An SVUK team review of the new Social Value Model for central government procurement (PPN06/20)

An SVUK team review of the new Social Value Model for central government procurement (PPN06/20)

Posted 11th January 2021

Welcome to the start of a new year and the launch of the eagerly anticipated new Social Value Model for central government (set out in procurement policy note PPN06/20 for those who like the lingo!). This is a short blog setting out the Social Value UK team’s perspectives on this new addition to the social value landscape. We want to highlight aspects of the PPN that we are excited about and areas where we believe further development will be needed in time. 

Quick disclaimer: this analysis focuses on the maturity of the social value thinking and compares it to much of what we’ve seen previously in local government procurement practice. It does not pass judgement on the Model’s potential effectiveness as a piece of procurement policy. We welcome further analysis from procurement experts who can provide perspective on the latter and are sure this will materialise as the new Model gets tested in practice now it’s live.

Six of the best bits

The Model will influence an estimated £49 billion of public spending per annum so let’s firstly recognise this huge potential and welcome this timely intervention by central government to implement a mechanism to try to tackle the UK’s biggest challenges; rising social inequality, achieving net zero and improving wellbeing through procurement. Much thought has gone into the Model and here are six areas we wanted to highlight.

1.Stronger language

The Social Value Act has of course been in place since 2012 but many of the criticisms have been on the weak language. This Model should be commended for replacing words like ‘consider’ with ‘evaluate and ‘account for social value’.

Another positive is the explicit references to inequality, personal wellbeing and mental health. Social Value has become a broad term but at SVUK, and across the global SVI network, we have always maintained a mission to tackle inequality and improve wellbeing through greater accountability to those affected. We cannot shy away from these issues and it is pleasing to see these words on the page and brought to the attention of decision makers. 

2. A joined up approach to policies and other relevant initiative

The Model does a good job in connecting social value to other relevant legislation, policies and initiatives. We specifically welcome the focus on the Equalities Act, alignment with the Civil Society Strategy, references to ‘Decent work’ initiatives and the mapping to the UN Sustainable Development Goals.3

3. A qualitative approach to assessing bids

The Model has clearly learned from some of the bad practice in local government social value procurement where an over focus on quantities has arguably led to a race to the bottom in fairly meaningless claims of social value. For example; equating social value with ‘number of jobs’ or ‘number of apprentices’ is an extremely blunt way to consider social value and putting large numbers behind these has led to bold mostly unverified claims of social value.

Instead, the Model asks suppliers to describe how they will create social value with responses assessed in the same way as the quality element of a tender is scored. Numbers and quantities will always be needed to paint the full social value picture but it’s positive to see a focus on the quality and process underpinning ‘social value activities’ rather than just comparing amounts.

4. A focus on Social Value creation within the workforce

It’s very clear that social value in this Model includes how people in the workforce are treated and their experience in delivering the contract. The Model has a strong focus throughout on diversifying the workforce and creating opportunities for people from minority groups who have been disadvantaged in accessing job opportunities. 

Furthermore, the Model goes way beyond the usual (and most basic provisions) focus on protecting Human Rights and training for staff. The Model references in various places the government’s Good Work Plan, the Thrive at work (independent review of mental health and employers) and encourages suppliers to make the Mental Health at Work Commitment.

This is a very positive step for three reasons: a) it stops social value being seen as just ‘CSR activities’ or “the nice fluffy extra bits you do on the side to ‘give something back’. b) it links to and embeds other relevant policies and developments (such as those referenced above) c) progress in tackling inequalities in the labour market and improving mental health in the workplace will dwarf any amounts of social value that might be gained through additional activities to ‘give back’ to communities that are far too often lumped into tenders as tokenistic ways to win the work.

5. Strong emphasis on collaboration and co-design with communities

Within the Model the wellbeing theme identifies improving community integration as a policy aim. What’s most impressive is the detail in the Model Award Criteria for this subsection (specifically Sub-criteria for MAC 8.1: Collaborate in codesign and delivery). 

Successful suppliers will need to demonstrate and describe (amongst other criteria)  the tenderer’s existing or planned: 

● Understanding of local demographics, needs and opportunities for the co-design of the goods, services and works to be delivered under the contract. 

● Methods for engaging with different parts of the community (including the education system) and how communities come together to inform decisions, strategy and projects to leave a positive legacy for future generations. 

● Measures to involve local stakeholders and/or users in design (e.g. in the design of services, systems, products or buildings). 

● Plans for positive actions with community groups. 

● Measures to build trust, gain credibility and build relationships to increase community integration, trust and influence on how the contract is performed. 

● Flexibility in responsiveness and ability to adapt in approach to community engagement and initiatives

This strong emphasis on stakeholder engagement is welcomed and we hope that it leads to more comprehensive and genuine collaboration with communities.

