For many local government organisations, the challenge of demonstrating the social value they deliver is getting harder by the year. New legislation, shrinking resources, and growing scrutiny are all making the process more complex.

But, by considering social value from the start of a project, and by collaboratively working with their supply chain, they can meet their obligations whilst demonstrating their contribution to local community investment.

Few could object to the growing relevance of evidencing social value. However, for many organisations it poses significant challenges. Some lack the capacity to define, state, and evidence social value across their schemes. Others no longer have the skill set or capacity in-house due to years of cuts.

More law, more orders

Since the Public Services Social Value Act (2012), local government organisations have been more aware of their duty to consider social value within procurement. But, as this was only advisory, there was little accountability. No longer. PPN0620, which came into force at the beginning of 2021, mandated government bodies to give at least 10% weighting to social value during the tendering process. It also outlined five core social value themes, to help guide organisations towards desirable outcomes.

Meanwhile, PPN0521 requires all public sector bodies complying with Public Contracts Regulation (2015) to install social value into procurement activity. Now, affected bodies must have the right resources, policies, and procedures to create clear awareness around social value and how to record, measure and report their successes.

However, a decade of austerity has diminished available resources - social value is often assigned to staff as a secondary brief, whilst comprehensive training is rare. A shortage of skills and a concomitant lack of understanding means that too few organisations record and report social value in a consistent approach. And for private businesses hoping to win work with public sector bodies, they must be cognisant of these changes and ready to demonstrate how they can deliver to the new regulations.

Of course, plenty of local authorities possess a clear understanding of their social value objectives and a framework for how to realise them. Yet when it comes to procurement, communicating the right type of economic, environment and social objectives to the supply chain is hard.

There is no standard or mandated relationship to enforce upon suppliers. Letting an IT contract is different from a social care or construction contract. For instance, what kind of social value should you be demanding from a four-week contract worth less than £10,000? You can’t just put the same standard social value question in your tender.

Demand and supply chain

Even once the contract has been awarded, organisations must continue to extract the promised social value from a contract management perspective. They must ensure that what was agreed is actually delivered by the suppliers. Yet too few possess the resources or skills needed to actually enforce what was agreed in principle. To prevent this, local government organisations must do three things.

EARLY ENGAGEMENT: ensure that you understand your supply chain before writing the tender. Otherwise, you risk asking for unrealistic achievements for the size of the prospective suppliers or the length of the contract.

PLANNING: consider social value right from the outset. This ‘Left of Zero’ (referring to RIBA stages) approach incentivises everyone to consider social value as one of the original, animating forces behind the project itself. Rather than trying to justify its social value midway through the project (with correspondingly limited results), it allows the entire project to be oriented around it. The later you consider it, the less positive impact your project can have.

MEASURING AND REPORTING: there must be a credible Social Value Plan for actually delivering the social value. Beyond the act of procurement, beyond the opening of a scheme, social value must be an ongoing dynamic with its own processes for evidencing, reporting, and evaluating. It’s not a box to be ticked, but a continuous process to drive positive outcomes - and the contract should reflect that.

Revaluing social value

There’s a misunderstanding at the heart of social value. Too many organisations treat it as an apprenticeship, an outreach programme, a charitable giveaway. But that’s just the vehicle. Social value is actually the effect precipitated by this tool. It’s the extra trust in the local community, the new skills acquired by the apprentice, their increased confidence and prospects, and more besides. That’s the social good we’re trying to create, and bit by bit it will transform local areas

These changes won’t happen overnight. But, by transforming their approach to social value, local government organisations can better meet their legal obligations, deliver better outcomes - and, most importantly, improve lives along the way.

Peter Masonbrook is head of social value at Faithful+Gould