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Following the Public Services (Social Value) Act 2012 -a UK Bill that requires public authorities to take into account social and environmental value when they choose suppliers, rather than focusing solely on cost; The City Council of Birmingham decided to apply extensively this new piece of legislation in all its new public procurements (both services and goods).

How it works

The social value policy in Birmingham is a new set of required criteria in any public procurement of goods and services that aims to foster the local economy. The idea is to seek measurable, verifiable social value outcomes in commissioning to improve the wellbeing of the local community.

The Key social drivers This new policy is based on the “Business charter for social responsibility “launched in April 2013 after a year consultation between the Birmingham City Council and the local business community. 6 main criteria have been identified (the list is yet not exhaustive):

  • Local employment – signatories will provide employment and training opportunities for local people, especially in target areas where unemployment is high
  • Buy Birmingham First – signatories will be asked to endorse the principle throughout their supply chain
  • Partners in communities – play an active role in Birmingham’s neighbourhoods, working with community support organisations, especially in areas of the city in greatest need
  • Good employer – supporting staff development and welfare, adopting the Living Wage within their organisation
  • Green and sustainable – committing to protecting the environment, minimising waste and energy consumption, while using other resources efficiently
  • Ethical procurement – signatories will commit to employing the highest ethical standards in their own operations and those within their supply chain (paying fair share of taxes, not support child Labour, pay suppliers on time etc)

The application of the policy applies to all levels of public procurement (including European Public procurements levels).

Implementation: a user-based procurement strategy A new Process « On commencement of each and every commissioning exercise service specifications and/or existing service designs will be interrogated to examine: a) Why the service is being commissioned -is it still relevant and what are we trying to achieve? (Baseline service outcomes.) b) Undertake service-user, community or marketplace consultation or research to redefine or confirm needs and create opportunities for co-design / coproduction? (The case for service redesign or other delivery options.) c) The additional social value outcomes we should be seeking to derive from the commissioning. (The social value contribution the commissioning can make to the Council’s strategic priorities »

A new type of support for the local economy

  • Ensuring that tenders are advertised in places and by methods which maximise the chances of them being seen by ‘small suppliers’ (the term Birmingham City Council uses to cover all kinds of small businesses, including social enterprises and third sector providers).
  • Disaggregating’ contracts (i.e. splitting contracts up) so that they are not too large for smaller providers to be able to service.
  • Ensuring that financial, insurances, reserves or other thresholds are not set so high that they inadvertently preclude smaller suppliers.

The added-value of the policy

From The Leader’s Policy Statement

  • Enable SMEx & social enterprises to participate in Birmingham City Council commissioning requirements (=lower barrier access)
  • Tackle inequality and deprivation, promote social cohesion across all communities in Birmingham, and ensure dignity, in particular for elderly and safeguarding for children (=equity-based approach)
  • Lay the foundation for a prosperous city, built on an inclusive economy (=local economy boost).
  • Involve local people and communities in the future of their local area and public services – a city with local services for local people.

Sources and links

Other examples of ethical procurement in Europe

GENERAL TREND: "In 2010 legal approaches to SRPP (Socially responsible public procurement )are present in ten Member States (Austria, the Czech Republic, Belgium, France, Germany, Italy, Slovakia, Spain, Sweden and Norway); in most cases, however, laws refer to highly specific considerations, the most prominent being the inclusion of people with disabilities and respect for labour rights (...)Remarkably, the implementation of SRPP in the Member States is backed by a number of initiatives on the regional and local levels." SInce the 90's, ethical procurement has been usually associated with the concept of "sustainable public procurement' and environmental standards which has now come to maturity. "Denmark, for example, has been pursuing a green public procurement (GPP) policy since 1991; The Netherlands, too, started to implement GPP policies in the early 1990s. These countries and others – such as Sweden or the UK – demonstrate the potential for countries to use their market power to pursue other policy goals" SOURCE: Strategic use of public procurement in Europe)


FRANCE: In 1999, the Texier Law: Law introducing a humanitarian criterion for school furniture procurement (local authorities should only buy furniture from countries not infringing international conventions on children’s rights.). Reform of the Public Procurement code in 2001: Possibility for public authorities to set social and environmental clauses in their specifications. MORE INFO

ITALY: The Italian Region of Umbria introduced a law for ethical criteria in public procurement in 2002 (Companies that have been certified under the SA8000 ethical workplace standard will receive preferential treatment when bidding for local government contracts) . National Action Plan 2012-2014 on CSR

SPAIN: Public sector procurement of products and services in Spain must take account of corporate responsibility factors since 2008. MORE INFO

BELGIUM: Adoption of the Green Marshal Plan by the Walloon Parliament in 2009 that integrates “new orientations including the promotion of sustainable development in all regional public policies”. Policy New dispositions ongoing process: In February 2013, 5 Brussels MP’s brought in 2 specific orders (“ordonnances”) to favour ethical, social and environmental clauses in all public procurement. MORE INFO

THE NETHERLANDS: The Netherlands has prioritized five product groups for Socially responsible public procurement, adopting specific social and ethical criteria in 2010. Public Procurement ANALYSIS