Summary of Central Government Procurement Policy on Social Value
Not for the faint hearted this one: Crown Commercial Services: Procurement Policy Note 06/20 Social Value in the Award of Central Government Contracts.
Welcome to 2021 everybody, and with 1st January comes the central government requirement that Social Value is to be applied to all new procurements.
So, what does this mean in practice? What is being required is that social value is ‘explicitly evaluated’ in all central government procurement – this includes central gov departments, their executive agencies and non departmental public bodies - 573 distinct organisations in total. It’s anticipated that £49bn of public spending annually will be potentially affected, impacting every market government buys from.
‘Explicit’ evaluation means that commercial teams within these organisations must select social objectives which are relevant and proportionate to their procurement activity, and a minimum weighting of 10% of the total score should be applied.
A Guide to using the Social Value Model has been created, and a set of Themes and Outcomes for Social Value is annexed to PPN06/20. So we’re not short of guidance but this is pretty new stuff for everyone, both for those who are commissioning social value, and those designing tender responses and ultimately responsible for delivering social value.
In a nutshell, the ‘Themes and Outcomes’ sit within BIG headings, like ‘Fighting Climate Change’. Activities are then suggested that organisations can deliver to address these BIG issues.
In practice though, Social Value should be relevant and proportionate to the type and value of contract activity. So, the first challenge is for the procuring team to decide which Themes and Outcomes are relevant for the contract they are tendering, the second challenge is for those responding to tenders to decide which activities will add the most social value, are deliverable, and will differentiate them from competitors.
Understanding the macro environment that you work in is vital. For public procurers that will include a socio-economic assessment and/or an assessment of demographics based on the specific social priorities of your department, cross referenced against Themes and Outcomes priorities (and discussed with internal clients for their opinion of what ‘good’ social value related to their area of activity looks like).
For businesses on the other hand, it’s about understanding how existing and new operational processes can add maximum social value without completely reinventing the wheel for each new contract.
I spend much of my time working with clients to help them understand how to structure Social Value activities to work to their strengths. Yes, this is going to require new ways of working, but most organisations are surprised by how much ‘unstructured’ Social Value they already deliver.
The key, frequently is in structuring, recording and communicating this activity for both commercial and community benefit. Successful contractors will demonstrate both an understanding of Social Value, and a project plan and process for delivery of social value activity which will be monitored and evaluated for impact.