How can the public sector use social value to build back better?

What can public sector procurers and suppliers do today to help prioritise social value and help to build back better? Photo By: Mike Erskine on Unsplash

The UK Government is doing everything it can to help the economy recover from COVID, one thing remains noticeably missing from the steady stream of Treasury announcements, and that’s any reference to social value.

In April, the Cabinet Office advised procurers to pay suppliers quickly to release much-needed cash flow. Last week, the announcement came that it would bring £8.6 billion of capital spending forward. Presumably, the government is hoping the impact of this spending will trickle down the supply chain, but given that a lot of these contracts will be awarded to one of the government’s 34 strategic suppliers, it won’t be enough to announce the expenditure and hope for the best.

The 2012 Public Service (Social Value) Act requires all public bodies to consider how the money they spend on the services they commission can also help deliver wider social, environmental and economic benefits for the communities they serve. Amid a global pandemic, this has never been more important. It would be a real missed opportunity if the UK Government doesn’t insist that the suppliers awarded these contracts offer social and economic value in their bids.

Barriers to change

Increasing expenditure from SMEs and employing local people is difficult for large public sector suppliers. Not because they don’t want to but because their systems and processes aren’t set up to support it. Any value from these contracts is often retained by these organisations (many of whom are headquartered overseas) and dispersed as profits and dividends to their shareholders rather than being passed down into the wider economy. 
 
The Cabinet Office has issued a number of guidance notes for procurers since COVID began, but what’s needed is a guidance note on Social Value, which mandates to all government departments that it should be a priority post-COVID for public sector expenditure. The proposed changes to the Social Value Act should also be urgently reviewed, and the Act should at least be amended to apply to goods contracts and services.

Ideally, we’d like to see public sector contracts have specific social value clauses that offer targeted support to the groups most badly affected by the virus, including charities and organisations that support:

• People with poor mental health

• Older people experiencing loneliness and isolation

• Victims of domestic abuse

• Immigrants

• The homeless

• Unemployed 16-24-year-olds

• People with long-term health conditions who are shielding and the charities who support them

 
In the absence of this, what can public sector procurers and suppliers do today to help prioritise social value and help to build back better?

It won’t be enough to announce the expenditure and hope for the best. Photo by Nick Fewings on Unsplash

5 Tips for Public Sector Procurers:

1. Talk to your suppliers. Emphasise how important social value is to you and discover what they can offer. What are they already doing to support the economy, and what ideas do they have to support people living in the community where the contract is being delivered? Do they have a corporate responsibility initiative that could be refocused? Depending on the size of the contract, what opportunities are there for local content in the supply chain and local job creation?

2. Talk to your third sector and community groups to find out what they need. Did you know, for instance, that 4 in 5 charities have had their funding negatively affected by coronavirus, and mid-sized charities are desperate for resources from businesses to stay afloat? 60% have reduced their key services, and over half of charities say they need strategic help navigating this unknown period. Focus on the organisations serving the communities and sectors most impacted by COVID. To keep costs down, encourage them to ask for relatively easy things to provide. For ideas, see this list we created for Perth & Kinross Council.

3. Review your contracts register and identify procurement opportunities that could match social value initiatives. For example, contracts for anything to do with housing could support initiatives that tackle homelessness, while heating system suppliers could work with programmes addressing fuel poverty. Speak to the category managers of these contracts and make sure they are aware of the needs of your community groups. 

4. Try and include social value in as many of your contracts as possible. You should be considering social value at the start of any procurement process and not just trying to meet the limited number prescribed by the Social Value Act. Liverpool City Council is a great example of an organisation doing this well.

5. Update your Social Value or Community Benefits Policy to consider the impact COVID has had on your region. If you use a points system to score social value, ensure initiatives which support the sectors hit hardest by COVID19 score maximum points. If you don’t have a Social Value Policy, write one.

Here's what you can do if you supply the public sector:

Research relevant organisations and contact them. Find out what they need and design your offer around that. Identify the most disadvantaged groups and use whatcharity.com’s online dashboard to get an idea of charities’ most urgent needs. The most impactful social value is proportional and relevant; it provides resources and skills pro-bono to charities and community groups whose work most aligns with the contract.

1. Don’t take the furlough bonus if you win a contract.

2. Commit to creating a certain % of jobs via the kickstart scheme to employ young people aged 16-24 to help deliver the contract. Work with the Local Authority’s employability support team to identify pathways for young people into employment in your business.

3. Embed a local social enterprise or supported business in the supply chain – this directory from BASE is UK-wide and searchable by location, which makes it a great reference point.

As the Government continues to try and kickstart the economy with tax cuts, spending incentives, cash grants and loans, the public sector can play an instrumental role in maximising the value of this emergency expenditure. Reviewing the Social Value Act in the context of Covid; if organisations consider how money spent on commissioned goods and services can also help those most impacted by the pandemic, it will not only help the value of that money go; further, it will deliver long-term social value and help us all to build back better.

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How we can help

At Samtaler, we understand the importance of your social value commitment. You’re here because you care about the impact your business has on society and want to be better. We want you to succeed, and we know from experience that achieving social value requires skill, strategy, and support.

To find out how we can help send an email to hello@samtaler.co.uk

Sign up to The Social Value Files for inspiration and practical ideas to create social value for your business.

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