Social value has played a role in public sector procurement since the Social Value Act 2012 was enacted. However, it didn’t carry much weight until the National Social Value Task Force introduced TOMs (Themes, Outcomes, and Measures) in 2017.
The National TOMs Framework was a system that provided a minimum reporting standard so that public sector buyers could identify and measure the social value in procurement contracts. It was on the clunky side and in need of refinement.
Procurement reform
This came in the form of the revised Public Procurement Bill, which made the inclusion of social value mandatory rather than voluntary. It placed far more emphasis on social value and its importance in government tenders.
As a result, social value initiatives require proper planning, implementation, management, and monitoring. Moreover, local authorities want evidence that the plan has reached its desired outcome and suppliers can maintain their standards.
We’re going to look at the role of social value in procurement and why suppliers must put in much more than a token effort to win public procurement contracts.
Choosing A Social Value Project
Social value projects are divided into three categories; social, economic, and environmental. However, suppliers can’t just choose a category and any sub-category they like. The theme depends on the local or central government departments concerned.
Typically, public bodies want projects related to their operations, so a buyer who produces packaging made from recycled materials might want their suppliers to focus on cleaning up the local community.
Public procurement suppliers can create a project that meets specific social value criteria. Taking the example above, litter pick-up and recycling days or training in urban waste management provide community upliftment and environmental benefits, which more than meet social value requirements.
Examples of social, economic, and environmental social value initiatives
Sometimes one’s brain stalls when the success or failure of a bid rests on one essential factor. Here are some examples that you can use as inspiration or a launching pad for ideas that match public sector organisations’ requirements and your skills.
Social
- Enhance existing community projects. Implement upliftment projects for the homeless.
- Introduce care services to aid and protect vulnerable and ageing community members.
- Join the fight against crime by supporting the local neighbourhood watch with new high-vis clothing and personal safety equipment.
Economic
- Host career days for jobs within your field or open a career centre that provides more detail on employment opportunities in procurement services. Increase the benefits with some basic (on-the-job) training.
- Support local businesses by incorporating them into your procurement processes.
Environment
Provide as many environmental benefits as possible to combat the effects of climate change.
- Recycle waste material and promote recycling in the community.
- Off-set carbon emissions by using greywater or planting some trees in a local park.
Why Suppliers Must Invest In Social Value Projects
We’ve mentioned that social value is a requirement in all public sector tenders, but how much time and effort must you invest in projects? The answer: A fair chunk.
Procurement regulations say that social value should have a minimum weighting of 10%. However, it’s not unusual for public services buyers to assign greater importance to social value, setting their requirements at 20% – 30%. Some buyers and key stakeholders in the procurement process prefer even higher ratings in the region of 40%.
The importance of a social value plan
It’s necessary to provide a strategy that very clearly details how your business is going to implement the plan and reach its goals. You also need to give detailed information on the goals, as well as the key performance indicators (KPIs) that will measure the success of each stage of the project.
Essentially, this means that if you don’t have a good, well-thought-out social value plan, you’re less likely to win tenders and provide services or products to the government’s commercial activities.
Let’s look at some numbers
It’s been found that 77% of consumers choose companies that have readily embraced a social value culture. Furthermore, 73% of investors choose companies, including public services providers, that have established social value programmes in place.
They’re particularly fond of businesses that provide environmental benefits. This is evidenced by the fact that 66% of global consumers say that they’d happily pay more for products/services/works that have good sustainability credentials.
With numbers like this, you want to get on the social value bandwagon as soon as possible.
Take Your Cue From The Social Value Model
The Social Value Model shows which type of projects the government favours. It contains many ideas and examples, so it’s a great source of inspiration. The model is set out in the table below.
What is social value tendering?
It goes a step further and breaks policy outcomes into Model Award Criteria (MAC). We’re just going to look at the first two themes in the social value model.
Theme 1 has one policy outcome – help communities recover from the after-effects of COVID – and five MAC. These include enabling businesses to recover from the negative impact of COVID with a particular focus on re-training and job creation.
Theme 2 has two policy outcomes, each of which has its own set of MAC.
- The first policy outcome – new businesses, jobs, and skills – has three MAC. These include training and job creation in industries with skills shortages.
- The second outcome – supply chain resilience – has five MAC. These include supporting innovation to improve the quality of the goods/services/works and/or lower production costs.
As you can see, there’s a lot of emphasis on job creation and training. It makes sense to build a project around those themes or at least come up with different ideas in anticipation of a contract – your plans A, B, C, D … if you will.
How successfully do you deliver social value services in your relevant area?
While social value plans are important, even more important is their performance.
- How well were projects integrated into local and central government contracts?
- How well did you deliver services?
- What tools did you use for measuring social value?
- What reporting metrics did you apply to measure success?
This is important because you will likely have to deliver progress reports to key stakeholders to prove the project’s effectiveness and worth within the community.
Your plan must continue to generate social value benefits over the long term. For instance, it must be sustainable so that it continues to address economic inequality or secures the environmental well-being of the local community.
In doing so, you build a reputation for insight into social, environmental, and economic well-being, which makes you a major presence in the supply pool.
You Come Up With The Plan, We’ll Come Up With The Contracts
Altruism aside, the great thing about social value is that it opens the public sector to more suppliers, especially SMEs. The focus on value rather than price levels the playing field and can even give SMEs the edge because they can be more flexible and adaptable to meet public procurement contract requirements.
SMEs can also band together and bid on large, lucrative contracts because, united, they can supply everything the buyer needs and propose a comprehensive plan that provides additional social benefits beyond the ability of one big business.
SMEs can find these lucrative (and lower value) contracts on Sup ply2Gov’s database. S2G has the most extensive database of public sector procurement contracts in the UK and Ireland. It even outdoes the government when it comes to publishing tenders. It doesn’t matter what the sector, we have contracts almost guaranteed to meet your specialty.
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