Social Value Portal CEO Guy Battle recently sat down with Helen Dodd of Instinctif, and former Labour Party Regional Director Malcom Powers to explain the future of Social Value under a Labour government.
Here are the key takeaways you need to know about.
More accountability and transparency
Rooted in the Social Value Act 2012, which was taken through Parliament predominantly by Chris White and Hazel Blears, Social Value enjoys bipartisan support.
Labour made its commitment to Social Value clear in the run up to the 2024 General Election, promising to streamline bidding processes, while enforcing greater transparency.
The party has also announced a Social Value Policy role in the Cabinet Office – as well as plans to establish a Social Value Council to drive best practice and accountability.
Guy urges the government to ensure broad and effective representation on this Social Value Council, from public procurement leads to businesses – including small and medium sized enterprises (SMEs) and Voluntary, Community, Social Enterprises (VCSEs).
Rising importance in procurement
Since the Social Value Act came into effect in 2012, Social Value weightings in government contracts have surged from 2.5-5% to at least 10%, with many reaching 15-20%. Some, like Manchester City Council, even apply a 30% weighting.
But even stronger enforcement is on the horizon with the Procurement Act, which comes into effect in February 2025. The Act will make Social Value still more integral to procurement by requiring both buyers and suppliers to publish KPIs on key commitments within contracts, which may also include Social Value delivery. Backed up by a requirement for transparency notices, this will mean that organisations which fail to deliver will inevitably get found out.
With Labour also promising to strengthen contractualisation of Social Value, the direction of travel is clearly toward greater accountability for both procuring authorities and their suppliers.
If you want to win public sector work under the new Labour government, you’ve got to have a Social Value policy.
Guy Battle, CEO, Social Value Portal
Guy also predicts a stronger focus on ‘remedies’ – this is when remedial actions are embedded into contracts, with businesses that don’t deliver committed Social Value being held liable for damages. If winning work is the ‘carrot’ of Social Value, there may be more ‘stick’ on the way.
Boosting British businesses and SMEs
Labour has indicated that a renewed focus on Social Value will serve to advantage local and British suppliers – a trend which Guy notes is already visible in local government procurement.
This is partially why Social Value enjoys significant and ongoing support among trade unions, which see Social Value as an opportunity to promote good work practices.
Trade unions want to drive good work, and they see an opportunity to use the Procurement Act to make good work a part of the decision-making process in procurement.
Guy Battle, CEO, Social Value Portal
The government’s promotion of Social Value will also offer benefits for SMEs, due to their community connections. SMEs are often already employing locally, working with schools, creating apprenticeships – all advantages that many national businesses lack.
In fact, our Social Value Insights Report report has found that businesses with a £5-10 million turnover on average deliver 129% of their commitments, compared with roughly 100% among companies with £0.5-1 billion turnovers.
Social Value: A business imperative
The commercial benefits of Social Value are many and well documented.
Data from the Social Value TOM System™ has shown that companies winning the Social Value portion of their bids are twice as likely to secure the contracts. Buyers, meanwhile, can deliver an additional 20% in Social Value on the average contract at no extra cost through local employment, upskilling, and community engagement.
A new and supportive approach to Social Value constitutes a major opportunity for both suppliers and procuring authorities. Guy advises businesses to prepare themselves:
Read the room: Labour is for Social Value and will drive it harder. Start coming up with your Social Value strategy now. Build relationships and think about how to embed Social Value into the way you do business.
Guy Battle, CEO, Social Value Portal
Get ready for a new era of Social Value
For more insights into the emerging Social Value landscape, listen to the full podcast.
And if you want to make sure you are in good shape to ride the wave of Social Value, explore our Success Factors Toolkit.
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