Embedding Social Value in Procurement: A Practical Guide

Social value is a vital concept in modern procurement. It shifts the focus beyond price and quality to consider the broader economic, social, and environmental impact of public spending. This article explores what social value is, why it’s essential, how to embed it effectively in procurement, and the challenges and opportunities it presents for organisations and suppliers alike.

What Is Social Value?

Social value refers to the wider benefits that procurement can deliver for communities, such as creating jobs, supporting local economies, promoting sustainability, and enhancing societal well-being. In the UK, this concept was enshrined in law through the?Public Services (Social Value) Act 2012, which requires public bodies to consider how procurement can deliver additional social benefits.

Why Is Social Value Important?

1. Community Impact:?Public spending accounts for billions of pounds annually. Embedding social value ensures that this spending supports local jobs, small businesses, and sustainability goals.

2. Sustainability:?Aligning procurement with social value supports net-zero targets and other environmental initiatives.

3. Equality:?It encourages diversity and inclusion by promoting opportunities for underrepresented groups.

How Can We Embed Social Value in Procurement?

1. Policy Alignment:?Ensure procurement policies align with organisational priorities for social value, such as net-zero, inclusion, or economic development.

2. Pre-Procurement Planning:?Engage with suppliers early to communicate social value goals.

3. Evaluation Criteria:?Include social value as a mandatory evaluation criterion in tenders, ensuring it carries meaningful weight (e.g., the UK government’s recommendation of a minimum of 10%).

4. Supplier Support:?Offer guidance and workshops to help suppliers, especially SMEs, understand and deliver social value.

5. Contract Management:?Monitor and enforce social value commitments through measurable KPIs.

Who Is Mandated to Include Social Value in Their Evaluations?

Under?PPN 06/20, central government departments, executive agencies, and non-departmental public bodies are required to include a minimum weighting of 10% on social value in their procurement evaluations. Local authorities and other public sector organisations are strongly encouraged to do the same. This weighting ensures that social value is given meaningful consideration in procurement decisions but allows flexibility for contracting authorities to increase the percentage based on the nature of the procurement.

The requirement to apply social value in procurement under PPN 06/20 does not apply to all procurements. Instead, it is typically applied to procurements above the?regulated procurement thresholds, as defined in the UK Public Contracts Regulations. Procurements below these thresholds are not explicitly mandated to include social value considerations but are encouraged to do so when proportionate and relevant to the procurement objectives.

Challenges for Suppliers

1. Capacity:?SMEs may lack resources or expertise to develop and demonstrate social value strategies.

2. Measurement:?Suppliers often struggle to quantify and report on social value outcomes.

3. Costs:?Meeting social value requirements may increase initial project costs, even if they offer long-term benefits.

Challenges for SMEs

? Resource Constraints:?SMEs may find it harder to compete with larger organisations that have dedicated teams for social value.

? Complexity:?Navigating multiple frameworks and reporting requirements can be daunting.

? Awareness:?SMEs may be unaware of social value requirements or how to incorporate them into bids.

Measuring and Reporting Impact

To effectively measure and report on social value, procurement teams can use tools like:

? The National TOMs Framework?(Themes, Outcomes, Measures)

? Social Value Portal?for consistent reporting

? Bespoke frameworks aligned with organisational goals

Reports should focus on tangible outcomes, such as jobs created, carbon emissions reduced, or volunteer hours delivered.

Where to Go for Help

? Social Value UK:?Provides resources, training, and networking opportunities.

? Social Value Portal:?Offers tools and services to track and report on social value.

? Chartered Institute of Procurement & Supply (CIPS):?Offers training and guidance on integrating social value into procurement.

? Local Networks:?Many councils have social value officers or networks to assist suppliers and buyers.

Training for Procurement Teams

Procurement professionals can access social value training through organisations like:

? CIPS

? Social Value UK

? Local Government Association (LGA)

Training should cover:

? Policy frameworks

? Best practices in evaluating social value

? Monitoring and reporting techniques

Final Thoughts

Social value is no longer an optional consideration—it is a critical component of effective procurement. While there are challenges, particularly for SMEs, the benefits of embedding social value far outweigh the obstacles. By fostering collaboration between buyers and suppliers and leveraging available resources and training, procurement teams can drive meaningful change in communities while achieving organisational goals.

What are your experiences with social value in procurement? What challenges or opportunities have you encountered? Share your thoughts below!