6. Weightings and relative importance 

The headline good news is that this Model mandates Social Value receives a minimum of 10% of scoring in all tenders. This is welcome, it sends a strong signal of its importance and no doubt many examples will increase it.

The other positive can be found in section 3.20 of the Guide to Using the Social Value Model where contracting authorities are encouraged to allocate appropriate weightings within procurements to each of the evaluation criteria it has included under social value. For example, for a procurement with 10% of the overall evaluation score allocated to social value, users might break the weightings down as shown in the following table:

This shows how value can be adjusted according to context and decisions can be made to focus on what really matters and maximise social value. (See Page 16 Guidance doc.)

Some areas for improvement?

At Social Value UK we are always pushing for the very highest standards and when it comes to measurement of social value we advocate for the adoption of SVI’s Principles of Social Value. With this in mind, there are areas that we would highlight for improvement to the Model, these  also provide opportunities for suppliers to go above and beyond and demonstrate ‘best practice’ in their measurement and management of social value. 

  1. The suggested Reporting Metrics are outputs rather than outcomes orientated

The big area risk is that the suggested reporting metrics are largely output measures. This has been designed to help suppliers with simple measures and KPI’s. In doing so there will be a risk that the outputs (i.e. Percentage of all companies in the supply chain under the contract to have implemented the 6 standards in the Mental Health at Work commitment.) are not leading to outcomes (in this example; improved levels of mental health in the workplace).

It is hoped that enterprises taking social value seriously will go further than these output metrics and collect outcome data in order for better understanding of performance as well as insight as to how social value can be optimised.

2.Stakeholder voice and accountability

Involve Stakeholders is the first and underpinning principle of SVI’s approach to accounting for value. It ensures that people whose lives are affected by activities are given a chance to speak and share their experiences whether positive or negative.

The Model has already been applauded by SVUK for encouraging strong levels of collaboration and co-design with communities. It also does allow for additional outcomes to be added which is good, further guidance on how and the benefits of this would be a great next step. 

SVUK would also encourage explicit emphasis on stakeholder involvement in the process of defining outcomes to be measured at the contract management stage. Specifically to ensure that any unintended outcomes are captured and that the views of those affected are included.

3.Social Value only applies to activities beyond the subject matter of the contract.

It is worth reminding ourselves that social value will be created through the successful delivery of the subject matter of the contract. This is perhaps more obvious in some contracts than others. For example; it is easier to see how a contract for the delivery of say probation services will create social value than a contract for IT services. Nevertheless, each contract will lead to improvements in people’s lives and it is hoped that this is captured in some way within the procurement. 

Perhaps the most obvious way to do this is by including it in the ‘Quality’ aspect of the tender and contract management. Some guidance on this could be beneficial and lead to further joined up thinking about ‘social value’ in the inherent delivery of contracts. SVUK would point to the following approaches as good ways to ensure the social value inherent in the subject matter of the contract is being managed for social value:

  1. An assured Social Return on Investment report with appropriate scope of activities
  2. Compliance with British Standard for enhancing social value (BS8950)
  3. The Social Value Management Certificate
  4. Compliance with UNDP’s SDG Impact Practice Standard for enterprise

4. Verification and assurance

Social Value UK have long been advocating for more accountability and credibility for social value information. Financial performance is scrutinised and financial assurance and audit are accepted as necessary to build trust and confidence for decision makers. It would be great for this to be introduced to the Social Value Model. There are various assurance services that could be used (see recommended approaches above).

5. Materiality and decisions to exclude 

In practice, procurement officers (on both supplier and buyer sides) will make decisions about what aspects of the model are deemed relevant or material to the subject matter of the contract. Further guidance on this would be useful, particularly to avoid the risk that unintended (negative) outcomes are excluded from measurement specifically at the contract management stage. Some form of assurance can protect against this, see above.

6. A focus on process of measurement during contract management stage

Once contracts have been awarded, appropriate measurement and reporting should be put in place to ensure accountability but also to provide information to contract managers on how social value performance can be optimised over time. 

SVUK recommend building on the qualitative approach in the assessment of tenders by encouraging a set of qualitative process metrics that require suppliers to provide a description of the following for each theme (particularly where the themes relate to the workforce and the communities affected by the contract):

In conclusion, Social Value UK welcome the new government Model and commend the level of thought that has gone into designing an appropriate approach to evaluating social value.  We recognise this is the first step for many government departments and we hope this will catalyse a different way of making decisions. 

Social Value UK are running regular workshops on the new Model and look forward to building greater understanding of how the Model will work in practice with our members and network, as well as providing feedback to Cabinet Office. If you are interested in joining one of these sessions please contact us here.