Social value is no longer a nice to have – if you don’t adopt and deliver social value, you’ll lose work
For the past six years the government has asked us to deliver social value in public sector projects – but has this happened? And do we really understand what social value is? Due to imminent changes in legislation, now is the time to take social value seriously.
In 2012, the Public Services (Social Value) Act came into force requiring the public sector to secure social value investment within contracts. At the time, it was a big move which underlined the government’s commitment to prioritising social, economic and environmental benefits rather than lowest tender costs during the procurement process.
What we’ve seen are lots of good ideas and intentions, but not enough explicit outcomes
What’s worrying is that when I talk to people about social value, I’m still often met with confusion. The government’s definition is simple. Social value refers to the wider financial and non-financial effects of projects and programmes including the wellbeing of individuals and communities, social capital and the environment.
For me this means that when we’re bidding for and working on public sector projects, we don’t just look at cost and time but at the wider benefits our work brings, whether that’s building the economy through using local suppliers or hiring young apprentices to develop new skills. It also means opening the doors for SMEs to work on big public sector jobs; companies that may not have the resource or skillset to compete with larger firms but can offer huge benefits to communities.
We need to take a good, long look at how ready we really are. Because we can’t afford not to be
The 2012 act was missing one thing, though: a firm requirement for social value (it only asked for it to be “considered”). This led to many in the sector not taking it seriously enough, looking at it as a tick-box rather than fully engaging with the issues. What we’ve seen since are lots of good ideas and intentions, but not enough explicit outcomes and long-term effects.
All this is about to change. In 2018, the then minister for the Cabinet Office, David Lidington, announced plans to expand the act’s powers to force central departments to “ensure all major procurements explicitly evaluate social value where appropriate, rather than just consider it”.
This change will boost the effects of social value and should reduce barriers for small and medium-sized enterprises, microbusinesses and social enterprises.
For those of us working in the public sector it means one thing: we can’t afford to ignore social value any longer. With government contracts being worth approximately £48bn per year, showing that we understand and can measure the impact of social value on our projects is now a commercial imperative. It is time for us to play our part in protecting the environment, boosting local economies and increasing wellbeing. Put simply, it is the right thing to do.
There is understandably some frustration around the policy when it comes to setting, measuring and demonstrating social value goals. The act has no definitive list of which social, economic and environmental benefits to seek— it’s deliberately flexible, acknowledging that social value should consider local context. In practice though, this leads to a multiplicity of meanings and understandings, even within one organisation.
I believe having a social value policy with tangible and defined objectives that drives decision making is the first step we all need to take. Having determined those objectives, it’s vital to be clear on what is to be measured and why, before exploring how to do the measuring. It’s no use gathering data if we don’t know what we’re going to do with it; the methodology, analysis, reporting procedures and feedback mechanisms must be clarified at the outset. It’s also important we review the impact of social value activities over every stage of the project and beyond. How we evaluate social value at each project stage is something we need to understand and put in place from the very beginning.
Social value is no longer a nice to have – if you don’t adopt and deliver social value, you’ll lose work. It’s a commitment the government is taking ever more seriously, given its key policy drivers around employment, skills, mental health and wellbeing, and lessening the impact of climate change.
The new social value requirements will come into effect this month, so for all of us working in the public sector we need to take a good, long look at how ready we really are. Because we can’t afford not to be.
Peter Masonbrook is associate director at Faithful+Gould