Social value in commissioning and procurement is important because it considers the role of spending on services to improve economic, social, and environmental wellbeing in an area. These often have long-term benefits to local communities but are not widely considered in typical procurement processes, because almost by definition they relate to outcomes that tend to be difficult to quantify.
The Social Value Act, implemented in 2012, requires all public services to consider social value in their commissioning and procurement processes. Within councils, social value is even more important now given the funding cuts and resources constraints facing local government. Councils need to find new ways to maximise benefits of existing spend and make the resources they do have go much further.
There is an opportunity to mainstream and extend the benefits of the Act still further but there are three main barriers. NLGN’s latest Innovation Briefing explores these challenges and provides some crucial insights on ways to address them.
Firstly, as Sarah Fraser (Willmott Dixon Foundation) recently pointed out in her blog, only 10 per cent of public sector procurement spend was shaped by the Social Value Act. There is a lack of awareness about the practical steps in embedding social value. For example, in some cases, we found that local suppliers are in fact already addressing social value in the tendering process without necessarily realising it. But with more awareness about the wider benefits of social value, councils can better tap into this potential of maximising the benefits of social value through increasing uptake.
A second challenge in embedding social value more widely in local government is the common misconception among some councils about the Social Value Act, with some teams seeing it as a ‘luxury’ rather than a necessity. This dominant culture amongst some councils is in part due to the difficulty of implementing and embedding social value including the complexity of measuring social value.
Finally, the lack of wider engagement is a major barrier to the aim of mainstreaming social value in councils. The lack of buy-in from key individuals and teams within the council has been shown to have a significant impact on the progress of the implementation of social value in local authorities.
NLGN’s latest Innovation Briefing gives some new insights into best practice based on the experience of procurement teams within councils. One of the practical steps highlighted by the teams we interviewed was the importance of active engagement with other departments and with council members.
Despite the challenges highlighted above, our recent research shows a growing awareness among councils of the benefits of social value to local areas and economy. Councils are looking for ways to extend the impact of the Act, and to mainstream social value within their councils. But more needs to be done to shift the culture of procurement from one which is process-focussed to one more geared towards enabling social impact. This would mean that in the future, social value is increasingly seen not as an ‘added value’ but a necessity – a vital route to impact in light of continued budgetary restrictions in local government. Designing an approach that is as simple and straightforward as possible is critical in increasing uptake and encouraging varying-sized suppliers to bid.
The latest NLGN Innovation Briefing on Measuring Social Value was launched in January 2018 and is available exclusively to our members. For more information about the range of benefits of joining out community of innovative councils, please contact Richard Nelmes, Head of Network, on firstname.lastname@example.org.