The (increasing) value of Social Value
When I first came up with the idea for this Blog in October, I suggested that with the wall-to-wall media coverage of the cost of living crisis, and the latest Tory leadership contest, that most people might have missed the passage of the Procurement Bill (which concluded the House of Lords committee stage last week).
Well, now it’s November and we’ve had a Prime Minister come and go, and a few more existential crises to boot, but that doesn’t mean that the Procurement Bill is any less important. Here’s why…
£1 in every £3 of public money, about £300 Billion a year, is spent on public procurement. That’s why this matters; how government spends that money can create a lot of change, opportunity and, dare I say it, maybe even some good.
Naturally, there are many views on what ‘good’ means. For some, there is an opportunity to exclude corporations connected to oppressive regimes globally, and for others, to ensure contracts do not go to party donor connections. Many see the opportunity for a clearer and more transparent procurement system. I’m not sure any right-minded person would argue with any of these points.
Going beyond that though, in my opinion the most important point is ensuring that Social Value is at the heart of procurement. In September (I know, another lifetime ago!), the NPC think tank warned that Social Value could be overlooked, that value for money should specifically recognise Social Value and commissioners must score contracts with this in mind. The Labour Party conference seemed to endorse this position, making a commitment to ensure that public money “goes back in the pockets of communities”. I personally think that there is little danger that Social Value will be missed out.
Since the austerity measures of the 2010s, commissioners have been pushing companies to offer more and more through Social Value. The Procurement Bill, now in Report stage, will reinforce this trend. At 50 Degrees, we’ve seen increasing priority given to Social Value in the tender process, from 5% weightings (or less) five years ago, to more like 10% today. Tenders have more Social Value questions, and require more in-depth responses and thinking.
Responding confidently to these requirements can be tricky. For SMEs, Social Value can seem like an added cost. For big multi-nationals, Social Value is often wrapped up in corporate social responsibility, which rarely relates directly to meaningful contract level Social Value actions.
So, how do you weave Social Value successfully into a tender response? Here are my tips:
Don’t leave it to the end of the process. In fact, do your Social Value thinking upfront and build it into solution design. What roles will be responsible? How will you structure HR? Can you plan to pay everyone the local Living Wage? What stakeholder engagement is already involved?
Don’t assume that you don’t have a Social Value offer. Maybe you haven’t thought of this before, but if you are an SME, you are probably already doing things around local employment, tailored benefits, community engagement and staff wellbeing. How can you tie these things to the tender opportunity?
Make commitments and be specific. I’m afraid your office recycling bins won’t cut it. Instead, you need tangible benefits for the commissioner. How can you move to 100% renewable energy, and how will you evidence this? How many apprentices can you hire? How many hours of volunteering can you commit to (and with which organisations)?
Make reporting a commitment. Don’t just make a series of promises; tell commissioners how you’ll keep them up to date and share good news and achievements.
A successful Social Value response can already make the difference between a winning and losing bid, and we believe this is a trend that will only continue.
Mark Winter
Managing Consultant