It is becoming increasingly clear that the prevailing culture of focussing on short-term savings and chasing the cheapest bid at the expense of higher quality long-term solutions, represents an unsustainable false economy for public procurement.
This was acknowledged by the Communities and Local Government Select Committee last month who reported that not enough councils are securing value for money in their procurement activities.
We need to carry on highlighting such shortcomings, but it’s also important to note – as the Committee did – that some councils are bucking this trend. They are adopting forward-thinking procurement processes that incorporate social value objectives.
I recently interviewed three of these councils – Knowsley, Durham and Lambeth – in order to understand their social value strategies. We’ve produced a short slide pack, Commissioning for Social Value (PDF, 3.3MB), summarising these, and will produce a full report covering more councils later this year.
Here are some common trends and key lessons for charities and government – both local and central – to consider when approaching commissioning for social value outcomes.
The responsibility to advance any social value agenda does not rest solely with the public sector. Voluntary organisations have to embrace change and adopt a collaborative mind-set towards working with local authorities.
2. Gather intelligence
While recognising that many charities are under financial pressure, they should nonetheless try to find out as much as they can about their council’s priorities and talk to elected members and local authority staff about how commissioning for social value could help to achieve these priorities and better value for money.
3. Highlight your social value in bids
Voluntary organisations that want to produce stronger contract bids should consider what added social value they bring and how to communicate this. In some cases, using a tool such as the Cabinet Office’s Unit Costs Database can provide evidence to support your case.
Strong political leadership and ‘buy in’ from elected council members is essential for transforming local commissioning processes and developing a social value strategy.
2. Embrace dialogue
Councils should involve the community and service users in designing their approach and identifying local social value priorities. Launching an open dialogue and holding regular meetings with the voluntary sector can help to secure this engagement.
3. Don’t let staff turnover impede change
Particular effort should be made to retain council staff who are involved in the transformation of the commissioning culture. Constant flux in personnel is often cited as a major barrier to improving commissioning and procurement.
4. Provide support to SMEs and charities
Providing support to SMEs and the voluntary sector to help them navigate and compete in the commissioning process is important for achieving social value objectives.
5. Understand the law
There is a widespread but mistaken assumption that seeking social value outcomes runs the risk of legal challenge. However, the Social Value Act states that public bodies are required to consider social value for contracts above EU thresholds and new EU procurement directives, planned for 2014 will explicitly permit the inclusion of social and environmental criteria in the procurement process.
1. Get behind the Social Value Act
Government Ministers should champion and support implementation of the Social Value Act as part of their overall commitment to improving commissioning and achieving better value for public money.
2. Help share best practice
There are 100s of local authorities and thousands of councillors across England who could benefit from the sharing of best practice about how to improve commissioning and incorporate social value. As such, there should be a specific effort to reach out to elected members.
3. Train the right people
Building on the Commissioning Academy, high quality training should be provided, particularly for procurement officers, to enable effective implementation of the Social Value Act. This should include identification of barriers facing voluntary sector and SMEs in public procurement.
We will be producing a more detailed analysis covering additional councils later this year. If your council is developing a social value agenda and you think it should be part of our research, or if you have bid for contracts which include social value criteria, we’d like to hear from you.