Sarah Stone, Director of Samtaler, explores how the new Central Government Social Value Model can be used as a strong commercial driver for all organisations to develop a cohesive and more strategic Social Value offer
Since January, the Government’s new Social Value Model has been mandatory in all Central Government contracts. It’s suddenly gone from being a procurement ‘consideration’ to something with enough weight to be a differentiating factor in bid evaluations.
This has been a fairly seismic development in the world of public sector procurement. For many suppliers it seems as though, almost overnight, ‘Social Value’ has gone from being relatively rare to something that features in almost all tenders, consuming ever greater resources from their teams. It may feel like yet another box to tick in order to win public sector work but the reality is anything but. The most innovative, forward-leaning companies realise a strong Social Value offer is as an opportunity to differentiate themselves from their competitors and add commercial value to their bids. The model has huge implications for any organisation in the public sector supply chain – whether directly or indirectly. In fact, it may well prove to be the catalyst that finally moves Social Value to the top of the corporate agenda.
A new era for Social Value
It isn’t just the public sector and its suppliers that care about social value. Wider trends and cultural pressures are forcing all organisations to think about, and change, how they operate.
Whether you call it Social Value, ESG or CSR – investors, employees, customers and other stakeholders across both the public and private sector are increasingly demanding that organisations demonstrate positive impact through their day-to-day operations. Social Value is now a key requirement for businesses that want to stay competitive.
Having worked on both sides of the fence, helping procurers embed social value in their tenders and large organisations design and deliver Social Value, I know first-hand that many public sector procurers are well ahead of their private sector counterparts when it comes to understanding and creating Social Value. Despite this, lots of private-sector corporations are still struggling to understand the real commercial benefits of Social Value and far too many organisations are still addressing these issues tactically. Particularly in complex multi-national companies, sustainability, diversity & inclusion, community relations, and other activities that fall under the remit of Social Value are often delegated to employee working groups and rarely get any traction from senior leaders who don’t view these things as part of their core business. Instead, they are viewed as add-ons or a tick-box exercise; in some cases diametrically opposed to their day-to-day goal of generating economic value.
A framework for best practice
The wonderful thing about the new Central Government Social Value Model is that helps to cut through some of this confusion by offering everyone a ready-made framework that tackles two of the biggest challenges that organisations face when creating Social Value:
- Providing a comprehensive and standardised definition of what Social Value is.
- Adopting systematic ways to evaluate policies in practice.
The Model sets out five themes which any organisation can use as a starting point; not just in procurement, but as a valuable guide to outline their own Social Value strategy. It’s a tool that can turn ‘creating Social Value’ from a tactical add-on to a commercial driver.
The key is for senior leaders to come together and assess which of these key outcomes are most important to their stakeholders – both internally and externally – and which areas they can add value through the day-to-day operations of the business. What outcomes align with their own priorities and organisational objectives? That’s when an organisation will start to see the commercial benefits.
The five key themes are:
1.Help local communities to manage and recover from the impact of COVID-19 by:
Helping the economy, individuals and communities recover. Some of the groups most impacted by the pandemic are people suffering from poor mental health, lonely and isolated older people, victims of domestic abuse, immigrants, the homeless, the unemployed and people with long-term health conditions. Don’t forget that your own staff (both within your organisation and your supply chain) will fall into some of these categories and should be prioritised first and foremost.
2. Tackling economic inequality by:
- Creating new businesses, new jobs and new skills
- Increasing supply chain resilience and capacity
3. Fighting climate change by:
- Exploring additional environmental benefits and working towards net zero
- Influencing staff, suppliers, customers and communities to support environmental protection and improvement
4. Improving equal opportunities by:
- Reducing the disability employment gap
- Tackling workforce inequality
5. Show commitment to health and wellbeing:
- Supporting health and wellbeing in the workforce
- Improving community integration
Many of these are things organisations are already doing, but without being seen as part of the core business and something that drives growth, they’ve lacked both the resources and the buy-in of senior management and often failed to be taken seriously. How many wellbeing or diversity initiatives are the remit of volunteer-led employee working groups run by staff from the ‘side of their desks’? By making social value a specific evaluation criteria, the public sector is giving suppliers who want to win contracts a strong commercial driver to compel their businesses to pull all these strands together and develop a cohesive, social value offer that adds commercial value to their business. Not only can it help win public sector contracts, but it can also help businesses be more attractive to all their customers.
Challenge and change
Wherever you are on your Social Value journey, it’s important to understand that “Social Value” is fundamentally a principle that should inform everything an organisation does. The comprehensive nature of the Social Value Model is a reminder that these issues are no longer something that organisations can prevaricate about or address half-heartedly. The public have already moved Social Value to the top of their priority list, it’s time for organisations to follow suit. Only then will businesses begin to see the commercial benefits of doing these things well.
