It’s an exciting moment for public procurement in the UK. A chance to really tackle dodgy deals, unworkable contracts and eradicate the exploitation found in supply chains.
The UK Government is considering a Procurement Bill that proposes moving away from Most Economically Advantageous Tender to Most Advantageous Tender.
It is a significant switch. No longer would bids for public money be judged by solely financial means, but the door would be open to a much more robust scrutiny of needs for those impacted – the residents of the United Kingdom.
The bill is not perfect, for example, utility companies are exempt from the standards set out in the new legislation. But, far more importantly, the government is employing the term “public benefit” rather than “social value” as the threshold for most advantageous tender.
At Social Value UK, using feedback from our members and volunteers on the Contract For Change programme, we have penned a response to the government stressing the need to use “social value” as the key indicator of a strong bid.
We are encouraged by the government’s focus on opening public contracts to more SMEs (small and medium enterprises) and would like to see VCSEs (Voluntary, Community, and Social Enterprise) also benefit. For this to work fully, we have made further recommendations.
SVUK CEO Isabelle Parasram OBE said: “By using social value as the barometer for advantageous tender, the government has the opportunity to see some serious returns on investment that benefit the UK public and our planet’s long-term health.
“I strongly urge the government to take heed of our recommendations and to firmly embed social value in the Procurement Bill, rather than rely on a subsequent national policy framework, which will restrict investment through continued uncertainty. Offer organisations certainty and I believe we’ll see a welcome boost to our economy, through more sustainable, informed decisions that incorporate social value practice.”
Please read our response below.
For queries please contact: communications@socialvalueuk.org
Social Value must be the watch word of Procurement. May 22 2023
Social Value UK urge the Government to replace “public benefit” and “value for money” within the Procurement Bill, with the more robust term “social value” to ensure the best outcomes for British taxpayers and wider society.
The amendment would reinforce the government’s warmly welcomed decision to move from considering the most economically advantageous tender to most advantageous tender.
It would give commissioners the leverage required to filter bids through more qualitative means; reducing unrealistically low bids and providing more opportunities for SMEs and VCSEs (charities, public service mutuals and social enterprises) to compete with larger organisations.
Social value, simply put, is the change experienced by people when organisations take decisions. It is the non-monetary value, such as staff wellbeing, access to services or myriad other things not directly included in traditional accounting. More than that, it is the balance of positive and negative experiences.
Alignment would build upon the Government’s introduction of the Social Value Act in 2012 and would ensure wellbeing, equality and environment become fundamental considerations in the £300 billion spend on public services, works and goods.
Our Recommendations: Align the definition of MAT (Most Advantageous Tender) with “social value” rather than “public benefit” when awarding contracts, Extend procurement accessibility to VCSEs and further embed steps to support SMEs, Extend learning and development support to organisations of all sizes and sectors, alongside the included provision for commissioners.
SVUK appreciates the Government has indicated the Social Value Act and the National Framework Policy, which will accompany the Bill, will somewhat align procurement with social value and Net Zero ambitions. However, we feel by relying on the short-term nature of policy, the government could fall short of its intended target to get best value for taxpayers. Policy is easily changed and uncertainty risks inaction, jeopardises progress and reduces investment potential in the UK.
Businesses and delivery organisations of all sizes want greater clarity and consistency, so they can better plan, maximise their return on investment and ensure efficient delivery. Without clear regulation and consistency, supply chain issues such as exploitation, modern slavery and planetary destruction will not be addressed.
Further, SVUK is of the opinion that by adopting “social value” as a key tenet of procurement, it will assist the government in its Levelling Up ambitions.
SVUK and our members commend the Procurement Reform programmes’ learning and development plans and urge this support be extended to all suppliers, especially SMEs and VCSEs, in order that the new approach to procurement is interpreted consistently.
The climate crisis reinforces the need to embed social value within procurement and as the Skidmore Independent Review of Net Zero emphasised, there is a need to act fast or face a more uncertain and expensive future.
NB: This response has been formulated based on feedback from the Social Value UK Thought Leadership Group “Contract for Change” made up of SVUK members. For more information, please visit www.contractforchange.org
The Procurement Bill is currently between the report and committee stage in the House of Commons. It successfully passed the Third Reading in the House of Lords and the Second Reading in the House of Commons. The next reading will confirm it is to be passed into law. There is no date set for this debate as of yet.
To read more: https://bills.parliament.uk/bills/3159/publications
This is a guest blog by organisational members HACT on social value and procurement. This is part of the Member Exchange Series. Let us know your thoughts in the comments.
