You asked us: “what is social value in procurement” and we answered
What is social value in procurement? It’s a question asked often and, unfortunately, not always fully answered. In this blog, we’ll answer your question and give examples of how you can categorise social value.
What is social value in procurement?
In 2012, the government brought out the ‘Social Value and Public Services’ act.
It led to a shift in companies and their desire for sustainability. Suddenly, there was an aspect of the procurement process focused on the impact a company had on its community. On top of this, a model was produced that outlined specific values that the government wanted companies to strive for. Since then, they’ve updated the model, but the values remain mostly the same.
The power of tailoring your model, outcomes and criteria
There’s 5 points of non-negotiable value in the model,
- Covid-19 recovery
- Wellbeing
- Equal opportunity
- Tackling economic inequality
- Fighting climate change.
However, this doesn’t mean that you can’t add aspects or additional values that are relevant to your sector. In fact, adding values you consider important to your company can be beneficial for selecting the right supplier. The government allows this, stating that it:
“Defined its priority social value outcomes to provide focus, deliver a coherent message and drive synergies. Where an in-scope organisation has an opportunity to contribute to the delivery of specific objectives related to its own strategy and operations, additional policy outcomes may be added.”
The government states that you shouldn’t detract from the overall message for social values. Make sure that whatever you’re adding falls in line with the rest of your values.
Why is the social value model in place?
Ultimately, the social value model helps the government ensure that suppliers and buyers are adhering to standards. It holds suppliers accountable to producing positive social change. Indeed, it was increased to a 10% weighting in the procurement criteria. Everyday, procurement is happening that affects people’s lives. It’s only right that buyers ensure that this effect is positive. It indirectly leads to smarter spending to help resolve economic and environmental issues in the community.
The themes of social value
When you’re tackling social value in the procurement process, you need to consider five points. We’ll go through them and what they mean for you and the suppliers.
1. Helping local communities to manage and recover from the impact of COVID 19
So, this focuses on the impact of the pandemic on local communities.
- In what way are the suppliers dedicating resources to see change in the community, in the wake of COVID 19?
- Do they have an agreement set up with a local charity?
If the supplier can provide evidence of this, it’ll be beneficial for you in your selection process.
2. Tackling economic inequality
- Create new businesses, new jobs and new skills. How are the suppliers impacting employment rates? What are they doing to educate their employees, and provide new skills?
3. Fighting climate change
- Effective stewardship of the environment. What waste policies have they got in place?
4. Equal opportunity
- Reduce the disability employment gap. The supplier’s recruitment process would help in discovering whether they’re working towards this.
- Tackle workforce inequality. Is the supplier taking accountability for diversity and equality through their policies?
5. Wellbeing
- Improve health and wellbeing. Is counselling or talking therapy being offered for those who need it?
How do I know that suppliers are achieving social value?
The government states that:
“…organisations must ensure that any benefit identified as social value in tenders or contracts…is over and above the core deliverable/s of the tender or the contract.”
This essentially means that a supplier can’t link an agreed feature of their service to social value. They need to go above and beyond their service features to help meet social values. To prove that they’re meeting social values, they could:
- Deliver training to employees. This especially applies to policies such as equal opportunities and discrimination policies. This ensures that everyone within the company is aware and actively contributing towards policies.
- Produce monitoring systems. Monitoring the disposal and production of goods can go a long way to proving environmental responsibility.
In 2020, the government published an article stating that suppliers need to provide evidence of them upholding social values. So, this aspect of bidding is crucial and shouldn’t be overlooked. .
Summary
So here we are, at the end of the blog.
We’re sure that by now you know the answer to the question, “What is social value in procurement.”
Now you have the knowledge you need to include the social value model into your procurement process. For those who need it, here’s a short recap on what we’ve covered.
- What is social value in procurement? – The social value model, its creation by the government and how its influenced procurement.
- The power in tailoring your model, outcomes, and criteria- How you can add to the social value model to improve your selection process.
- Why is the social model value in place? – The social value model and its importance to the procurement process.
- The themes of social value:
- Covid 19 recovery
- Wellbeing
- Equal opportunity
- Tackling economic inequality
- Fighting climate change.
How can Hudson Procure help you?
Our team at Hudson Procure has nearly 20 years of experience, and we offer 4 services to help your business.
Procure Consult
We provide project-based tender support and management in addition to offering any required procurement support on an ad-hoc basis. The Procure Consult service includes mentoring, coaching and general advice. Ultimately, we have the capability and experience to support any operational or strategic procurement requirement.
Procure Health Check
Procure Health Check is for companies that have some knowledge of procurement but need that bit of assistance. The service includes on-site interviews with stakeholders to understand current procurement processes, skills and understanding. Also included is a review of procurement systems, infrastructure and opportunities for development.
Procure Analyse
This service provides a high-level vendor-led analysis of an organisation’s spending activity. This helps us to understand current purchasing behaviour and areas where procurement activity can be focused to deliver greater value. Procure Analyse helps generate a structured, forward plan for procurement activity and improving purchasing operations.
Procure Outsourcing
Procure Outsourcing focuses on providing procurement solutions on an outsourced basis. This would mean that the procurement services can be tailored to your needs. This could mean:
- Supporting existing procurement resources as an extension of a team
- Multiple tender projects delivered as a package
- Full procurement function for an organisation.
For more information or for a free consultation, please get in touch.
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