What is Social Value, and why does it matter to you?
Buyers in the public sector must abide by The Public Services (Social Value) Act 2012, which seeks to ensure public spending creates social welfare and improves community wellbeing. These benefits are broadly grouped into three categories:
- Economic (e.g. employment or apprenticeship/training opportunities),
- Social (e.g. activities that promote cohesive communities) and
- Environmental (e.g. efforts in reducing carbon emissions)
By being able to consider social value when selecting suppliers, the Government believes it will ensure taxpayers’ money goes further, as well as creating new jobs and skills to drive economic growth.
This matters to your organisation because to win and maintain public service contracts, your organisation needs to include clear social value statements in your bid submissions relating to these topics and invest and act upon these commitments during the implementation and delivery of the contractual service.
The Public Services (Social Value) Act 2012 and recent updates
In the last 12 months we have seen the publication of the Cabinet Office Green Paper ‘Transforming Public Procurement’, the subsequent central government commercial function ‘Social Value Model’ and revised ‘Sourcing Playbook’, PPN 06/20, and the latest National Social Value Measurement Framework (known as TOMs) which was endorsed by the Local Government Association’s National Social Value Taskforce.
Additionally, the Procurement Bill referred to in the Queens Speech is expected to be introduced from September 2021. This bill builds on those recent publications and follows a consultation on the Green Paper, aiming to consolidate the current 350 public Procurement regulations spread over different regimes into “a single uniform regime”
Which is to say – there has been a lot of talk about Procurement and social value recently, which is confusing for organisations to keep up with, understand and correctly interpret in bid submissions and delivery activity.
Why is it changing?
Back in 2015 Lord Young published a review of the Social Value Act which highlighted inconsistencies and a lack of awareness in how the Act was applied in Procurement. Since then, individual groups have sought to develop clearer ways of delivering the benefits the Act seeks.
It is fair to say local government led the charge, probably because they see the community impacts of social value more directly. Areas such as Manchester have been specifying 20% of tender scores towards specific, localised social value outcomes. But even in local government that adoption has not been consistent, with many public sector buyers including vague/ generic social value questions which carry low scores, or in some cases are even just ‘for information only’ – up to now that has been allowable as the 2012 Act mandates ‘consideration’ of social value, but not ‘evaluation’.
The climate crisis, COVID19, and emerging social challenges have all brought the need for a greater focus on social value and by adopting the term ‘best social value for money’ instead of the historic ‘value for money’, we are seeing a shift which will affect all Procurement in the UK moving forward.
Key things to know
Though each recent and upcoming publication has its own unique focus and criteria, there are consistent factors which will affect future procurements:
- Meaningful scoring for Social Value – The Green Paper proposes a consistent focus on the three aspects of social value, and the Social Value Model has specified that from January 2021 all central government procurement must allocate at least 10% of the overall awarding score to social value. This, along with other commitments, will be included within the upcoming National Procurement Policy Statement (NPPS).
- Quantified Measurement of Impact – The TOMs and the Social Value Model both define a set of social value ‘themes’ which must be considered; each also goes a step further and defines quantifiable commitments and metrics which can be used to measure and compare tenderers. That means whatever social value you offer needs to be a quantifiable commitment, and it must come with a logical process through which you can deliver it.
- ‘Most Advantageous Tender’ – The Green Paper proposes that UK procurement transition away from the historical use of Most Economically Advantageous Tender (MEAT) to adopt Most Advantageous Tender (MAT) instead. This deliberate change is designed to reframe our understanding of value within a tender, further disconnecting evaluation from the price-oriented mindset to create “a more sophisticated understanding of different types of value”.
- National vs Local – Central government will be training 4000 commercial officers in the new Social Value Model. However, as the Social Value Model and its themes become more widely adopted, expect to see conflict between the demonstrable social value commitments sought by central government and those desired locally: the Local Government Association has raised concerns about dissonance between national policy and local need, and individual commercial teams will be interpreting this differently as the new practice emerges.
What does this specifically mean for you and how to design your value statements
Public procurement buyers are going to be looking for clearly defined, quantified, and deliverable social value commitments from future submissions. You can no longer rely on a template social value statement – instead each tender will now expect a focussed set of commitments for that contract/ project.
It is likely the buyer will be using a consistent external framework to measure and benchmark your commitments in these areas, whether that is TOMs, The Social Value Model, or their own set of commercial equivalencies. You must take the time to understand that specific framework and how the commissioner is using it, otherwise your social value offer and value statement will not meet their expectations.
You must also ensure that the social value commitments you are making are outside the ‘core deliverables’ of your service. For example, a service commissioned to provide employment support to a deprived community would not count those hours of support as social value, but their wider recruitment and training of staff for the contract may represent social value.
Finally, commitments must be about action, not just policy. Buyers will be much more vigilant in identifying ‘deadweight’ commitments i.e. offers which are just regular activity for your business. The social impact you describe must relate directly to future activity being procured – showing the additionality and benefit which arises alongside the contractual service commitments.
In summary, 2021 started with the introduction of the Social Value Model for central government in January, and in September the Procurement Bill could impose that across all public sector spending. This could supersede the TOMs and other local approaches to scoring social value which are growing in popularity among local government and healthcare buyers.
This may well be the year we start to see consistent and meaningful consideration given to social value in public sector tenders. The result of this might lead to “fundamental cultural shift in behaviours and attitudes“ the Government Commercial Function sees across its suppliers. But we foresee considerable confusion and some stumbles along the way as buyers learn to redefine value in their tenders.
* To access the current TOMS list of measures that your commissioner may use register here, or for an initial idea of them you can use this earlier link to the 2019 TOMS. To view the list of measures within the Social Value Model which your commissioner could select from refer here.
Marr Procurement is a Procurement Consultancy focused since 2015, on supporting the Care, Charity and Social Housing sector, and is a key partner to VODG members providing advice and delivery on all their procurement needs.
Marr Procurement work in partnership with bid specialists Tenders-UK, the UK’s leading tendering support company, to provide support and advice on bid submissions including social value statements/ responses. In the coming months Marr Procurement and Tenders-UK will be jointly running webinars on Social Value in Tendering which will be free to attend for VODG members.
Please get in touch with James Ball at Marr Procurement to register your interest in attending a webinar, or to discuss your Procurement and/or bid submissions needs.