Finance Minister Conor Murphy has announced a new policy which will see mandatory scoring of social value within public procurement contracts.
The new policy, agreed by the Executive, mandates that from June 2022, tenders must include a minimum of 10% of total award criteria to social value. This will apply to service contracts valued above £123,000 and construction contracts valued above £4.7million, accounting for approximately 97% of total government procurement spend.
The nine-month lead-in time before the new policy comes into effect was requested by stakeholders to allow for training to be rolled out and to provide time for Business Cases to build in any additional financial costs arising from the social benefits included in contracts.
The minimum weighting will increase to 20% from June 2023 subject to review and approval by the Executive.
Minister Murphy commented on the announcement: “Government has tremendous buying power, spending upwards of £3 billion annually on supplies, services and construction works.
“It is imperative that we harness this spending power to deliver economic, environmental and wider societal benefits.
“This new policy will help create jobs for people in deprived areas and deliver environmental benefits by requiring contracts to employ low or zero carbon practices.”
The Minister continued: “If we are to create a fair and cohesive society, then we have to tackle low pay.
“This new policy will see the Living Wage being included as a condition of contract for all tenders from June 2022.
“Given the Executive’s significant spending power, this is a major step forward in ending poverty pay.”
The Minister concluded: “I was determined when I restructured the Procurement Board at the end of last year that Procurement Policy would be co-designed by the people who develop contracts, and the companies and workers that deliver those contracts.
“This new policy represents a significant step-change for both government and tendering organisations.
“It sees social value placed at the very heart of public procurement, setting new standards that rewards companies for doing the right thing while ensuring the Executive uses its spending power for the common good.
“I commend the Procurement Board for developing this transformative policy and look forward to the Board bringing further improvements to Public Procurement in the time ahead.”
The Public Procurement Policy Note can be found from the Department of Finance website.
