PROPERTY JOURNAL

Embedding Social Value in contract procurement

The public sector is setting a positive example by considering economic, social and environmental well-being in procurement contracts

Author:

  • Nancy Towers

05 April 2020

The Social Value Act 2013 was designed to maximise the value of procurement spending in the public sector, encouraging professionals to look beyond financial value and consider the social and environmental impact of a purchase.

The legislation has taken a few years to become embedded, but now evidence shows that social value clauses are increasingly common and play a significant role in decision-making. Central government departments are committed to including social value clauses in all contracts, and assigning a 30 per cent weighting to the social value question is not uncommon in local authority contracts. It’s increasingly likely that your response to such a question may well determine whether you are awarded a contract or not.

What is social value?

The act is designed to be flexible, so social value priorities can be agreed by the local authority commissioning body and reflect what is important for its residents and area. In the most successful cases, social value priorities echo the corporate priorities of the commissioning authority.

For example, Wirral Council has twice the number of children in care compared to the national average, and 45 per cent of those leaving care in 2013 were not in education, employment or training. Addressing these issues is central to its corporate strategy, and it has done so by using the apprenticeship levy as well as social value clauses in contracts to encourage providers and suppliers to offer support and employment to care leavers.

Recent research by national campaigning body Social Enterprise UK has found that, despite an increasing understanding of social value in local authorities, measuring and communicating social value still presents challenges. However, as the weighting that commissioning bodies give social value increases, they will need to be more strategic, robust and transparent in their approach to measurement and contract management, and providers and suppliers will also need to be ready for this.

The Salford Social Value Alliance’s Ten Per Cent Better Campaign is a great example of what can be done: it set a range of targets to achieve through procurement, such as ten per cent more local spend and ten per cent more active residents, with clear baselines and priorities for its social value clauses that providers must fulfil.

Measuring social value

There’s an ever-growing array of social value measurement tools, which can be confusing to navigate. The Themes Outcomes Measurement framework and the Housing Associations’ Charitable Trust social value bank calculator are increasingly prevalent, both ascribing a financial value to social value interventions.

Though these tools might be useful to kick-start a measurement approach to social value across a system or organisation, they can be expensive, clunky to use, and can limit innovation and customisation of social value priorities for an area.

You don’t need to make it complicated, particularly if you are a small business: look to national network Social Value UK for guiding principles, decide what meaningful change your social value offer will make and measure that.

The quality and impact of apprenticeships or reductions in carbon footprint, for instance, are two of the most effective and easily quantifiable measures of social value.

But the most crucial question is whether an increasing emphasis on social and environmental outcomes will improve your business. There is growing evidence that it builds a more effective local economy, and on an individual level changing the way you do business can improve your operations.

Increased productivity and social value

In the course of our recent research at Social Enterprise UK, we spoke to a number of businesses that said not only were they winning more bids because of their approach to social value, but they had also increased their productivity.

One company had for instance introduced a quota of volunteering days, allowing employees to contribute to community projects on days of their choosing, and this had reduced staff absenteeism and increased productivity.

If you need more persuasion that your business should consider social and environmental issues, The Deloitte Global Millennial Survey 2019 found that the younger generations seek to buy from and support companies that align with their personal values. It therefore makes increasing sense to invest in environmental and social impact to futureproof your business.

nancy.towers@socialenterprise.org.uk

PROPERTY JOURNAL

Embedding Social Value in contract procurement

The public sector is setting a positive example by considering economic, social and environmental well-being in procurement contracts

Author:

  • Nancy Towers

05 April 2020

The Social Value Act 2013 was designed to maximise the value of procurement spending in the public sector, encouraging professionals to look beyond financial value and consider the social and environmental impact of a purchase.

The legislation has taken a few years to become embedded, but now evidence shows that social value clauses are increasingly common and play a significant role in decision-making. Central government departments are committed to including social value clauses in all contracts, and assigning a 30 per cent weighting to the social value question is not uncommon in local authority contracts. It’s increasingly likely that your response to such a question may well determine whether you are awarded a contract or not.

What is social value?

The act is designed to be flexible, so social value priorities can be agreed by the local authority commissioning body and reflect what is important for its residents and area. In the most successful cases, social value priorities echo the corporate priorities of the commissioning authority.

For example, Wirral Council has twice the number of children in care compared to the national average, and 45 per cent of those leaving care in 2013 were not in education, employment or training. Addressing these issues is central to its corporate strategy, and it has done so by using the apprenticeship levy as well as social value clauses in contracts to encourage providers and suppliers to offer support and employment to care leavers.

Recent research by national campaigning body Social Enterprise UK has found that, despite an increasing understanding of social value in local authorities, measuring and communicating social value still presents challenges. However, as the weighting that commissioning bodies give social value increases, they will need to be more strategic, robust and transparent in their approach to measurement and contract management, and providers and suppliers will also need to be ready for this.

The Salford Social Value Alliance’s Ten Per Cent Better Campaign is a great example of what can be done: it set a range of targets to achieve through procurement, such as ten per cent more local spend and ten per cent more active residents, with clear baselines and priorities for its social value clauses that providers must fulfil.

Measuring social value

There’s an ever-growing array of social value measurement tools, which can be confusing to navigate. The Themes Outcomes Measurement framework and the Housing Associations’ Charitable Trust social value bank calculator are increasingly prevalent, both ascribing a financial value to social value interventions.

Though these tools might be useful to kick-start a measurement approach to social value across a system or organisation, they can be expensive, clunky to use, and can limit innovation and customisation of social value priorities for an area.

You don’t need to make it complicated, particularly if you are a small business: look to national network Social Value UK for guiding principles, decide what meaningful change your social value offer will make and measure that.

The quality and impact of apprenticeships or reductions in carbon footprint, for instance, are two of the most effective and easily quantifiable measures of social value.

But the most crucial question is whether an increasing emphasis on social and environmental outcomes will improve your business. There is growing evidence that it builds a more effective local economy, and on an individual level changing the way you do business can improve your operations.

Increased productivity and social value

In the course of our recent research at Social Enterprise UK, we spoke to a number of businesses that said not only were they winning more bids because of their approach to social value, but they had also increased their productivity.

One company had for instance introduced a quota of volunteering days, allowing employees to contribute to community projects on days of their choosing, and this had reduced staff absenteeism and increased productivity.

If you need more persuasion that your business should consider social and environmental issues, The Deloitte Global Millennial Survey 2019 found that the younger generations seek to buy from and support companies that align with their personal values. It therefore makes increasing sense to invest in environmental and social impact to futureproof your business.

nancy.towers@socialenterprise.org.uk

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