Achieving community benefit through social value
Date published:
The Chamber’s latest column for The Journal by Tim Marsden, knowledge manager
In the process of putting together this article, I had a couple of topics in mind. In the end, I decided to go with social value. I’m sure most of you reading this will be wondering what social value is and what it’s got to do with you. The answer is, probably a whole lot.
Legally speaking, the Social Value Act 2012 states that all public bodies (councils, schools, NHS, etc.) must consider how what they are proposing to buy improve economic, social and environmental wellbeing of an area.
Practically speaking, social value in procurement is about making sure that what a public body buys creates additional benefits for society.
According to HM Treasury’s Public Spending Statistics, gross spending on public sector procurement was £379billion in 2021/22 across the UK. There was an increase of 7% (£24bn) between 2020/21 and 2021/22, which is perhaps understandable given the circumstances in the world at the time.
In the public procurement space, social value can form a significant part of the % score available when your tender is scored. A quick skim of live tenders in the North East on gov.uk suggests a current range of 5% to 25% of the marks available is for social value.
Whilst social value has its roots in public procurement, I would argue that if we truly want to create a more inclusive economy, we should also look at what the private sector can do to support social value.
Back in August, my colleague Marianne O’Sullivan wrote about the Chamber holding a roundtable with the North East Child Poverty Commission where businesses were able to give feedback on the commission’s child poverty strategy for the region. They spoke about how work experience was a key topic, with the need to make experience publicised and accessible to a wider range of people from different socio-economic backgrounds.
In the North East, there are 155,000 private sector businesses. Imagine the impact you could have if a percentage of everything you purchased, tendered for or procured included a social value element in the contractual terms.
Two of the leading proponents of social value in the North East are Esh Group and ISG. ISG is committed to having a minimum of 25% social value on every project, compared to the contract value, by 2024. Similarly, Esh Group has a long and well-established programme of social value.
So, when you’re looking to procure your product or service, I’d encourage you to take a look at how best you can create social value. Is that employing or buying locally? Is volunteering part of your requirement? Are you committed to prompt payment? Are you employing veterans?
If you can start to address some and more of the initiatives I’ve mentioned above, perhaps we can start to positively address some of the challenges that exist in our economy.
We at the Chamber continue to work with Partners to deliver effective and timely content for organisations to learn and develop their social value offering.