The one-year-old UK Government’s Social Value Act Enhancement (Procurement Policy Note 06/20) that made it mandatory for all government procurement departments to include social value delivery in their scoring criteria for public tender bids has changed the procurement landscape radically.
However, in its early days Minister Jacob Rees-Mogg presented sudden changes to regulation, which initially has the potential for local communities to access £1.5bn additional resources to increase social and environmental wellbeing.
We at whatimpact.com have been operating in the social value sector for years now. Our platform helps companies deliver and report on social value locally with proven impact. We also work in collaboration with many local authorities and organisations in order to identify the challenges in local social value delivery.
There has been a huge learning curve for local authorities across different departments from economic development to community engagement. In the early days of new procurement requirements, challenges have been identified throughout the process: from tender and bid preparation, to delivery and finally reporting. However, opportunities definitely overcome early day challenges. Ditching the intention to reach UN Sustainable Development Goals (SDGs) and help communities to recover from the impact of the pandemic is not a solution. One must remember that the concept of social value and its role in procurement is new. It is only natural that when new practices and processes are created in an already complex procurement environment, it takes time to identify the most beneficial form of implementation.
The legislation has transformative potential and thus it is too early to follow Mr Jacob Rees-Mogg’s suggestion of rolling back the focus on social value and ethical procurement altogether.
We strongly disagree with this for three reasons:
- There is a huge need for local social & environmental improvement
As the gross spending of the UK Government is around £357bn annually, it is estimated that contractors could easily contribute £1.5bn worth of resources for social and environmental value delivery in local communities, in addition to their regular corporate social responsibility activities.
We see a huge opportunity for government tendering to generate close partnerships between local and nationwide companies and local charities, community groups and social enterprises and to improve the lives of citizens across the country.
- The UK Government is a global front-runner in social value
The UK has been a front-runner in embracing and promoting sustainable procurement. Around ? of European countries have similar regulations in place (either mandatory or voluntary) and the rest of the world will soon follow.
The UK taking a step back is against all the global trends and commitments to ethical procurement and abandoning the intention to reach UN SDGs and help communities to recover from the impact of the pandemic is not a solution.
- Scrapping social value will be a disadvantage to SMEs
We of course share the Minister’s concerns over SMEs and them not being able to benefit from these policy changes, however it is clear that reducing the weighting on social value is just moving us backwards, as SMEs are not winning bids through providing the best price.
SMEs are inherently active in social value delivery on a local level, and they always have been. They simply lack the same language and scalable systems that large corporations possess. What SMEs really need is a level playing field to bid and evidence their social value in this new situation.
The solution lies in more equal and transparent processes and practices. Also, in efficient low cost technology available for all. Our research has demonstrated that expensive SROI social value planning and reporting tools are not accessible to many SMEs and instead have helped to create a tick-a-box approach to social value among large corporations. SROI calculation tools becoming popular in the social value space has driven many SMEs away from bidding, and this is where the problem lies, not in the inclusion of social value in the weighing of bids. This is however luckily an easy problem to solve by providing access to low cost tools to deliver and report on impact.
Therefore we propose a different approach.
Instead of rolling back social value, the route to success is to develop processes and practices, to focus on realistic, validated social value activities, and not to abandon the amazing government initiative altogether.
You can read more about our research on the impact of the Social Value Act and our proposed solutions to the challenges it presents for companies and local authorities across the UK in our most recent white paper accessible here.
Throughout the changes in legislation we’ve been amazed at the commitment of local authorities and companies to make the most of social value. There is a true interest to help local communities to recover from covid-19 aftermath and increasing inequality challenges in the UK and local authorities across the country are championing the global movement towards ethical and sustainable procurement.
Tiia Sammallahti is founder/CEO of social value platform whatimpact.com
Whatimpact is launching a new localised version of the platform for local authorities to help companies match with charities, social enterprises and unregistered community organisations within a specific area and report on their impact.
