With the collapse of Carillion prompting calls for greater diversity in public procurement, Cabinet Office minister David Liddington recently announced plans to make it easier for voluntary, community and social enterprises (VCSEs) to win government contracts. This marks a renewed push for the government's 'social value' agenda.
However, the inaugural Tussell-Social Enterprise UK Index of Community Interest Companies (CICs) in Public Procurement reveals slow progress over the last few years in awarding contracts to social enterprises.
CICs win 69 contracts in Q1 2018
The first quarter of 2018 saw 55 CICs win 69 public sector contracts. With 65 contracts won by CICs in Q1 2016, this shows growth of just 6% over the course of the last two years. More encouragingly, the value of contracts won by CICs in Q1 2018 was £252M - the highest quarter since the end of 2016.
Public sector contracts won by Community Interest Companies (CICs) over time
Local Govt leads the way on awarding to CICs
Local Government awards far more contracts to CICs than Central Government. Nearly two thirds (61%) of contracts awarded to CICs in the Q1 2018 came from Local Government, compared to 10% from Central Government.
Number of CIC contracts by buyer type (Q1 2018 vs Q1 2017)
CICs win less than 1% of all contracts
Overall, CICs won just 0.4% of all contracts in Q1 2017. They are even struggling to win contracts specifically marked as suitable for Voluntary, Community and Social Enterprises (VCSEs) – only 1.1% of such contracts were won by CICs, and only 11.1% by other VCSEs. There is clear scope for improvement amongst public sector buyers in awarding contracts to CICs.
The Tussell-Social Enterprise UK Index will be updated quarterly. By promoting a fact-based understanding of the public sector supply chain, it will measure ongoing progress in the government’s social value agenda.