Social value?

The Social Value Act (SVA) allows public bodies in England to score the creation of social value when they are putting public services out to tender. Bidding companies can score extra points for the way in which they will deliver the contract, where they can show they will have a positive impact on the environment or local communities. Employing local people from low-income communities can be scored, as can volunteering, or carbon reduction.

I’ve championed the Social Value Act for several years now, arguing in the Joint VCSE Review that its powers should be used by default, rather than as an exception. What’s not to like: the taxpayer gets extra value for money, and social purpose organisations are more likely to win public service contracts?

So I was concerned when I read in the excellent report on disability services commissioning from the Voluntary Organisations Disability Group (VODG) of one charity’s experiences of the SVA being used in such a rigid way it felt almost impossible for a small organisation to demonstrate the kinds of added value being asked for. I’ve subsequently talked with the charity and seen the part of the tender specification, which accounts for 20% of the tender score – an unusually high proportion. It’s a frustrating study in what results when you see a useful , creative concept through the lens of a bureaucratic world view. The form has been written with large private sector contractors in mind, and over 8 pages itemises a host of specific kinds of social value. Some makes sense: the number of employees, apprenticeships and work placements for people from specific local communities features. But there is also a long list of prescribed kinds of employee volunteering which bidders can commit to, with a strong preference for visiting schools and giving careers talks for some reason. Each kind of social value has a multiplier applied to it, which means that each ‘unit’ of social value may be worth £1, or nearly £30,000 for some of the employment related units. It looks like it’s been derived from the NHS Sustainable Development Unit’s helpfully-intended calculator.

You can see the rationale: if social value is to be scored, there has to be some rigour to it. How do you compare carbon reduction with creating volunteering opportunities? But the problems are also obvious: what would be the point of committing to any of the kinds of social value which attract 1:1 scores, if some attract 1:30,000 scores? And for an organisation with a small staff team and low margins, the ability to commit to large amounts of employee volunteering will be much more limited than for a large corporate. The charity I talked to creates huge social value: their whole approach creates community connections, draws on volunteers and social action as its core operating function, and no public money is siphoned away from the community to offshore tax havens. But it could easily be out-competed on social value in this format by a large corporate which is clever about the way it cites its employee volunteering programme in all of its tenders.

One of the problems here is that social value is being placed in a gap where commissioning for outcomes should be: if organisations were judged on the wellbeing outcomes they created, a good social purpose organisation would already have a built-in advantage. The commissioner in this instance sees social value as something created in addition to the main purpose of the contract, which doesn’t allow them to value organisations which build social value and community impact into the way they deliver their core work. Ironically, I can find little evidence of not-for-profits being involved in designing the tools and calculators developed to enact a change in the law which was intended by parliament to work in support of those organisations.

The other problem is the balance between the need for transparency and fairness in public service contracting, which is subject to legal challenge, and the desire to value something which is valuable precisely because of its subjective, locally-decided nature. If other areas emulate the approach I saw, social value will be killed off as a concept just as it is gaining momentum.  So it feels urgent that the sector, government and NHS promote good approaches such as Liverpool CCGs social value objectives (picture below)  and Greater Manchester’s framework which, crucially, includes the intention to develop the voluntary sector:

  • Promote employment and economic sustainability – tackle unemployment and facilitate the development of residents’ skills
  • Raise the living standards of local residents – working towards living wage, maximise employee access to entitlements such as childcare and encourage suppliers to source labour from within Greater Manchester
  • Promote participation and citizen engagement – encourage resident participation and promote active citizenship
  • Build the capacity and sustainability of the voluntary and community sector– practical support for local voluntary and community groups
  • Promote equity and fairness – target effort towards those in the greatest need or facing the greatest disadvantage and tackle deprivation across the borough
  • Promote environmental sustainability – reduce wastage, limit energy consumption and procure materials from sustainable sources
Liverpool CCG
Liverpool CCG

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