Few councils take social value seriously

The public services (social value) act 2012 has the potential to transform public procurement by placing a responsibility on all public sector organisations to consider social value in service contracts, or where there is a service element in goods or works contracts.

But there is a problem. Hardly any public sector bodies are taking it seriously.

A recent survey by the Social Value Portal shows that despite over 72% awareness of the act, less than 30% of public sector authorities actually have a policy in place. This is surprising given fact that the act was implemented in January 2013 and that it provides the public sector with the perfect opportunity to engage with business to help deliver better social services.

As our survey shows, there may be good reasons for this, with 80% of local authorities asking for additional guidance on measurement, legal issues and procurement advice, and over 75% believing that business is not yet prepared.

Reasons, yes, but not an excuse. In my view the act provides a unique opportunity to engage with business proactively, and public authorities to use their buying power to deliver social value.

So what’s needed?

Leadership: The most forward thinking local authorities – such as Liverpool Council – are leading from the top. Liverpool Council has appointed councillor Rosie Jolly as their leader of social value. Councillor Jolly has already passed a motion in favour of ‘buy local’ and is in the process of a root-and-branch reform of how council officers are engaging with the delivery of the act. A new social charter is being delivered at the end of September.

A social value strategy: Most councils and government departments do not have a social value strategy in place. It seems strange to be asking whether a public sector body has a social (value) strategy and in truth the vast majority of course already have one, but under a different title. What is needed is for these to be made readily available, with clear objectives and measurable targets for business to access in a form that makes it easy for them to respond.

Consultation with stakeholders: Our survey showed that of the 28% of public sector bodies that actually had a social value strategy, only 60% had actually consulted with its business and community stakeholders. If the act is to have any really impact, it seems essential that business (as the new social value providers) are consulted and that community needs are properly recognised and prioritised.

Agreement on measurement: Procurement and commissioning officers are at the forefront of the tender process and it is clear that they need much more guidance around measurement and metrics. Some use financial metrics (e.g. SROI) and others use non-financial information (e.g. narratives and case studies). For the sake of transparency, it is important that public authorities develop a clear list of needs, along with appropriate measures, otherwise business will struggle to respond.

A clear legal approach: If social value is to be worth anything, it needs to be in the contract which means that it must be deliverable, measurable and verifiable. This is perhaps the weakest link of the act, with a clear ambiguity about the legality of demanding local sourcing, for instance. Indeed this is one issue that the big service providers are most likely to resist. Despite reputation, most large corporates are very supportive of the act but our survey shows that while business is broadly supportive they will inevitably challenge strategies that are not clearly thought through.

In summary, it is clear that the social value act offers a unique opportunity to tap into the inherent goodwill of business and transform public sector procurement by maximising the link-ups with the third sector and social enterprise. However, this opportunity is in danger being missed by a public sector that has not yet grasped its potential and the power that the act has to deliver a better society.

If you are a public sector body you can take our survey here

Or read the full survey here