New social value evaluation prompts green recovery

For years, delivering on social responsibility has been a growing priority for the public sector. The refreshed Social Value Act could mean significant progress, writes Proxima.
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By Proxima

05 Oct 2020

For years now, the delivery of social responsibility has been climbing up the list of priorities for the public sector. The collective mood for social and sustainable change bubbling across the nation, heightened by the pandemic, calls for a meaningful government reaction.

There are already some measures in place to encourage social responsibility - the UK’s 2012 Social Value Act, which requires all public authorities to consider economic, social, and environmental wellbeing when they commission public spending contracts, was a good step in the right direction. But it doesn’t go far enough. Without concrete guidelines, requirements and enforcement, many departments slipped through the net and the Act failed to wholly integrate social value into all channels of public and private sector work. The limited success wasn’t enough for the Act to stand its ground in today’s world.

 

A true, qualitative assessment of supplier’s social impact

This month, the Act has had a refresh. New central government measures launched by Cabinet Office Minister, Julia Lopez, means businesses seeking to win government work must set out how they will also deliver social value priorities, with a 10% weighting placed on social value criteria.

From January 1st, 2021, the new approach requires all central government procurements to explicitly evaluate, rather than just consider, social value[1]. Shifting the tone from a ‘should’ to a ‘must’ will drive greater levels of consistency and give all suppliers, especially SMEs and third sector organisations, greater opportunities to support public good.

 

Levelling the playing field

With attention turning to qualitative assessment, the new measures mark a significant move away from corporates and big companies being advantaged in the procurement process. All SMEs and third party organisations can now operate equally and have a bite at the big procurement contracts they are often overlooked for.

Welcoming SME engagement through the new measures chimes with the government’s wider ambition to encourage diversity and support for small businesses, ensuring public sector policies are specifically engineered not to discriminate against SMEs. Meeting the target of spending £1 in every £3 with SMEs by 2022[2], and the Government’s target of spending 33% with SMEs by 2022, will no doubt be accelerated by the refreshed Social Value Act.

 

Local government delivers impact too

Good practice has been found to exist within many local councils, and the National Health Service’s Clinical Commissioning Groups but less so in Central Government Departments who have struggled more with practical implementation. Local governments, who are able to see the tangible benefit of investing in social issues, are better engineered towards delivering social responsibility results. Many have done this extremely well – most notably Manchester who explicitly evaluate Social Value: it accounts for 20% of the evaluation. Yet, Lopez’s extended measures only relate to central government, failing to accelerate the work already being done in local communities.

Of course, creating a societal loop across the country and demonstrating national impact requires central government regulation. At a local level, the social value intention is already there, but they need the tools to execute their ambitions. The updated will hopefully encourage companies to deliver social impact as part of their very fabric, as it will become the norm to demonstrate that Suppliers can deliver this additional value.

The pandemic has put a spotlight on social value, creating a lever for good change and recovery in a post-COVID world.

Safeguarding the supplier relationship

By enforcing rather than hinting at social responsibility requirements, the updates will likely spark an overhaul for many commercial teams and an assessment of their current suppliers. Arguably, the new narrative focuses too heavily on buying at the front end and picking new suppliers, to ensure alignment with the social value criteria. This both exposes relationships with current suppliers and stifles innovation within contracts - in practice, commercial teams should reassess their suppliers and challenge them to meet the new requirements, without jeopardising good relationships.

 

Mirroring the motivation

The pandemic has put a spotlight on social value, creating a lever for good change and recovery in a post-COVID world. There is no doubt that the update from central government defines a clearer approach with consistent qualitative evaluation. All potential suppliers can successfully bid by describing what they will deliver and how they will deliver it, rather than how much.  What’s more, it ensures transparency and provides direction for organisational ambition, helping suppliers gear up their operations and solutions to meet the needs of the public.

Lopez’s new measures are a step in the right direction but there remains a huge opportunity to expand and mirror this motivation, beyond central government. Defining and achieving social responsibility must be a mutual ambition rooted across all channels of public and private sector work, inspiring a more sustainable future society.

Read the most recent articles written by Proxima - Supply Chain and Logistics: Rebuilding in uncertain times

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