There are various more complicated and detailed definitions around; for example, Social Value UK (and Social Value International) defines it as:
“..the quantification of the relative importance that people place on the changes they experience in their lives. Some, but not all of this value is captured in market prices. It is important to consider and measure this social value from the perspective of those affected by an organisation’s work”.
Every organisation makes an impact. Some impacts are negative, for example, pollution or poor working conditions. Some social value impacts are positive, including providing employment, developing a supply chain and training the next generation of apprentices. Some impacts are planned and some are unplanned. Many of the most positive organisations were doing it long before the concept of ‘social value’ came along – they are simply “doing the right thing”.
Some organisations have more interest in social value than others. Government receives money from citizens in the form of taxes (corporation tax, employment tax, sales tax, income tax, property tax – it all comes from you and me); and “society” (citizens, or you and me) want to know that the money is being spent on impacts that we consider positive.
Many other organisations in the public sector that are funded by the government, such as local authorities, Housing Associations, NHS and Arm’s-length bodies and any organisation which uses European Procurement rules are subject to the Public Services (Social Value) Act 2012. This requires public authorities to take into consideration the social value contribution of their suppliers during the procurement process.
These organisations represent around 40% of all contract spend in the UK, and potentially a higher proportion of b2b (business-to-business) spend [see also “Treasury Green Book“]. The invitations to tender issued by these organisations request that businesses demonstrate social value contribution and will monitor it during contract delivery. This usually includes the supply chain, so even if you don’t tender for government or public services contracts but your customers do, you may be affected.