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