The Public Services (Social Value) Act was designed to encourage those commissioning public services to think beyond short-term financial costs, to how they could use their contracts to drive more value for local communities.
Five years on from its introduction, the Act is making a difference. Last year around £25bn of annual public sector procurement spend was shaped by the Social Value Act, leveraging activities worth many millions of pounds more to local communities and local economies. From training and apprenticeships to supporting local businesses and charities, from improving the environment to helping people with disabilities into work, from employing ex-offenders to tackling homelessness – and much more – the Social Value Act is a good news story. But it could be even better. Because £25bn represents less than 10% of the £268bn of our tax money which is spent by the public sector on procurement each year.
Why such a low take-up? Well, in part it’s due to the fact that the Act applies only to services, not goods (though it must be said that Lord Young’s 2015 review of the Act encouraged the application of its principles beyond the letter of the law). But I believe that a bigger reason is the still-patchy understanding among public sector procurement teams and the companies serving them, about the Social Value Act, and how it can be applied to leverage more value.
I think this is largely down to the incredibly difficult task of measuring social value, and comparing one company’s social value offering to another’s. Sure, it’s easy to measure inputs, like the amount of money invested, or outputs such as numbers of apprenticeships, or work experience hours. But how do you calculate the potential impact of these programmes on individual young people? And if you are setting output targets, how do you move contractors away from easy interventions to those which are likely to have more impact? At Willmott Dixon we know all too well that giving a school or college leaver a taste of the world of work is far easier and less resource intensive than helping a young person about to leave the criminal justice system, but the latter, if successful, will have a much bigger impact on the individual, their family and society as a whole.
Luckily, when it comes to measuring, some great minds have risen to the challenge. NLGN’s Innovation Briefing, which will launch imminently, provides an update on some of the thinking so far, through inspirational case studies from local authorities up and down the country.
From wage and productivity stagnation to inequality and lack of community cohesion, our country faces significant pressures. Social value is the ultimate in ‘charity begins at home’. In these cash-strapped times, public sector procurement bodies could make a big difference by embracing the principles of the Act. I hope this blog encourages more people to try.