Social Value in Procurement 101
We often get asked about Social Value in procurement and what it means for suppliers. Here's the basics.
Back in September 2020, the publication of Procurement Policy Note (PPN) 06/20 launched a new model to deliver social value through government’s commercial activities. Since then, the model has garnered a lot of attention, but what do suppliers need to know about it?
We have taken the time to breakdown all you need to know! This blog will cover what is the Social Value Model, breaking down the model and what this means for public sector suppliers.
What is the Social Value Model?
The Social Value Model (‘the Model’) sets out government’s social value priorities for procurement. As the guide states: “The huge power of public money spent through public procurement every year in the UK must support government priorities, to boost growth and productivity, help our communities recover from the COVID-19 pandemic, and tackle climate change.” The model is to be applied to all procurement activities since 1st January 2021. The SVM applies to all central government departments engaging in commercial and procurement activities. This includes central government’s executive agencies and related public bodies.
Note: The Social Value Model does not apply to all spend. It only relates to spend within the scope of Part 2 of the Public Contracts Regulations 2015. However, the model can be applied voluntarily to spend outside of these parameters if desired.
Breaking down the model
There are five main themes within the model and eight subsequent policy outcomes relating to each theme.
- Theme 1 COVID-19 recovery
- Policy outcome: Help local communities to manage and recover from the impact of COVID-19.
- Theme 2 Tackling economic inequality
- Policy outcome: Create new businesses, new jobs and new skills.
- Policy outcome: Increase supply chain resilience and capacity.
- Theme 3 Fighting climate change
- Policy outcome: Effective stewardship of the environment.
- Theme 4 Equal opportunity
- Policy outcome: Reduce the disability employment gap.
- Policy outcome: Tackle workforce inequality.
- Theme 5 Wellbeing
- Policy outcome: Improve health and wellbeing.
- Policy outcome: Improve community cohesion.
What does the Social Value Model mean for public sector suppliers?
When responding to central government opportunities, public sector suppliers should expect to answer a question relating to social value. As a minimum, the social value question should be weighted at 10%.
In order to prepare, we suggest that you make a list of your company’s policies and actions that contribute to social value. In addition, we highly recommend that you ensure your company has a way of monitoring and measuring your social value. As Catherine Manning (Interim CEO of Social Value UK) said earlier this year at the Social Procurement Festival 2021, there is a need to measure social value, both quantitively and qualitatively. Failure to do so, puts the whole social value movement at risk. These actions will best prepare you to respond to social value questions and help your company to ensure that you are delivering social value.
How will the model be regulated?
On page five of the guide, it is ensured that a robust system has been embedded to ensure compliance across the procurement landscape. The following activities have been implemented:
- The Cabinet Office Controls Team will monitor that in-scope organisations apply the Model when the team conducts the spend controls process.
- The Public Procurement Review Service will conduct spot checks to ensure in-scope organisations apply the Model in all relevant procurements.