Delivering Social Value in the Public Sector
Public Services (Social Value) Act came into force in January 2013, since then procurement and commissioning have had the challenge of improving economic, environmental and social well-being of their communities. Value is much more than financial.
According to the act public bodies include; Local and Central government, NHS, Fire service, Police Service and Housing Associations.
The problems Public Sector Organisations as a whole face is that each area is different, has different needs and requirements and therefore would be both inappropriate and almost impossible to treat them all the same.
Organisations often ask themselves what additional value can we provide to the community? Things like eradicating modern day slavery, health, and social care, reducing poverty and inequality. Commissioners seek to efficiently use resources to improve conditions for their communities and Procurement ask what additional value can our providers add in terms of social value? Factors that procurement may consider are achieving value for money considering social value aspects, compliance to legislation, minimising risk, and other non-price factors. These can be achieved through:
- Strong Procurement Leadership
- Training and Skills Development
- Partnerships and working with supply partners
- Category Management
- Performance Management
Buyers have clearly moved away from the traditional awarding contracts based on lowest price to, driven by the introduction of the Social Value Act considering MEAT (most economically advantageous tender) criteria for award to ensure others aspects such as social and environment are considered too.
For Procurement understanding social value, benchmarking, and working in partnership to develop a strategy in line with community priorities for the long term is key. Buyers, introducing Social Value into their procurement processes and contract frameworks to obtain the best for their communities is simple; embed social value into all aspects of the procurement cycle including:
Embed social value into product and service specifications; this means engaging the supply market to develop effective and realistic specifications. Work with commissioners to understand and ensure their community requirements are being met and these requirements and expectations are translated to the service providers.
Consider how Social Value can be included in other areas such as supplier appraisals, contract and performance management. The strategy taken should be in accordance with the product or service, its stakeholders, procurement value/size and impact on procurement.
Sounds easy? You would be wrong! Ask yourself, what percentage of your supply base understand what social value is? If they don’t know how can they begin to offer or even, consider it?
Not for profit organisations such as charities are most likely to consider and embed Social Value whereas SME’s and Private Sector Organisations have not been so quick to realise the value. Consultation with these markets is essential to avoid limiting your market and driving those prices up. Education and engagement with supply markets is essential to continually increase awareness, innovation and work towards those social value goals.
Monitoring and measuring implementation and impact of social value in procurement contracts can identify how much the process is being driven by value for money, environmental and social outcomes.
This article was written by Susan Rashid FCIPS, MBA, CPSM, PGCE, Founder & Managing Director of SR Supply Chain Consultants and Co Founder of SR Strategic Sourcing.
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