Are you a business that bids for local and central government contracts?
The government spends £300bn each year on a wide range of goods and services. It is trying to make it easier for all sizes of businesses to bid for public sector contracts at national as well as local level.
It is also keen to see greater use of the Social Value Act – or Public Services (Social Value) Act 2012 to give it its full name. This Act requires all public sector organisations, and their suppliers, to look beyond the financial cost of a contract and consider how the services they commission might also improve the economic, social and environmental wellbeing of an area through the delivery of ‘social value’ alongside performance of the contract.
What is social value?
The UK government describes social value derived from procurement as ‘the positive legacy created through the performance of a contract’. There are three categories of social value:
- Social: activities that promote a united community
- Environmental: efforts to reduce waste or pollution etc.
- Economic: training or work opportunities for disadvantaged groups
The idea behind social value is that we need to spend public money in a smarter way. In simple terms, social value can be seen as savings to the public purse or net non-financial gains to a community as a result of a public sector contract. Key is the principle of ‘leverage’.
An example – a construction company building a new hospital may commit £100,000 (the input) to training 100 homeless people. If 90 complete the course – that is an ‘output’. If, as a result, 40 find a job and come off benefits, this is a significant ‘outcome’ – generating social value with a multiple over and above the initial £100,000 input.
This sort of leverage can help win public sector contracts.
Recent changes
From January 2021, all major procurements must now explicitly evaluate social value, rather than just consider it. The new social value model is no longer all about quantity but the quality of the impact organisations are making in their communities.
Companies should evidence and measure the social, economic and environmental benefits they will deliver over the life of the contract. In public sector tendering margins are often tight, with little room for manoeuvre on price. However, with 10 to 20% weighting on social value measures, socially concerned businesses will have a competitive edge.
A new initiative
Each year there is approximately £700m of public procurement in Northamptonshire alone. Imagine just 10% of this channelled into priority social issues.
To enhance social value and impact in the county, the University’s Jay Baughan has created a new Changemaker Incubator (CMI) – a dedicated framework to ensure maximum social benefit from public sector contracts in Northamptonshire. It does this through underpinning and measuring the socio-economic development provided by over 200 of the county’s voluntary, charity and social enterprise (VCSE) organisations – through a proprietary Social Impact Matrix® (SIM). The SIM consolidates the UN’s 17 SDGs into four social impact themes:
- Every young person can flourish
- Positive health and wellbeing are fostered and promoted for all
- Cultures, heritages and environment are respected, protected and enhanced
- Entrepreneurial opportunities are supported
The Changemaker Incubator creates a strategic link-up across the two county councils, the police and fire services and the NHS under the Social Value Act. It combines their collective supplier base and contracted social value commitments into the four social impact themes – which underpins the VCSE organisations providing their services
within them.
For the first time in Northamptonshire the county has a single framework which not only incubates and measures VCSE activity and social impact across the county but one that replaces the existing inconsistent supplier self-reporting process. Suppliers become part of the collective solution, recognised accordingly with the University validating every penny of social value claimed by the businesses delivering the £700m of county spend on goods and services.
Benefits for business
The Changemaker Incubator is open to local businesses as well as suppliers from across the UK. It is accessed via the University, through a traditional annual membership. Membership publicly positions businesses within the county’s four social impact themes and recognises their engagement with VCSEs and resulting social impact.
Businesses thus build-up their social impact credentials, the metrics and details behind the social impact and the VCSEs supported within themes. It’s an opportunity for more strategic, focused and local CSR and a new approach to cross-sector partnerships – the public, private, third and academic sectors working together for greater collective impact.
Being part of the county’s Changemaker Incubator establishes a strategic alignment with the county, enabling business to evidence its social impact and contribution to socio-economic development which transforms lives – creating a better business as well as community environment for us all.
Go on, join us – become a real Change Maker!
If you would like to know more, contact jay.baughan@northampton.ac.uk or adrian.pryce@northampton.ac.uk
