The Social Value Act: What is it, and why is it important?
The Social Value Act: is Possibly the Most Important Piece of Legislation you've Never Heard of. Photo By: Carl Heyerdahl
What is the Social Value Act?
When Social Value UK analyses the results of its #bigsocialvaluesurvey, which launches this week, it will provide us with the most up-to-date and comprehensive assessment of how public and private sector organisations throughout the UK use social value in their procurement processes.
Outside public sector procurement circles, the Public Services (Social Value) Act (to give it its proper name) is a little-known piece of legislation which has had far-reaching implications and inspired similar legislation in places including Scotland, Canada and Australia. First proposed in 2010, it has outlasted two Prime Ministers and three General Elections and now impacts £25 billion of UK public spending per annum, and provides the public sector with a mechanism to expect more from its suppliers and raise standards and behaviour across corporate Britain.
Back in 2010, when then newly-elected MP, Chris White, set out to convince Parliament that Social Value was a good idea, he could never have imagined the events that would happen in the intervening years: The collapse of Carillion; Brexit; the rising global challenges of climate change; and the collapse of public trust in politicians and public institutions amid an increasingly hostile world order; the refugee crisis; and now the COVID-19 pandemic. Social Value has never been more important.
Meet the people behind the Act
A decade on, we spoke to the three key people behind the Act: Chris White, the MP who proposed the Bill and shepherded it through Parliament; Andrew O’Brien, his then Parliamentary Aide who played a key role behind the scenes and suggested social value as a potential topic for the Bill in the first place; and Mark Cook, a leading expert in sustainable procurement and the lawyer who helped to draft the legislation and negotiate its path through the Cabinet Office.
We asked them how they thought it was doing; and whether it has lived up to their expectations. With the full effects of the COVID pandemic still to be felt, what role do they think the Social Value Act could play in our recovery, and what more needs to be done to ensure it has a greater impact and helps us #buildbackbetter?
What challenges has the Social Value Act faced?
When the UK Government formally reviewed the Act in 2015, the report revealed that everywhere social value is used, it has a positive impact. It makes services better, it has a positive impact on communities, and it improves relationships between procurers and suppliers. While this impact might sometimes be difficult to quantify, the general consensus is that you don’t want to go back once you start using it.
However, whilst the Act has undoubtedly been transformative for commissioners who have embraced it, Chris, Mark and Andrew all agree that it has a lot more to offer, and they would like to see it more universally applied.
One of the main problems is that procurers don’t always know what social value is, how to quantify it, or how to balance the need for value for money with value for society.
“Social value solutions are often not immediate, and procurement officers and budget holders need to see cost savings now" Chris says ", it’s very often how their work is evaluated. Even if the tender is about things that are meant to be mid to long-term - such as wellbeing, mental health or volunteering - procurers may still be tasked to be thinking short-term, which means social value is not going to be as attractive as it could be in the decision-making process.”
Andrew believes that many organisations are not yet willing to give social value the commitment it needs to work well. “Many still see procurement as getting a product in the quickest and cheapest way. They don’t see transformative potential and can’t see beyond the purchasing point. There is still work to be done around raising people’s vision to think more holistically. We’ll often see that organisations are happy to do the easy stuff but do not transform how they do business to get maximum social value, which is the real challenge. I work with many social enterprises that still find the process very frustrating.”
“Social value sometimes doesn’t have the traction it should have because there isn’t enough investment in procurement and commissioning skills - people are often overworked and can’t see it through,” he explains. “We need investment so people can gain the skills and competence and better understand how their organisation’s policy impacts what they are doing.”
Understanding what society values
At Samtaler, we see a lot of public sector procurers who don't understand what their communities need; what resources their suppliers have to offer; and how their procurement process can be adapted to allow them to make the purchase that they need while also contributing to the strategic aims of their organisation.
“Ultimately, the question about social value is a democratic question. What do people in the community want to see? Surprisingly very few local authorities and public bodies respond to that or know what people want, which is why they struggle to articulate and deliver social value well.”
Andrew O'Brien, Director of External Affairs at Social Enterprise UK
Empowered Communities
“The primary role of the state is to provide public goods and services and social value is at the front end of this. The long-term potential is massive if you get this right and it feels like a huge lever that government are not using effectively. There’s no reason we shouldn’t be doing this all the time. You can deliver better services that improve people lives while also ploughing the surplus back into communities in an environmentally sustainable way that saves money in the long-term. Why would you not want to do this and extract maximum value from taxpayers’ money?”
Social Value needs Ambassadors
Looking ahead, the trio believe that providing the government build on the existing Act and don’t attempt to reinvent the wheel with a new policy, there is huge potential for the Social Value Act to become embedded in the way we do things.
“We need social value ambassadors to keep lobbying the government and showing them that there are plenty of solutions to existing problems and challenges hidden in this existing light-touch legislation.
Once we start developing the tools to measure and quantify social value, it will become easier. This is when social value will get closer to reaching its potential. Once we start developing the tools to measure and quantify social value, it will become easier. This is when social value will get closer to reaching its potential.”
Solutions and strategies for a values-based society
As the UK finds its feet in a post-COVID recovery, the Social Value Act seems more relevant than ever. It challenges organisations to maximise social, environmental and economic wellbeing in the communities most affected by COVID and importantly provides organisations with a mechanism that allows them to achieve this by working alongside social enterprises, charities and small businesses with a social purpose.
“We spend £3bn a year on public procurement. That’s three times the size of the NHS," says Andrew. "If we take it more seriously, big returns will be had. Hopefully, in ten years, we won’t be talking about it as it will have become so embedded in the way we do things that it will have become the norm.”
“Post-Brexit we’ll be looking far deeper at domestic procurement policy so that brings opportunities to look afresh at how we can get more impact from public spending. I think that post-COVID, social value will be seen as something fresh that captures that the resilient, community spirit of a values-based society. If we can connect the Social Value Act with this approach then this is when we will see an even bigger impact on our lives and the lives of the communities in which we live.”
Chris White
How we can help
At Samtaler, we understand the importance of your social value commitment. You’re here because you care about the impact your business has on society and want to be better. We want you to succeed, and we know from experience that achieving social value requires skill, strategy, and support.
To find out how we can help send an email to hello@samtaler.co.uk
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