July 18, 2018
Why should a commercial organisation spend its hard-earned cash investing in social value projects? Well, value, rather like beauty, is in the eye of the beholder and documented benefits include a range of things like increased employee engagement and retention, higher job satisfaction, increased profits and enhanced internal and external communication.
Another benefit could be gaining a competitive advantage. On June 23, the government announced that all large central government contracts must “explicitly evaluate social value where appropriate, rather than just ‘consider it’”. Where central government goes, local government and the private sector are sure to follow; social value could be coming to a contract near you soon!
But will it be a cost you have to accept in order to win contracts? Or can it bring you quantifiable benefits?
What is social value?
The Public Services (Social Value) Act was introduced in January 2013, and it means public sector commissioning authorities must think about how they can secure wider social, economic and environmental benefits. For example, they should base decisions of what to commission on the benefits to the community. It is not enough for a company to deliver on price; it must also be able to point to real community benefits that it will generate. From the commissioning authority, this will then flow down the supply chain and buyers will evaluate suppliers’ social value and assess areas such as supporting the local community, reducing waste, sustainability, apprenticeships and work opportunities.
For a company, taking the time to invest in initiatives that deliver social value is not only necessary for working with the public sector, but can also provide solid ways to improve your business and drive success. Social value drives stakeholder involvement, client engagement and provides a competitive advantage for your business – suppliers, buyers and the wider society have further reason to work with you.
What good does it do?
In the public sector, good practice states community benefits to the value of 5 per cent and 20 per cent of the contract value should be achieved as a result of the procurement, i.e. 5p-20p in the £1 should be going directly to the community. This is an important factor for public sector bodies when deciding what services to commission as questions on social value will be included and evaluated in a tender stage. Bidders are therefore more likely to succeed if they have a structured, specific and viable social value offering.
Overall, the Social Value Act was introduced to promote the issue of greater value for money when procuring goods and services and the benefits to the local community; yes, you need to deliver at a certain price, but also show what more your company can bring in terms of social and community benefits – value for money.
How to benefit from social value
Many companies are nervous of the principle of social value, but it is about introducing initiatives that are suitable for your company – however large or small – and identifying the things that you already do that deliver benefits for local communities, for instance do you support a local charity? Again, this reinforces why other suppliers and customers should work with your business and drives success.
Public sector commissioners understand that your social value commitments should be relevant to your company size and what is actually achievable.
Social value is about considering the wider actions and how this can benefit everyone involved; this may be on a smaller scale if you are a small company and may involve introducing recycling initiatives or recruiting a local apprentice.
The promise made in a tender is one thing, but actually delivering on it is what matters, so buyers are more interested in realistic commitments, which suppliers actually follow through, rather than empty or unachievable claims.
Executive Compass specialises in bid management and bid writing