Guidance

Social Value Act: information and resources

Updated 3 May 2016

1. Introduction

The Public Services (Social Value) Act came into force on 31 January 2013. It requires people who commission public services to think about how they can also secure wider social, economic and environmental benefits.

Before they start the procurement process, commissioners should think about whether the services they are going to buy, or the way they are going to buy them, could secure these benefits for their area or stakeholders.

The Act is a tool to help commissioners get more value for money out of procurement. It also encourages commissioners to talk to their local provider market or community to design better services, often finding new and innovative solutions to difficult problems.

2. Guidance

Lord Young, the Prime Minister’s Adviser on Enterprise, conducted a review of the Act, which examined how the Act has been performing in its first 2 years. The report contains a number of useful case studies, practical guidance on how to apply the Act, and a framework and principles for measurement.

The Policy Procurement Note was produced when the Act came into force in January 2013.

We also conducted a one year on update on the Act.

3. Programme of Work

The government will support the effective implementation of the Social Value Act. Following Lord Young’s recommendations on how to improve the way the Act is implemented, we will undertake a full programme of work:

3.1 Social Value Awards

Through the Social Value Awards, we will aim to recognise and celebrate good practice in commissioning and providing social value.

Nominations have now closed. The shortlisted candidates, announced on 25 January 2016, are:

Social Value Leadership Award for an Organisation

  • Association of Greater Manchester Authorities (AGMA) Procurement Hub consists of 10 local councils in the Greater Manchester region who work together on issues which affect the whole region. AGMA worked with partners to rapidly develop their social value policy and framework, which had a clear strategic link to the Great Manchester Strategy. This included:

    • standard definition of social value
    • practical advice and suggestions on how social value outcomes can be incorporated into procurement approaches
    • an e-learning module to ensure the concept of social value is consistent for all commissioners
    • growing body of case studies
  • Halton borough council consistently considers social value in decisions and has implemented a social value policy, framework and charter. The council’s commitment to social value goes far beyond the requirements of the Social Value Act, and it is considered formally for every procurement opportunity above £1,000. The council aspires to include 1 social value outcome in every procurement. The social value outcomes form part of the evaluation and are built into the contract management. A local student from Riverside College, Halton also designed the Halton Social Value logo as part of the wider encouragement and promotion of social value across the borough.

  • Durham county council has invested in understanding their region’s priorities and how their own social value procurement can help to achieve these priorities. Their commitment to social value goes beyond the requirements of the Social Value Act to include goods and works, as well as services, and to formally consider social value in all procurement opportunities over £50,000.

  • Liverpool city council has set social value as a priority from mayoral level down. They have developed governance processes, including a Fair City Framework, that embed social value throughout the procurement and commissioning cycle from pre-procurement to contract management. A particular focus is capturing social value across the whole organisation, including frontline services, and working with its supply chain to help them understand how they can support the council’s social value objectives.

Social Value Leadership Award for an Individual

  • Laura Pechey works for the charity HAGA, based in Haringey, that works with and on behalf of people, families and communities affected by alcohol. Laura Pechey brought in specialist support to explore how to embed the Social Value Act locally. Laura worked with local public health and adult social care commissioners to think about how to design services differently to maximise social value. Laura subsequently used this social value learning to successfully bid for a contract. Haringey council have since used the bid as an example of how social value can be quantified and measured.

  • Anne Lythgoe, Strategic Manager at Salford city council has been involved with delivering, monitoring and teaching social value principles for over 15 years. In her current role she creates an accessible and meaningful framework to deliver the Social Value Act, promoting the social value agenda through the adoption of the Social Value ‘Charter’ as 1 of 3 priority areas for the city.

  • Dave Sweeney, Director of Transformation at NHS Halton Clinical Commissioning Group (CCG) and Halton borough council has been instrumental in the development of social value in Halton. He has led the CCG’s work on social value and worked to create a Social Value Charter and a Social Value Procurement Framework. The result is that social value is at the heart of the NHS and borough council vision, planning and contracting across a £250 million footprint. Social value training is now in place to ensure the legacy and sustainability aligns with the 5 year forward view.

Promoting and Mainstreaming the Social Value Act Award

  • HACT is the housing sector’s innovation agency which supports the housing sector to build the skills to better understand social value. It uses a rigorous methodology to evaluate wellbeing.

  • Kier Group is a property, residential, construction and services group working with a number of organisations to promote social value. It has worked alongside Business in the Community to develop a social value measurement tool which can be used to consistently track social value delivery within and outside the industry. Kier has also been involved in creating the Considerate Constructors Scheme Building Social Value assessment tool for construction projects.

  • Landmarc Support Services, through its partnership with the Defence Infrastructure Organisation (DIO), manages and operates the Ministry of Defence’s UK Defence training estate. Surrounded by remote and rural communities, with diverse stakeholders, Landmarc proactively shares the value generated from its operations for local good. This ranges from using local suppliers, employing local people and supporting tenant and community projects to protecting the vast natural capital of the estate. Landmarc has recognised the value that applying the right environmental, economic and social principles can bring, making it a true social value pioneer.

