Government has replaced value for taxpayer with infantile virtue signalling

HMRC on Whitehall (Image: Getty) We’re seeing a shocking £379bn – 32 percent of the Government’s annual budget – funnelled into public procurement. One must wonder, how can there be no room for efficiency improvements? But what’s even more alarming? The deeply flawed Social Value Act of 2012. This legislation has twisted the dynamics of public procurement in ways unfamiliar to anyone with basic economic understanding. Now, regardless of the size or location of the public sector buyer, there’s a push to pile on extra costs all in the name of ‘social value’. While encouraging a diverse workforce and community involvement are noble causes, the more than 50 criteria detailed in the accompanying Social Value Model have only compounded bureaucracy and costs for businesses trying to do their best for the taxpayer. These criteria, receiving an extra 10 percent priority during decisions, seem more like political meddling than a drive for efficiency. This Act has also thrown a safety net around larger corporations. Smaller businesses, even those with superior products, find it harder to navigate this red tape. The system doesn’t promote competition; it suppresses it. Woke rules such as encouraging employees to volunteer to promote green causes, and dictating that the whole supply chain must conform to Whitehall’s agenda, such as ‘ensuring the workforce proportionately reflects the diversity of the communities in which they operate’, are now part and parcel of procurement. The Government moved from seeking the ‘Most Economically Advantageous Tender’ to merely the ‘Most Advantageous Tender.’ To the discerning eye, this suggests more expenditure and lesser value. And alarmingly, this trend may pave the way for even more bizarre metrics from a Labour Government that often appears at odds with business sense. The shadows of the Social Value Act can still be seen outside of Whitehall. The recent conflict between Nigel Farage and Coutts Bank stemmed from the bank’s choice of a ‘social value accreditor’, B Corps. Businesses should certainly hold themselves to high standards, but the Government ought to think twice before embracing ideological companies like that of B Corps, and allowing them to supplement big business’ procurement chances. Thankfully, voices of reason are rising. Sir Conor Burns MP notes about the latest Adam Smith Institute paper, ‘The Price of Everything, The Social Value of Nothing’, that the Government is not thinking about hardpressed taxpayers when they draw up their procurement rules. The Government’s latest Procurement Bill will see hundreds of regulations slashed from the books, a great benefit from Brexit and our new independence. This will help SMEs from across the country innovate and provide high value, lower cost goods and services for taxpayers. But the Government can and should go further, reviewing the Social Value Act, and returning to a more simple and better system that delivers true efficiency and cost effectiveness for the public. Rishi Sunak has a golden opportunity to put taxpayers first. By eliminating this Act, he could ensure that economic growth remains at the forefront of a significant portion of Government spending. For the sake of every hardworking Briton, let’s hope he seizes it. Maxwell Marlow is Director of Research at the Adam Smith Institute.