In a press release in September 2020, the UK Government unveiled its plans to change how public sector procurement would work. The focus, as they explained, was to find ‘social value’ within public sector contract bids.
The article states contract bids will now be assessed on the following:
- Supporting COVID-19 recovery, including helping local communities manage and recover from the impact of COVID.
- Tackling economic inequality, including creating new businesses, jobs, skills and increasing supply chain resilience.
- Fighting climate change and reducing waste.
- Driving equal opportunity, including reducing the disability employment gap and tackling workforce inequality Improving health and wellbeing and community integration.
Taken from gov.uk website
Tenders will no longer be evaluated on how economically advantageous they are but rather how they demonstrate social benefits a specific community will experience, whether through creating more jobs or reclaiming normality after COVID.
The hope is this move will allow the roster of private sector providers who supply government needs to become more diverse. So why does this all matter? How can social value be accounted for within a procurement cycle?
- Why Does Social Value Matter for UK Public Procurement?
- What the Social Value Model Is and How to Apply It
- What Delivering Social Value Looks Like in Practice
Why Does Social Value Matter for UK Public Procurement?
According to the government’s green paper, ‘Transforming public procurement’, price shouldn't be the deciding factor when evaluating tenders:
Public sector commercial teams do not have to select the lowest price bid, and that in setting the procurement strategy, drafting the contract terms and evaluating tenders they can and should take a broad view of value for money that includes social value.
It goes on to say:
The role of procurement is to translate the desired outcomes into the right contracts and select the supplier or suppliers that will deliver these in the way that offers best social value for money.
The new focus ties to the government’s hope to ‘build back better’, securing economic growth, mitigating climate change and helping communities to recover post-COVID. ‘Linking the elements of social value through into procurement is critical to ensuring the social, economic and environmental benefits are delivered through the contract.’
In short, capturing social value is a way of creating better conditions for both procurement and the UK as a whole.
What the Social Value Model Is and How to Apply It
To help procurement professionals secure social value, they can use the Social Value Model. It's a resource through which a procurement team can account for social value within bid evaluation rather than simply considering it.
This model should be consistently used by procurement teams, as it’s a way to maximise the additional social benefits to be found in public sector contract delivery. John Alker, Director of Policy and Places at UK Green Building Council, noted the worth of the Social Value Model:
Government purchasing power has huge potential to unlock benefits above and beyond the work being procured and we have welcomed the Government’s work to strengthen social value in its procurement processes. The Social Value Model and policy note offers an outcomes-based approach and a framework for measuring social value, both of which we feel are critical aspects of a best practice approach to delivering social value.
The Social Value Model covers several distinct themes that can be tackled by the inclusion of social value within procurement:
- COVID-19 recovery
- Tackling economic inequality
- Fighting climate change
- Equal opportunity
- Wellbeing
You can read short summations of these themes and what they entail here.
From now on, procurement teams should reflect on each of these themes, using them as a lens to evaluate the social value inherent in each tender. Procurement professionals should also consult the Guide to using the Social Value Model for more information.
What Delivering Social Value Looks Like in Practice
Since the 2012 Social Value Act, the language regarding social value has changed. This new stance reflects a hardening of policy concerning procurement, changing the idea of capturing social value from a ‘should’ to a ‘must’.
It has benefits for the wider community and helps to safeguard the relationship between local government and suppliers, who'll find that a more level playing field is being created.
In the Procurement Policy Note released in September 2020, it explicitly states:
Social value should be explicitly evaluated in all central government procurement, where the requirements are related and proportionate to the subject-matter of the contract, rather than just ‘considered’ as currently required under the Public Services (Social Value) Act 2012. Unnecessary burdens should not be placed on commercial teams or suppliers.
In practice, this can be approached by:
- Understanding the wider needs of local communities that extend beyond what's directly needed in the contract.
- Ensure all new deals offer social value opportunities as standard.
- Review current deals to identify social value opportunities.
- Accurate measuring of the social value element of all bids received during the procurement process.
To discover the best practices for bid evaluation and what procurement teams should be looking for, you can visit our blog on the topic, ‘Improving Bid Evaluation for the Public Sector’.
We realise procurement and the entire public sector environment are in constant flux, with changes, updates and innovations regularly occurring. For that reason, public sector professionals must stay up to date with the latest changes.
To learn more about these changes and gain insights into the latest trends within the public sector, especially concerning procurement, attend the Public Sector Show 2021.
The Public Sector Show 2021
Get practical advice and case studies around embedding social value in your organisation’s procurement processes at the Public Sector Show on 29-30th June. Tickets are free for the public sector and there’s a whole afternoon agenda track dedicated to sustainability, social value and green procurement.
View the agenda in full below.
