Social Value Seven Years On
by Mark Stead
Director, Building Consultancy
It's now seven years since the Public Services (Social Value) Act came into force, requiring those who commission public services to consider how their procurement can instigate broader social, economic and environmental benefits.
Last year, the Cabinet Office carried out public consultation to understand how well the Act was working. Key considerations included whether a set metrics should be established for social value and whether legislative terminology should take a stronger tone.
The Act aimed to initiate smarter procurement.
In a climate of reduced local authority budgets and austerity, social value provided procurement teams the opportunity to secure greater value for money, reducing the strain on public services, boosting local economies and improving community wellbeing.
However, since its introduction, both procurement teams and tenderers have struggled to understand how social value should be classified, communicated and measured. Every local authority has different regional priorities that define what is most ‘socially valuable’ to them.
Much of the uncertainty has been caused by the lack of a universal standard for measuring social value.
There is no definitive list or approved tick box for procurement teams or suppliers to work from. Social value measurement must be flexible to allow for regional variances, but the lack of clarity means that procurement teams are not comparing like-for-like. This makes it difficult to evaluate one tenderer’s value against another’s.
To combat this, a range of measurement tools and systems have been introduced to the market in recent years. These tend to assign proxy values to a range of social value activities, based on regional statistics. However, even these measurement tools are divided between using objective fiscal measurements and more subjective wellbeing measures, debating which presents a truer representation of value.
For most organisations engaging in public sector procurement, a simple review of their day-to-day activities through a social value lens would be invaluable.
Most suppliers and service providers are unconsciously providing social value. This may be through local employment and training opportunities, engaging with education providers, supporting VCSEs and SMEs or making environmentally conscious decisions in their business operations.
Rather than trying to invent one-off social value feats and think too far outside the box, most organisations would be better;
- Allocating an individual or group responsible for their social value strategy;
- Getting input from employees – what social value are they already delivering to their public-sector clients?
- Upskilling staff;
- Researching and engaging with local communities and authorities to ascertain their priorities;
- Identifying where social value is naturally being delivered through business operations, utilising their business’ expertise and specialist skillset.
Identifying the types of social value activities that fit most naturally with your business should also help to ensure successful delivery.
Beyond tender stage, another issue brought on by the introduction of social value to public procurement has been the difficulty in monitoring the successful delivery of tender-stage commitments. Without evidence, suppliers can’t prove that their pledges have been met, and local authorities can’t report back to national government.
In response, project and framework management teams are employing dedicated personnel to monitor the delivery of social value, with some including these commitments as part of suppliers’ contractual obligations.
The hope is to eradicate the overstatement of social value during the tender process, encourage realistic commitments and ensure value is delivered. It’s no longer enough to say it, suppliers need to prove it!
If the development of social value in public procurement over the last seven years can be considered a precedent, the next seven should see further change.
The government has acknowledged the limitations of the Act and announced plans to expand its powers, insisting that social value be an explicit part of the evaluation process, rather than just a consideration. Some local authorities are increasing the evaluation weighting allotted to social value to 30%, making it a deciding factor in the procurement process and a means for some organisations to demonstrate a competitive edge.
As such, it’s never been more important for private sector businesses to understand and support the drive for social value.
Mar 25th 2020