The Public Services (Social Value) Act 2012 requires commissioners of public services to consider how they can secure wider social, economic and environmental benefits. The Act is intended as a tool to help the public sector get more value for money out of procurement. It also encourages them to reinvest and work with their local provider market or community to design better services, and to seek new and innovative solutions to problems.
Social Value UK (formerly the SROI Network) describes social value (SV) as the value that stakeholders experience through changes in their lives. Some but not all of this value is captured in market prices offered by services provided by third parties. Social Value UK emphasises the importance of considering and measuring this SV from the perspective of those individuals and communities affected by an organisation's work. SV asks the question: "If £1 is spent on the delivery of services, can that same £1 be used to also produce a wider benefit to the community?"
SV asks the question: "If £1 is spent on the delivery of services, can that same £1 be used to also produce a wider benefit to the community?"
Since the Act was implemented in early 2013, the government produced the One Year On Report (PDF,0.19MB) in 2014, setting out how commissioners are using the Act so far, and pledging support for delivery of better value for money in public services in the future. The report noted that the public sector is increasingly thinking innovatively about SV, and that the shift had been organic and locally-led, supported by a range of non-governmental activity, rather than one prescribed by Whitehall.
While including a series of useful case studies, the report also listed these common barriers to action, it showed that some public sector authorities:
- are yet to be inspired as to the potential of embedding SV in the work that they do;
- are held back by uncertainty as to what they can and cannot do under the law;
- find it difficult to understand how to implement SV and more importantly how to measures the success of SV in the local community;
- have access to lots of material and activity to help them understand how to embed SV in their commissioning processes, but some see this support as fragmented and difficult to access;
- some third party providers who could bring added SV to the table find it difficult to demonstrate that added value to their public sector clients.
In our experience, many public sector authorities and service providers are still facing those barriers two years later. There is usually no lack of enthusiasm from providers, both private sector and voluntary, community and social enterprise (VCSE), but they often find that organising and demonstrating the SV they create can be challenging and difficult to report the impact.
Supporting our clients, whether public or private sector, to deliver SV is increasingly important, and it's an area where we can bridge the gap between procurement and support for the local community.
For businesses, SV can be seen as a route to competitive advantage and a way to add value through procurement – both through their own activity when they are commissioned (by government or the private sector), and through their supply chain when appointing their own sub-consultants.
Supporting our clients, whether public or private sector, to deliver SV is increasingly important, and it's an area where we can bridge the gap between procurement and support for the local community. Our corporate social responsibility CSR values have been synergetic with Scape's commitment to supporting local communities. As we reach the end of our four-year AMSandDS framework with Scape Procure, Faithful+Gould is reflecting on the SV achievements and lessons learned during our tenure.
Our commitments to the AMSandDS framework includes working towards ongoing local supply chain management; achieving robust targets for local spend and local labour usage; work experience programmes; school and college visits; community engagement initiatives; adult employment opportunities; apprenticeship programmes; training schemes; professional and academic qualifications; and best practice health & safety standards.
Scape Group places socio-economic development at the heart of its activities and requires all framework partners to be socially responsible, with SV focused commitments flowing through the end-to-end process of whole service delivery.
Scape Procure frameworks provide an ideal way forward for many organisations to address the SV agenda. This framework model brings a structured approach to achieving social and environmental benefits throughout a commission, and importantly, it makes it possible to embed these principles throughout the supply chain.
A major benefit is that the model allows small and medium sized enterprises (SMEs) to be part of a larger supply chain, thus maintaining their fair access to the market. SV is of growing importance to SMEs but they typically face challenges in delivering and demonstrating it in isolation. Through collaborative supply chain working we can support SMEs to succeed on this agenda – and this is also important for the public sector authorities, who actively want to engage SMEs but must also consider an SME’s ability to help them meet the provisions of the 2012 Act.
Aligning SV aspiration with delivery partner relationships also helps alleviate local government budget cuts. Authorities will find it increasingly difficult to stretch their resources, and pastoral portfolios – support services and those associated with education, social housing, health, children's services and elderly care – are the most likely to be cut.
With this continuing austerity, the relationships between local government, its communities and its supply chains will change. The interaction between projects will be as important as the delivery of commissions. This can only be achieved where client/supplier relationships are strong and where there is a pipeline of projects that support a structured SV delivery agenda.