Social value: More red tape or a step forward?

Guy Battle from Social Value Portal considers the recent updates around procurement and social value: but is this more red tape or a step forward?

It appears the trickle of new government guidance on procurement has become a deluge over the past 12 months. Starting with the publication of the Procurement Policy Notice PPN06/20 in September 2020, followed by the Construction Playbook, then earlier this year the PPN05/21 and PPN06/21, and culminating in the release of the National Procurement Policy Statement in June. The guidance now needs to find its way into the update of the Public Contract Regulations due to be published at the end of this year.

So, what do these various documents say and is it all good news for procurers or just more red tape? Here are some of the ‘social value’ headlines for you:

• PPN06/20 – Taking account of social value in the award of central government contracts makes it a requirement (at last…) for all central government departments to evaluate social value (min. 10% weighting) in their procurement decision- making from January 2021 – based on the Social Value Model.
• Construction Playbook December 2020 clarifies that social value must be included as a central pillar in new construction projects.
• PPN06/21 – Taking Account of Carbon Reduction Plans in the procure-ment of major government contracts applies to any contract over £5 million a year, requiring a supplier to submit a carbon reduction plan and a baseline measurement.
• PPN05/21 – The National Procurement Policy Statement (NPPS) describes the vision for all central and local government procurements.

Whilst these are all important milestones, the NPPS covers all contracting authorities and is quite explicit in its guidance. The government wants to send a clear message to commercial and procurement teams across the public sector: they ‘do not have to select the lowest price bid’. Having said that, it will be interesting to see how this actually plays out, especially given the resource pressures local governments are under.

Other headlines within the NPPS include:

• All contracting authorities should consider three key national priority outcomes alongside any additional local priorities in their procurement activities:

1. Creating new businesses, new jobs and new skills;
2. Tackling climate change and reducing waste and;
3. Improving supplier diversity, innovation and resilience.

• The use of common benchmarks and standards allows the many examples of best practice in public procurement to be shared across all contracting authorities (a good example, the National TOMs.
• Contracting authorities should act to ensure their procurement and commercial teams have the right capability and capacity to deliver the priorities.

The answer to the question ‘good news or more red tape’ really depends upon your perspective: whether you view social value as an important part of your job description, or as an annoying detail to be endured alongside the delivery of the core contract.

Both points of view are, of course, valid, but central and local government direction is now clear. It’s just a matter of how quickly and how well buyers and suppliers can respond.

Building capabilities for delivery

The NPPS is explicit in its recognition that both capability (the expertise) and capacity (the time and resource) are key foundations to the delivery of its ambitions. Make no mistake, there are challenges for both buyers and suppliers.

For buyers:

• How do we ensure social value is embedded across the entire organisation, to embrace all category spend areas and all departments?
• How do we manage the evaluation and award fairly and transparently?
• How do we get the most out of our suppliers?
• How do we ensure that micro, small and medium-sized enterprises compete fairly on social value requirements?
• How do we ensure social value pledged at procurement is actually delivered upon, especially as we struggle with a reduction in resources?
• How do we build capacity within our supply chain?

For suppliers:

• Do we properly understand what buying organisations mean or want from social value?
• How can we work with local organisations and understand local community needs to deliver social value on each contract?
• How can we mobilise our own supply chain to also deliver social value?

If some of these challenges ring true, know that you are not alone. Working with the National Social Value Taskforce, Social Value Portal has developed resources for organisations to properly embed social value into their decision-making:

1. Social Value Maturity Index. A free tool to assess how your organisation is progressing on its journey of embedding social value into its decision-making and governance processes.
2. Benchmarking Tool and National Social Value Framework. The National Social Value Framework, known widely as the National TOMs, is a standardised framework to report, measure and benchmark social value consistently.
3. Performance and Contract Management in Social Value. Guidance to help you understand contract management best practice, approaches and techniques.
4. Social Value Easy Guides – For SMEs and Buyers of SME Services. A simple guide for buyers and SMEs on how to prepare a social value bid and ensure that SMEs are not disadvantaged.
5. Social Value for Central Government Buyers and Suppliers. A social value measurement and evaluation tool that has been mapped against the Social Value Model.
6. Embedding Social Value into Planning. A guide showing how local authorities can embed social value into planning processes and engage developers.

The Social Value Act – A 10 Year Anniversary

Amazingly, March 2022 marks the 10th anniversary of the Public Services (Social Value) Act. It seems like a lifetime ago and whilst we were all slow off the blocks, the Act was the start of something great and the portent of a transformation in procurement.

The initial charge was led by local government, who forged the way and broke new ground. Leading authorities have seen an additional 25% social value created across their portfolios, including new jobs for the disadvantaged, more support for local businesses, volunteering in the community and a range of innovative environmental initiatives. Central Government has joined this charge, adding new momentum in the form of updated guidance and stronger requirements.

And so, these changes are ‘good news’, rather than ‘more red tape’ as we emerge from the pandemic and find it now more important than ever, to continue working collectively to support our communities.

Please note: This is a commercial profile