Five ways to generate social value in procurement

posted by Charlene Maginnis
18 March 2021

Every time a local authority, central government department or healthcare organisation signs a contract with a supplier, there are opportunities to increase the value delivered for UK citizens. 

The public sector needs to recognise this opportunity and understand what their options are to boost social value in their area. More than that, it’s actually now a requirement for central government to explicitly evaluate social value in its procurement.

As an active member of the National Social Value Taskforce, Crown Commercial Service is working with buyers and suppliers to make it easier for public bodies to measure the value they are helping to deliver through their procurement.

In February I joined a panel event at the National Social Value Conference, discussing how we can integrate social value into central government procurement. And there are so many opportunities to do just that.

For instance in the construction sector public bodies can now ask that suppliers sign up to schemes that offer support for their workers’ mental health – a serious issue for employees in an industry which can be fraught with uncertainty about where the next contract is coming from.

And NHS bodies can enhance sustainability and reduce their environmental footprint when procuring technology by moving to greener energy sources and reusable hardware, having a positive impact in their local area and beyond.

What the rules say

In September, the Cabinet Office published Procurement Policy Note (PPN 06/20): taking account of social value in the award of central government contracts

The guidance note requires all central government departments to explicitly evaluate social value in their new procurements, where the requirements are relevant and proportionate to the subject matter of the contract.

The PPN also includes a new social value model, which contains a menu of priority social value themes and policy outcomes that can be applied in new procurements and contracts. 

What buyers need to consider

1. Build from the ground up.

Social value in procurement doesn’t work when it’s treated as an afterthought – it needs to be baked into frameworks and contracts from the start. Consider how each of your contracts can be maximised to generate additional social value, and who will benefit.

2. Engage with your supply chain. 

Suppliers often have a close ear to the ground in terms of what opportunities are available and achievable in their industry. Speak to suppliers and users of the particular goods or services you’re buying to gain a balanced and realistic view of what social value options can make a real difference.

3. Decide what themes and outcomes you’re working towards.

The latest PPN (06/20) sets out social value themes you should consider and the kinds of outcomes you might be able to deliver – from supporting the recovery of local communities from the effects of the pandemic to tackling workforce inequality. 

4. Understand your options.

Local government, healthcare, and education organisations can now choose to reserve their procurements for small businesses or social enterprises to support their local economy, thanks to a recent change to procurement rules. Make sure you understand what your options are to get the maximum benefit.

5. Be bold in how you measure delivered value.

Social value delivers benefits that go so much further than pounds and pennies. You can measure and quantify social value delivery using financial proxies, but don’t forget that each initiative tells a story of an impact on individuals, communities or the environment – and these should shine though when you talk about how you’ve delivered social value.  

You can find out more about social value and making responsible buying decisions on the CCS website.

  Charlene Maginnis is Crown Commercial Service’s head of policy delivery – supply chain and service offering.

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