HACT launches toolkit
Housing associations have long been committed to improving the communities they work in, providing opportunities for residents in the form of employment, training, skills and broader health and wellbeing activity. As community investment budgets are increasingly scrutinised, housing providers will look to core activities to drive social value. Procurement is central to this, but established models – heavily reliant on apprenticeships – are unsuitable for all contracts, nor are housing associations satisfied that the social value promised at tender stage is monitored or measured to validate delivery. Likewise, contractors committed to delivering social value are often uncertain what housing providers wanted – how is ‘social value’ defined, and what outcomes are of most interest?
To address this, the Social Value and Procurement toolkit was created by HACT, supported by Trowers & Hamlins LLP and echelon Consultancy Ltd. To ensure the final guidance responded to challenges and answered critical questions, we convened a working group of housing providers and supply chain organisations (Affinity Sutton, North Hertfordshire Homes, Riverside, Thrive, Wandle, Mulalley, AkzoNobel, United Living, Wates and the Northern Housing Consortium). This vanguard supported and shaped the development of the toolkit, ensuring it was relevant, practical and easily applicable.
The toolkit provides end-to-end guidance for both housing providers and contractors on how to most effectively and efficiently generate social value through the procurement process, alongside legal guidance and a plethora of practical tools, from example wording for tenders and contracts to templates and checklists.
What next?
With the toolkit now published, what’s next? There are four areas we’ll be focusing on:
First, and testament to the toolkit’s usefulness, beyond the original supporters a good number of further organisations have adopted it: Catalyst, Circle (now part of Clarion Group), Fusion 21, Genesis, Liverpool Mutual homes, mhs Homes, Places for People, Viridian, Keepmoat and Mitie.
Second, HACT is delighted to have these organisations on board and we are continuing to promote the role of procurement in generating social value. HACT staff have taken part in a number of events recently, and we were delighted to be invited to speak with members of Social Value UK at the 2016 Social Value Members Exchange. Additionally, HACT has hosted a series of well attended masterclasses for contractors and housing providers, which will continue in 2017.
Third, although much of the previous engagement on social value and procurement has been around repairs and maintenance, following publication there has been significant interest in applying the toolkit to a wider range of goods and services. Further, a number of exciting discussions are underway, exploring opportunities for implementing the toolkit beyond housing. These avenues of further work offer great potential to begin firmly embedding social value across a range of housing and non-housing procurements.
Lastly, over the next year HACT will continue working with organisations, individually and collectively, promoting the importance of effectively delivering social value through procurement, providing packages of support to unlock the full potential for social value generation.
The Social Return on Investment Network and Local Government Association launch new “Guide to Commissioning for Maximum Value.”
The SROI Network, in co-operation with the Local Government Association is pleased to announce the launch of the new “Guide to Commissioning for Maximum Value.”
The guide, which has been prepared by The SROI Network as part of the National Programme for Third Sector Commissioning, will be launched officially at The SROI Network International Conference –“A Time for Social Value” on 16-17th February 2012, University of Potsdam, Germany.
It brings together a range of related practice and is intended as a starting point for further development of professional commissioning practice.
Specifically, the guide is aimed at commissioning teams responsible for public services, and is most relevant to those with responsibility for relational services, dealing with what value is and how it may be better understood and taken into account in decision making throughout the cycle of commissioning.
Jennifer Inglis, an author of the report and a director of The SROI Network, said –
“We are delighted to be publishing this major new guide with the LGA. Commissioning is an extremely important discipline in today’s public services. Commissioning teams have the potential to transform not only the impact that individual services, make but also to make a significant difference to communities.”
“Making the most of this potential is key to successfully navigating through current reforms, including Localism, and is also central to meeting existing duties under Best Value.”
“Commissioners have to make difficult decisions and this Guide to Commissioning for Maximum Value offers some principles, adapted from the principles of Social Return on Investment, to help guide these difficult professional judgements.”
“We know there is a lot of interest in Social Return on Investment amongst local authorities and other public sector bodies, and we would invite all interested parties to join the SROI Community of Practice hosted by the LGA to share experiences and further develop practice.”
The Guide to Commissioning for Maximum Value is a timely addition to the UK Government’s “Best Value Statutory Guidance,” in light of reforms in EU Public Procurement Regulation and MP Chris White’s Public Services (Social Value) bill, which call for the concept of making social value more relevant and important in the placement and provision of public services.
It is highly relevant to the changing landscape of public services in England, with a need for systems that support good local decisions, involvement of service users and other stakeholders. It is also relevant in relation to the difficult decisions that many organisations are facing at present, and may be of use in Northern Ireland, Wales and Scotland and additionally to those responsible for back-office services.
The model presented on commissioning for value draws on the training, meetings and other interactions that the SROI Network has had with commissioners on the subject of value. It applies the principles and practices set out in the Cabinet Office’s 2009 “A Guide to Social Return on Investment” but revises and extends them in a way that is both useful and appropriate to commissioning.
To download a copy of the “Guide to Commissioning for Maximum Value” please visit The SROI Network website here.
