With all public bodies and local authorities now obliged to take social value into account during the procurement process for contracts over £180,000, it is essential to create an excellent, well-rounded, social value response when writing a bid or tender.
Since the writing of this blog, a new social value model has been introduced, with minimum weightings for social value at 10% from January 2021. Read the updated advice from 2020 here.
What is Social Value?
The Public Services (Social Value) Act, which came into force in 2012, defines social value as improvements to the ‘economic, social and environmental well-being of the relevant area’. This act outlines the need for contracting authorities to promote ethical and sustainable procurement, and since the Act came into force, tenders have often included questions related to social value or corporate social responsibility. Some typical areas in which you can offer social value include:
- Employment or training opportunities
- Work experience placements
- Employing a local workforce
- Reducing impact on the environment
- Engagement with schools to promote sustainability
- Ethical supply chain, including supporting SMEs
- Helping disadvantaged people to access employment or training
- Supporting community projects
- Charitable donations
Calculating Social Value
Social value is all about the buyer gaining a real, tangible return on their investment in your organisation. Recent submissions have gone above and beyond asking tenderers for a general overview of the benefits they can provide, and now often require an indication of something more measurable. For example, housing providers have recently adopted use of the HACT Social Value Calculator, which asks companies to download a spreadsheet tool where they can input specific information and generate evidence of value for money. The calculator provides a basic assessment of the actual value delivered through your proposed schemes in terms of social impact. As a result, you will be able to provide a ratio of how many pounds you will generate in social value, for the amount of money gained through the contract or framework.
Different authorities will have their own methods for calculating social value, but tools such as this can be extremely helpful when determining the commitments your organisation can offer.
Creating Social Value Responses
Social value responses can vary widely based on buyer expectations or the specific needs in that local area. However, some important things to remember when developing any social value response are:
- Be specific! It is important to include concrete commitments within your bid by quantifying the number of opportunities you can offer; for example, referring to the industry-recognised accreditations or qualifications local people will gain through the schemes you offer.
- Always read the question! It is not enough to simply look at a social value question and immediately begin writing about the charitable donations your organisation has made in the past. The majority of social value questions ask you to cover specific themes, and request a statement of the social value benefits you will deliver on this specific contract that you are bidding for.
- Don’t make false promises! Only make social value commitments that you can realistically deliver. Often, authorities will hold you to the pledges made in your tender, and overestimating what you can offer could have a costly impact on your business in the long term.