Our Money, Our Future: Opportunities for the Social Value Act
A Summary of Chris White’s review of the Social Value Act
Five years on from the Social Value Act becoming legislation, England and the rest of the UK are in a very different position both economically and politically. How has the Act influenced and helped to unlock social value since 2012, and what are the key challenges that have emerged in that time?
Social Enterprise UK published Our Money, Our Future in November 2017. This report reviews the impact of the Social Value Act on public sector spending. It was written by Chris White, who while serving as an MP put forward the Act as a Private Member’s Bill and guided it into law.
The report estimates that £25bn of public procurement spend has been ‘shaped’ by the Social Value Act, out of an annual public sector spend of £268bn. This leaves a long way to go, but shows the potential for extending the Social Value Act beyond its current state.
After summarising the current state of play of Social Value in England, in the UK, and further afield, the review outlines the key areas with opportunities and challenges for Social Value that are appearing. It also highlights four key areas where leadership and good governance will be critical in the coming years:
- Social Value Post Brexit
- Social Value in Infrastructure
- Social Value and Devolution
- Social Value in Workforce & Employment
Social Value Post Brexit
“The answer then is not either 100% local or 100% global, but an appropriate balance that combines regard for economic value with consideration for social and environmental capital.”
While the details of any Brexit agreement remain uncertain, the referendum result means that there will undoubtedly be changes in commissioning and procurement rules in the near future. This could potentially allow new models of procurement that give procurers and commissioners wider scope than existing laws. For example, new rules might allow the favouring of local providers, shifting to collaborative or cooperative tenders, or making decisions without a formal competitive tender process.
Social Value in Infrastructure
“…ensuring the wealth and opportunity created by … infrastructure projects benefits those who live and work in areas where those projects are happening should be a priority for us all.”
As it stands, the Social Value Act applies only to services, and not to goods and works. Even so some commissioning authorities have already started applying the spirit of the Act further. Social Value is already being applied across high profile projects such as HS2 and Hinkley Point, so it surely only a matter of time before Social Value becomes a standard feature of the other major infrastructure works that will account for billions of pounds spent over the next decade.
A bolder approach to including Social Value should recognise that for these projects, a long term view is critical to success, with Social Value embedded at the concept and planning stage, and that ensuring positive community impacts does not mean lower efficiency or effectiveness.
Social Value and Devolution
“…by their very nature, devolved administrations bring the democratic principle, cross-agency working, consensus-building and an aspiration to transform services to the table.”
The report notes that in the short and medium term, regional and local government may have the advantage in implementing innovative commissioning strategies. Devolved regions have been at the heart of the improvement in awareness, understanding and measurement of Social Value. Future opportunities exist around cross sector collaboration, building common cause and pooling resources to tackle challenges that the Mayors are now tackling, such as homelessness, youth employment and mental health.
Social Value in Workforce & Employment
“…to see the Social Value Act simply as a way of delivering apprenticeships would be to misunderstand its effect and potential.”
One of the most frequently seen areas of social value policy is around employment and training, and in particular apprenticeships: the Social Value Act has often been used as a way of delivering extra training and apprenticeships, and is likely to play a part in reaching the Government targets for 2020. Social Value also needs to be used to address the question of the quality of apprenticeships delivered and the impact they bring. Beyond apprenticeships and training the Act should also encourage commissioners in areas such as supporting ex-offenders, those with mental health issues, and assisting people to re-enter employment. Furthermore, the Act may be used to encourage a greater proportion of public sector spend on SMEs and Social Enterprises.
The report finishes with five key recommendations to help transform how social value is used and considered. Importantly, these include extending the scope of the Act, recognising that while many organisations, both public and private, have shown leadership so far, further regulatory drivers are needed to bring Social Value truly into the mainstream. The recommendations are as follows:
- Extend the Act Horizontally: to goods, works, planning, assets and wider infrastructure
- Extend the Act Vertically: by strengthening the language from ‘consider’ to ‘account for’, and requiring it through the whole commissioning cycle including contract management
- Include Social Value as a Core Element in Devolution Agreements, so devolved areas must include it in their commissioning and procurement
- Provide Clearer Statutory Guidance from central government
- Conduct an independent (but Government supported) biennial State of Social Value Audit
At the Social Value Portal, we have been leading the work to break down the key barriers that Lord Young identified in his 2015 review of the Social Value Act by:
- Raising awareness of the Act and how public and private sector organisations can become innovators in the field, through tools such as the Social Value Maturity Index, and working with the Social Value Taskforce
- Building and implementing a consistent methodology to both define Social Value in frameworks and procurement, as well as measure Social Value in a consistent way, through the National TOMs
- Developing mechanisms for creating a dialogue on Social Value delivery between the public, private and third sectors
The report Our Money, Our Future may be downloaded from the Social Enterprise UK website here: https://www.socialenterprise.org.uk/our-money-our-future