Gross spending on public sector procurement was £393 billion in 2022/23 across the UK. That’s more than the budget for the entire NHS – so it’s crucial that that money is being spent as sensibly and efficiently as possible.

At the Campaign for Fair Procurement, we think that right now, the opposite is true. The UK’s public procurement process is profoundly dysfunctional. It is bloated, wasteful, and works against small and medium enterprises (SMEs) eager to secure government contracts. Instead, it favours the same set of too-big-to-fail multinational strategic suppliers like Fujitsu, who are less nimble, less accountable, and less in tune with the needs of the country and the communities where projects are delivered than SME alternatives. There are a number of reasons for this, and chief among them is a piece of rotten legislation that has been lost in the machinery of government, forgotten about by the very MPs who voted it onto the books. Yet it continues to tick along, wasting the time of businesses and an estimated £50 billion of taxpayer’s money over the last 10 years.

Its name? The Public Services (Social Value) Act 2012 (SVA). This law requires public sector organisations to consider “social value” in the procurement process – though what that actually means is very ill-defined, and it is therefore difficult to quantify and measure. Where attempts are made to define it, we are given the bog-standard platitudes: “promoting equality and diversity”, “tackling economic inequality” and “fighting climate change”. It is perhaps unsurprising, then, that very little is being done to track the outcomes of social value endeavors. Neither the Government nor independent bodies like the National Audit Office publish this information – yet the Cabinet Office has been more than happy to hand out “Social Value Awards” to organisations it deems worthy. In other words, the concept of social value in public procurement is undefined, unmeasured, and unaccountable – but still it persists.

It is no surprise that a cottage industry of social value consultancies has sprung up in the wake of the Act. Fundamentally, these companies exist to extract capital from SMEs by offering guidance on navigating the convoluted Social Value Model. Leviathans like Microsoft, Capita, BAE Systems, Deloitte, and KPMG, on the other hand, can afford to hire whole teams to deal with social value requirements. This is the true cost of the SVA – the impact on mass corporations is minimal, while the impact on SMEs is significant. SMEs cannot afford to waste their time and money worrying about whether their services adequately “promote equality and diversity” or “tackle economic inequality” – and as such, they are shut out from winning lucrative government contracts.

In advanced mass societies like our own, it is not unreasonable to want to use the state to advance social agendas. The state has tremendous power, and in the right hands it could be used to pursue genuine progress and cultivate a national culture of excellence. Unfortunately, the way that such goals are being pursued right now leaves a great deal to be desired.

How much time and money is being wasted in ticking the countless boxes required by the SVA? What is it doing to competition and innovation within swathes of sectors, from IT to construction? And what is the price tag for us, the taxpayer? The answer is, we have no idea. That’s why the CFP was founded – to count the cost to business, undertake research that the Government should be doing, be a voice for SMEs so cruelly and needlessly burdened with all this rigamarole, and ask: if Social Value is the goal, what benefits are truly being delivered? The public procurement process is already excessively complex – the last thing SMEs need is yet more hoops to jump through.
If your business has been prevented from taking on government contracts due to excessive red tape – particularly demands to demonstrate “social value” – the Campaign for Fair Procurement wants to hear from you.