  • The Social Value Portal is a social enterprise dedicated to building the capacity of both the public sector and business to implement the Social Value Act. It does this through:

    • free services like the Listening Tree that provides easy access to social value policies and strategies across the whole of England
    • a pilot study with Lambeth council where they developed an online platform to deliver social value
    • free workshops that build capacity both in the public, private and voluntary sectors
  • The Wates Group construction services company is committed to creating employment and training through trading with at least 1 social enterprise on every live construction project. By 2020 it aspires to have invested over £20 million. In 2014, Wates contributed to the ‘Communities Count: The Four Steps to Unlocking Social Value’ which sets out 4 key steps to help the housing sector unlock social value and has developed a practical toolkit that provides step-by-step best practice guidance to achieve this.

Driving Value for Money Award

  • Gloucestershire county council embedded social value throughout the tender process when seeking a new IT services provider. It treated social value as a significant business requirement rather than a ‘nice to have’. As a result, the council now has a service focused on driving greater value for money, social value and delivery of its strategic plan. In just 1 year, its provider, Sopra Steria, has helped the council:

    • achieve greater environmental sustainability
    • run a Dragons’ Den-style entrepreneurship contest for local students
    • provide apprenticeships and work placements
    • start is rolling out a local digital inclusion project
  • Data Performance Consultancy (DPC) works with public authorities to develop social value frameworks. It has developed metrics that can be used across health and local authority procurement to standardise social value measurement and to provide best value for money. The portal it is developing supports commissioners to contract manage the social value elements of contracts, enabling them to see real time information and provide value feedback to suppliers.

  • Fusion21 is the national social enterprise that provides procurement and regeneration services. It has over 200 public sector members who use its services to achieve efficiencies and social value driven procurement. To date it has:

    • generated around £125 million in savings through the procurement process
    • created over 2,300 jobs
    • generated over £56 million in community impact

Award winners will be announced at an awards ceremony sponsored by KPMG, during the Social Value Summit, hosted by Interserve and Social Enterprise UK, on 11 February 2016.

3.2 Social Value Act: implementation and measurement project

This project seeks to address the 3 key barriers Lord Young identified that must be overcome for the Social Value Act to be used to it’s full potential. These are awareness and take-up, practical understanding and measurement.

The response was much larger than expected and following difficult deliberations, the Minister for Civil Society chose 8 projects to receive funding. View the list of successful projects. They undertook this work until March.

Eight case studies from providers ranging from adult social care providers to forums supporting voluntary organisations, have documented their experiences on how they applied social value in their projects.

3.3 Central government’s commitment

We will publish a paper, planned for summer 2016, giving examples of how central government has shown commitment to implementing the Social Value Act and what further actions we will take.

3.4 Social Value procurement training

We will be producing documents for procurers to use to understand the Social Value Act.

4. Further support

Social Enterprise UK’s Social Value Hub provides a range of free case studies, toolkits, guides, and other resources.

The Inspiring Impact Hub includes a range of free tools and resources to help organisations measure their impact, including a number of unit cost databases.

Our series of commercial masterclasses cover a range of essential topics for voluntary organisations tendering for public contracts.

The Mystery Shopper scheme provides a route for suppliers to raise concerns about public sector procurement practices, including instances where they believe that commissioners have not complied with the Social Value Act. It also proactively carries out spot checks on individual procurement exercises to check that the Act is being applied. You can contact the Mystery Shopper service by emailing MysteryShopper@ccs.gsi.gov.uk or by telephoning 0345 010 3503.

The Commissioning Academy is a development programme for senior commissioners from all parts of the public sector. It is ‘virtual’, as there is no fixed location and the programme is run at venues across the UK. The programme covers the Social Value Act and includes masterclasses, workshops, guest speakers, site visits and peer challenge. Find out how to apply to join the programme.

5. Case studies

A number of helpful case studies can be found in Lord Young’s review of the Social Value Act.

Two examples from the report are included below.

We will be updating our bank of case studies over the coming months. If you have a social value case study you would like to share, please send it to us: SocialValue@cabinetoffice.gov.uk.

5.1 Value for money: Circle Housing

Circle Housing’s repairs and maintenance service is on track to realise around £80 million worth of cost saving over 10 years, subject to market conditions and fluctuations. They have rationalised their contracts whilst mandating social objectives within their procurement model, for example, securing 1 apprenticeship for every £0.5 million worth of contract. This has led to social value being created through the supply chain and funded by the supplier, which would have otherwise been funded by Circle Housing.

Circle Housing also used monetary values or financial proxies from the HM Treasury Green Book to calculate their social return on investment (SROI).

For 1 of their 80 employment and skills programmes, they have calculated an SROI of £5.40 (£75,470 divided by £14,000 gives a ratio of 1 to 5.4):

  • input: £14,000 (£10,000 fund plus £4,000 staff costs)
  • output: £12,000 from Job Centre Plus to support programme; 80 people supported
  • outcome: 10 into employment including 3 NEETs, 22 put through accredited training, 13 into further education, 25 into volunteering/work placements, 30 increased confidence in their abilities
  • impact: £29,141 jobseekers allowance savings, £16,500 for young people who are not in employment, education or training (NEETs), £5,131 for NVQ level 1 accreditation, £12,698 reduced NHS cost for depression (identified at start)

5.2 Innovative provision: Lambeth Council

Lambeth Council had £20,000 to spend on youth offending services. Instead of taking the traditional approach of buying in a youth offending service, they decided to bring together young offenders to work with the council on a grant fund. The young people decided the outcomes for the grant, evaluated bids, and selected the winner – a project that would involve the whole community in a talent competition.