Social Value & Procurement

Geek that I am, I today attended a webinar on “Levelling Up”, hosted by Locality in partnership with Social Value UK, to hear some [English] perspectives about how procurement can be leveraged for greater social, environmental and economic value for the benefit of communities and regions across the UK.

The Levelling Up agenda is getting a lot of attention at the moment, and is a popular idea among the public, as the Conservative government seeks to be seen to be addressing the obvious inequalities that are rife across Britain, especially in the wake of Brexit. As Isabelle Parasram, CEO of Social Value UK, pointed out today, the UK is one of the most geographically unequal countries in the developed world.  It seems that the strategic power of procurement has now been recognised much more widely, vis a vis its economic, environmental and social impacts.  About time, too.

England’s Social Value Act (now 10 years old) is key to the so-called “Levelling Up” agenda.  The Act was designed to be innovative and creative, but in the context of austerity the legislation was intentionally light touch – and the overarching goal was always about reducing cost.  

The Social Value agenda, on the other hand, is about promoting social, environmental and economic well being for everyone.

Darren Knowd, a procurement professional at Durham Council and Chair of the National Social Value Taskforce, rightly says that if you can describe social value, and if you can measure social value, you can include it in your decision making.  There is a learning journey needed both within procurement teams and on the supplier side, to embed social value metrics into procurement decision making – and scoring.  Increasingly, apparently, across England, public organisations are allocating 10%-20% scoring to social value within their tenders.

Former MP Chris White pointed out that public sector commercial teams DO NOT any longer have to select the lowest bid.  In principle this is a fundamental change that could allow public organisations to work much more in favour of the SME sector (and communities) than they have ever done before.  But I think it will take a significant culture shift to move buyers away from the focus on cost and the idea of the “most economically advantageous tender” (MEAT).

It’s clear there’s a gap between what people want to do, and the skills and competencies that exist among procurement professionals within public bodies.  In the context of austerity, there has been a hollowing out of expertise and experience within local authorities, for example, and this is often cited as one of the key obstacles to doing things differently.  An important consideration relates to risk in public procurement – most organisations operate some form of risk assessment methodology and risk registers for procurement exercises – and the fear of increased risk often inhibits innovation.

But what is more risky, and what is more economically advantageous, really?  The collapse of Carillion is instructive: buying from a bigger entity offers no guarantees.  Social Value prompts us to develop a more holistic approach – and hopefully a more place-based one – to defining “economic advantage” – not just financial resilience but also cultural, social, and environmental benefit.

“Not everything that counts can be measured, not everything that can be measured, counts.”

Panelists at today’s event agreed that there is a huge role for local government in the levelling up – as opposed to central government.  The Levelling Up agenda relates both to the devolution agenda and the localisation agenda.  One of the key themes that emerged from today’s discussion, was that each locality should be addressed uniquely.  

From a Wales perspective, I am really interested to note that Wales now has our own set of Social Value TOMs (Themes, Outcomes and Measures) that map directly across to the seven wellbeing goals of the Wellbeing of Future Generations Act.  It’s something that many of us have been calling for for some time – that we need to embed the WBFGA goals properly into procurement, and we need a way to hold local authorities accountable to delivering on them.  It seems that the Wales Social Value Taskforce, in partnership with Social Value UK, have made a good start with the Wales TOMs, but I also hope there is scope to develop this framework with more community co-production over the next few months and years.

Community needs analysis is key to understanding the differences between localities, and taking an outcome based approach to procurement.

I would take that a step further, to say that the “needs analysis” exercise should be carried out by communities themselves, and should be a community led process based on what local people and organisations think are their own local priorities.  This, I think, is the key culture shift that is needed, at all levels of local and national government: let people play a role in shaping the future of their own local economies.  It’s not easy to convene and facilitate truly co-creative community conversations, but there are plenty of organisations that are developing expertise in this – not least ourselves at 4theRegion, and others, like the Coproduction Network.  Working directly with community organisations and groups already operating within communities would be an important start.

It is certainly positive to see that both national and local governments are becoming bolder in their approach to social value in procurement, and becoming more strategic in their thinking, especially now, post Brexit and post Covid.  There are undoubtedly some examples of good practice emerging.  But there is so much more that needs to be done, to tackle the damage wrought by decades of outsourcing to major corporations and the hollowing out of local supply chains in places like South West Wales.  

Swansea Council carried out an important pilot with funding from the Foundational Economy Challenge Fund in 2020/21, to explore how to involve more SMEs in the tender process – but they perhaps still lack the resources to leverage all the learnings from this trial.   How long will it take to see real progress, to see significant contract wins for more local, regional, SMEs and social enterprises, and to see genuine social value being created? 

Business as usual with community benefits “on the side” is clearly not going to be enough.  Standing by for something much more fundamental and impactful!

Leave a Reply