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Social Value

Social Value – how does it affect bidders?

In this post, we address the main issues which suppliers encounter around social value, and look at what is being done by contracting authorities to measure social value and ensure that it is delivered successfully. 

The Public Services (Social Value) Act 2012 made it a legal requirement for contracting authorities to consider how social value can be achieved in public procurement exercisesWhilst not a brand-new concept, the implications on society, environment and economy have always been significant. It is important to remember that public bodies have the duty to get the maximum possible value out of every pound spent.

Issues around Social Value

The Social Value Act has prompted many key issues and confusions:

  • There is a lack of understanding from many bidders/suppliers
  • It is applicable to services only, and not to products or works
  • There is only the ‘duty to consider’, nothing more
  • There are no official consequences for not considering social value – only the lost opportunity to achieve social value
  • Contract management follow-up is vague, and it is not clear how buyers will ensure suppliers’ commitments from the tender stage are honoured
  • There is legal uncertainty at the SQ and ITT stage of the procurement process.

The Social Value Taskforce  was formed to provide further information and advice on how to apply the Act and what the real benefits are. They provide direction on social value, as well as engaging suppliers through workshops and feedback events. The social value task force is made up of buying organisations such as Crown Commercial Services, YPO, NEPO etc, and many individual public bodies. 

How to measure social value

Key measurements have been developed that can be used by both public sector buyers and suppliers to measure social value and their involvement. The Social Value Taskforce Maturity Index allows suppliers to determine where they are on the journey compared to their competitors and to understand what the next steps are to integrate social value into their core business functions. There are 10 main themes included.

National themes, outcomes and measures framework

Many councils have their own matrix for measuring social value, but the National Themes, Outcomes and Measures (TOMS) Framework is being used more and more frequently to enable consistency. This was set out to provide a minimum reporting standard for measuring social value. It has been designed around five principal themes, 18 outcomes and 35 measures.

The framework can be used to measure social value (and continual improvement) during the planning and procurement of services, evaluation of bid submissions and throughout contract management.

There is currently consultation around the ‘National Themes, Outcomes and Measures 2019’, as the framework is evolving regularly to reflect changing needs.

Social value in SQ and ITT questions

Buyers must highlight to possible suppliers or bidders what is most important to them in the procurement process if they want to attract high-quality and relevant social value responses. Specific outcomes and measures relevant to the buyer’s priorities may therefore be given greater prominence or weighting in the evaluation, allowing them to focus the social value section of tenders on achieving key aims.

The SQ selection stage will generally see no more than three questions associated to social value and will focus on outcomes achieved to date, whereas the tender stage will ask for forward-looking proposals against local social value outcomes. This must be achievable and relevant to the contract in question.

Good practice states anywhere between 5% and 20% should be associated to social value relative to the contract value, ie. 5p–20p in the £1 should be going directly to the community.