Why the legislation change is needed?
The Public Services (Social Value) Act 2012 put a legal obligation on the public sector to consider how to secure social value in contracts. The Act strengthens the government’s commitment to awarding contracts based on social value rather than value for money.
Currently the Act requires commissioners to only “consider” social value whilst awarding contracts. With tender submissions that include questions related to social value or corporate social responsibility, respondents vary in their approach with many not taking it seriously enough, looking to tick the box rather than fully engage with the issues. Typically, the activities specified fall short on impact analysis resulting in lots of good ideas but not enough on explicit outcomes and long-term impacts.
This is what the extension of the act is set to change. In 2018, Cabinet Office minister David Lidington announced plans to expand the Act’s powers to force central departments to “ensure all major procurements explicitly evaluate social value where appropriate, rather than just consider it”. These changes to procurement practices will boost social value considerations and reduce barriers for small medium enterprises, microbusinesses and social enterprises, as well as protect the continuation of public services in the event of a large contractor collapse.
With government contracts being worth approximately £48bn per year, central government will use the new model to evaluate the social impact of its contracts to outsource public services. This will ultimately lead to boost in the local economy, increased wellbeing, reduction in the use of public sector services for the local community.
We find that many of our clients experience confusion and frustration in setting, measuring and demonstrating their social value goals, having a social value policy with tangible objectives is the first step.
Managing the skills gap that will result?
At Faithful+Gould, we find that many of our clients experience confusion and frustration in setting, measuring and demonstrating their social value goals. The Act has no definitive list of which social, economic and environmental benefits to seek — it’s deliberately flexible, acknowledging that social value should consider each local context. In practice, this leads to a multiplicity of meanings and understandings, even within one organisation.
There are a variety of measurement tools available, The National TOMs Framework provides a minimum reporting standard, as a user-friendly solution that is immediately available and may be applied to any project. TOMs can be used to measure social value (and continual improvement) during the planning and procurement of services, evaluation of bid submissions and throughout contract management. Working with TOMS will not meet the requirements post legislation changes as other factors have now got to be taking into account.
Most procurement teams have had little or no specialist training. David Liddington has pledged to train all 4,000 of the government’s commercial buyers to take account of social value. At the other end of the spectrum those organisations that are more engaged with social value are beginning to penalise providers for not meeting their social value commitments.
To address these challenges, having a social value policy with tangible objectives is the first step. Having determined those objectives, it’s vital to be clear on what is to be measured and why, before exploring how to do the measuring. We find that clients often don’t know what they’re going to do with the data they gather. The methodology, analysis, reporting procedures and feedback mechanisms must be clarified at the outset. It’s important to review the impact of social value activities over the term of the project and beyond. These re-evaluation periods should also be determined at project outset.
These changes to procurement practices will boost social value considerations and reduce barriers for small medium enterprises, microbusinesses and protect the continuation of public services in the event of a large contractor collapse.
Achieving social value commitments
Faithful+Gould works alongside clients to clarify their social value aims and embed these in their procurement and management processes. We have built early-adopter expertise, underpinned by substantial benchmark data, in the explicit evaluation the Act will require.
We pride ourselves in helping our clients use social value to drive planned change, maximising community benefits from every penny spent on public sector projects. Contact us for support with delivering community social value throughout the built environment process.