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Social value: what changes are being made in procurement

Social Value

Executive Compass attended a procurement exhibition this week (Procurex North) and one topic that was highlighted across the board was social value: specifically, what is being done by commissioners and many local authorities to embed this into procurement, contracts and tender submissions?

We address the main issues suppliers encounter with social value, and what is being done by contracting authorities to measure social value and ensure it is delivered successfully.

The Public Services (Social Value) Act 2012 came into force in 2013, making it a legal requirement for contracting authorities to consider how social value can be achieved in a procurement exercise. However, this isn’t a new concept and the implications on society, environment and economy have always been significant in procurement – it is important to remember that public bodies have the duty to get the maximum possible value out of every pound spent.

The key issues surrounding social value

The Act has prompted many key issues and confusions:

  • There is a lack of understanding from some suppliers
  • It is applicable to services only, and not products or works
  • There is only the ‘duty to consider’, nothing more
  • There are no official consequences for not considering social value – only the lost opportunity to achieve social value
  • Contract management follow-up is vague, and it is not clear how buyers will ensure suppliers’ commitments are honoured
  • There is legal uncertainty at the SQ and ITT stage of the procurement process.

To provide more transparency, the Social Value Taskforce was formed to provide further information and practical guidance of how to apply the Act and what the real benefits are. They provide a steer on social value as well as supplier engagement workshops and feedback events.

The contributors to the Social Value Taskforce are:

  • Birmingham City Council
  • Bristol City Council
  • Cabinet Office/DCMS
  • Colchester City Council
  • Coventry City Council
  • Cornwall County Council
  • Crown Commercial Services
  • Dudley Council
  • Durham Council
  • Greater London Authority
  • Greater Manchester Combined Authority (GMCA)
  • Halton Borough Council
  • Local Government Association
  • London Fire Brigade
  • NEPO
  • Network Rail
  • NHS Halton CCG & LA
  • ORBIS (Surrey and East Sussex, Brighton and Hove)
  • Sandwell Council
  • SCAPE Procure
  • Social Value Portal
  • Solihull Council
  • Star Procurement
  • Supply Chain Future
  • Walsall Council
  • West Midlands Combined Authority (WMCA)
  • Willmott Dixon Foundation
  • Wolverhampton Council
  • YPO

How to measure social value

Key measurements have been developed that can be used by both public sector buyers and by suppliers to measure social value and your involvement.

The Social Value Taskforce Maturity Index is one method for determining where you are on the journey compared to your competitors, so you understand what the next steps are to integrate social value into your core business functions. There are 10 main themes included.

National TOMs framework

Many councils have their own matrix for measuring social value, but the National Themes, Outcomes and Measures (TOMS) Framework is being used more and more frequently to enable consistency. This was set out to provide a minimum reporting standard for measuring social value. It has been designed around five principal themes, 18 outcomes and 35 measures.

The framework can be used to measure social value (and continual improvement) during the planning and procurement of services, evaluation of bid submissions and throughout contract management.

There is currently consultation around the National TOMs 2019, as the framework is evolving regularly to reflect changing needs.

Social value in SQ and ITT questions

Buyers must signpost possible suppliers to what is most important to them in the procurement process if they want to attract high-quality and relevant social value responses. Specific outcomes and measures relevant to the buyer’s priorities may therefore be given greater prominence or weighting in the evaluation, allowing them to focus the social value section of tenders on achieving key aims.

The SQ selection stage will generally see no more than three questions associated to social value and will focus on outcomes achieved to date, whereas the tender stage will ask for forward-looking proposals against local social value outcomes. This must be achievable and relevant to the contract in question.

Good practice states anywhere between 5% and 20% should be associated to social value relative to the contract value, i.e. 5p–20p in the £1 should be going directly to the community. However, authorities are increasingly interested in social value, such as the Greater Manchester Combined Authority who have increased this value to more than 20%.

For assistance with social value questions in your SQ or tender response, contact our team today. We will be happy to discuss how we can help to ensure you are securing the most marks available for social value.

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0203 507 0314 or direct to mobile: 07590 276 006