Smarter Procurement: Social Value

In part three of our smarter procurement series, we look at how the public sector uses social value to shift the focus of procurement from short-term cost savings to meeting long-term business objectives.

Social value in public sector procurement has gained importance since The Social Value Act was passed in 2012. But seven years on, it’s not always viewed positively. There’s the belief that the only things it adds to the procurement process are time, cost and complexity. Further, that it may mean you have to compromise on quality. Social value is also often viewed as being less relevant when it comes to procuring digital products or services. And as something to be avoided if you’re procuring services under the threshold where it becomes mandatory.

When it comes to public sector digital procurement each of those arguments can be countered. Yes, it’s true that assessing it can add time, cost and complexity, but only if the system for doing so is poorly implemented and inflexible. The small amount of extra time it may take should be balanced by the potential value it can add for your organisation.

In fact, if you want to get more value from your procurement, social value isn’t something to pay lip service to. It needs to be an integral part of your procurement process.

IT is no longer a service that’s bought in. It’s no longer a tool we use to do part of our job. Today, digital products and infrastructure are the heart of an organisation. They’re where we spend a large portion of our budgets. As such they need to reflect the organisation’s own values and support their overall goals.

What is Social Value?

Social value is the positive social and environmental impact that a procurement decision has. Will purchasing this service create local jobs? What impact will it have on the environment? What does the company do regarding it’s carbon footprint?

These impacts are usually translated into financial amounts so that they can be added up and compared.

Why consider social value in procurement decisions?

Support for your long-term goals

More and more organisations are acknowledging that the measure of good procurement is not just costs saved any more. It’s intrinsically linked to how well the organisation is able to innovate and help the organisation meet long-term goals.

These long-term goals of most public sector organisations can’t be divorced from social and environmental factors. By giving social value an increased weighting in procurement decisions, procurement can go even further in supporting these long-term goals.

Increasing the impact of your spend

With public sector resources being cut to the bone, you need to get as much value as you can from everything you spend. Although assessing social value won’t increase the money you have to spend, it enables you to achieve more with every £1.

Gain public support

Data centres with hefty carbon footprints, personal data that’s not secured, services that are outsourced to the other side of the world. These can all have a negative impact on an organisation’s image, especially if they’re in conflict with what you’re trying to achieve. Being able to show the social value that underpinned your procurement decisions can buy you valuable public support and credibility.

Making it work

Endless tick boxes and irrelevant requests have given social value assessment a bad reputation. They’re seen as time-consuming and off-putting for all but the biggest companies. To make social value a part of all your procurement, you need to change the way you do things:

Make measures local, relevant and practical

There’s plenty of guidance on assessing social value in public sector procurement. You’ll find the collated in the National TOMS framework. There’s a lot there and the key is only to use measures that are relevant to your organisation. Otherwise you risk overwhelming yourself and the suppliers. Decide on your social value priorities, adapt your measures, keep the focus local, and get input from local suppliers as to what is feasible for them.

Keep it simple

Complicated processes and jargon can put off smaller local suppliers who would offer good social value, but aren’t used to public sector procurement. Keep processes and language simple, and only ask for what you really need. Give examples to make it even easier. Remember that the smaller the organisation, the more expensive the time they spend on the tender process is for them.

Be flexible

One size cannot fit all when it comes to social value. Adapt your requirements for different types of suppliers, otherwise you’ll be wasting their time and yours.

In summary

Social value is as relevant in procuring digital services as it is for any other category. Using social value in a thoughtful and flexible way makes it possible to:

• Get procurement decisions to support long-term objectives
• Improve public perceptions
• Increase the impact of every £1 you spend
• Create opportunities to innovate and solve problems with local suppliers.

You can read part 1 and 2 of our smarter procurement series, Collaboration and Agile.