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Legal changes aim to aid social enterprise contracts

The economy, energy and tourism committee of the Scottish Parliament has thrown its weight behind a call to make it easier for social enterprises to bid for public contracts.

Last week's session was the first committee evidence-gathering session on the state of the social enterprise sector in Scotland held by the Scottish Parliament.

Brian Weaver, chief executive of Highlands and Islands Social Enterprise Zone, told MSPs that the size of public contracts had mushroomed in size over the last decade and was now becoming "a real problem for social enterprises".

Most public contracts are currently put out to tender to cover entire local authority areas. As the value of such contracts often run into millions of pounds, this effectively precludes social enterprises from tendering as large contracts are more likely to be picked up by multinational corporations which are in a better position to take advantage of efficiencies of scale, Weaver said.

The Procurement Reform (Scotland) Act 2014 is expected to strengthen the hand of social enterprises in bidding for public contracts, by strengthening the extent of community benefit clauses on environmental, community and social grounds.

The legislation also introduces a sustainable procurement duty that stipulates that a public body has to consider how the procurement process can "facilitate the involvement of SMEs, third-sector bodies and supported businesses" with the aim of making it easier for them to tender for public contracts.

But the new legislation - which has yet to come into force - will not require local authorities to consider breaking up contracts for outsourced services into a smaller chunks in a way that would accommodate social enterprises. Pauline Graham, the chief executive of Social Firms Scotland, told the Sunday Herald that the new act "is not going to change behaviour overnight but we are certainly moving in the right direction".

Graham said she hoped the new legislation would encourage public authorities to think twice before "aggregating upwards" outsourced contracts for services. This would in future help social enterprises win a larger share of the £9 billion public procurement spend annually.

Contextual targeting label: 
Local government

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