Procurement spend at Durham County Council has dropped from around around £650m in 2010 to £450m ©PA Images
Procurement spend at Durham County Council has dropped from around around £650m in 2010 to £450m ©PA Images

The four levers of social value

16 March 2018

There are four key opportunities to integrate social value into procurement, the top buyer at Durham County Council has said.

Darren Knowd, chief procurement officer at Durham County Council, said his procurement team have “four opportunity levers” they use to increase the social value in their contracts. They are:

1. How the procurement process is run.

2. The way solutions are designed.

3. The suppliers chosen.

4. The contract award criteria.

Speaking at the Procurex South conference on Thursday, Knowd said: “In Durham we refer to ‘four opportunity levers and a bucket’. There’s four real opportunity areas to get social value into your contracts.

“We need to pull on all of those levers to do the deal and get the benefits, but we need to chase the benefits into the bucket otherwise the efforts are wasted.”

The procurement process itself was an obvious start, said Knowd. Buyers should think about the way they design their processes, how they are lotting contracts and whether they are targeting SMEs.

Buyers should consider during the commissioning phase of contracts such as social care provision how the solutions or specifications can add social value. “We can design it into our procurements and we can ask for it,” he said.

Public procurers should use tools, including supplier questionnaires, to find businesses where social value is “fundamentally in the DNA of an organisation,” said Knowd.

Finally the most underutilised of the four levers was the invitation to tender process and the awards criteria itself, said Knowd, noting that buyers now have more legal leverage in the Public Services (Social Value) Act 2012 to judge tenders on their social value.

Knowd also pointed buyers to a number of tools, including the TOMs framework launched last year, that can be used to transparently and financially quantify the social value weighting given to a tender process.

Social value was a “fundamental” responsibility as well as a “rule obligation”, said Knowd, who praised the Social Value Act for giving public procurement legal backing. “Social value is actually our fundamental basic responsibility in terms of promoting economic, social and environmental outcomes,” he said.

“Many of us have been around since the time of sustainable procurement; the social value act has given us a little bit of legal leverage.

“If I look at my spend [in Durham] since 2010, our spend has gone down from around £650m to £450m. That’s a massive amount of reduction and loss of spend in the locality, so really for me social value is about getting the maximum possible value out of every pound that we spend.”

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