Let's Talk Social Value: Tackling Economic Inequality

Tackling Economic Inequality was our theme for the “Let’s Talk Social Value” discussion on 19th June. We asked you to come along and share:

·???????How often you see this theme as the chosen Social Value topic in tenders.

·???????An example of a social value question on this theme.

·???????Your top tip for addressing the theme in a social value question.

We tuned in by looking at the UK Government Social Value model, which covers two Policy Outcomes under this theme. First, “Creating new businesses, new jobs and new skills.” We noted that the three Model Award Criteria (MACs) align well with the Policy Outcome, although there is overlap between the MACs and MAC sub-criteria. Second, ?“Increasing supply chain resilience and capacity” has five MACs and many MAC sub-criteria collectively covering aspects of innovation, capacity, capability and security. Other models include variations on these themes and associated measures.

One challenge raised was the difficulty of getting large suppliers to make future commitments, especially in a short time. Hence, the responses often fall back on past and current narratives, such as apprenticeships. Our advice is to always devote at least 80% of the response to future commitment and only 20% to past performance as evidence. It’s also important to note that commitments need to be contract-specific and not routine activity. For example, apprentices would need to be employed for the contract or have time dedicated to the contract, not simply be company apprentices. ?

Another challenge for national companies is to establish local social value especially when they are pricing keenly based on economies of scale. One observation from the procurement perspective was that buyers are keen for large companies to share work with SMEs and VCSEs, especially local ones. Having a robust, established supply chain strategy will help companies be prepared to answer questions on this theme. This point links to the theme from the 2023 Social Value Conference of ?‘radical collaboration’ – organisations working together to make a greater social value impact.

We noted that companies that rely heavily on contractors may struggle with the training aspect of the theme, but will be better equipped to handle the business and supply chain elements. Conversely, companies that don’t use a supply chain will struggle to respond to the other elements.

Another challenge raised was the lack of context given in tenders for the choice of theme. We have been assured by the Cabinet Office that commercial officers are trained to include background and context; we are feeding back that we don’t always get this. Whether you receive any guidance or not, we always advise you to research the buyer organisation and their position on the chosen theme(s). For this theme, knowledge of local demographics is helpful. This will help you to demonstrate interest and attention to detail, as well as inform thoughtful and targeted commitments.

One observation about establishing partnerships and doing research is that these things take time and assume consistency of location. When selling and delivering nationally or across many regions, it’s not possible to be ‘tender-ready’ for all locations and the short response times restrict what can be achieved.

Not everyone had received questions on the theme but had been expected to respond to non-scored due diligence questions on supply chains. We pondered if this was because the theme wasn’t relevant to their industry, but others had received the question even when the relevance was tenuous. This may suggest that buyers aren’t putting enough thought into the choice of theme and question-setting – another common refrain. ??

In the housing sector, social value questions are routine; often well-targeted and linked to the local council strategy. The TOMs are becoming more regular and the outcomes tend to include aspects of this theme as well as equal opportunity and wellbeing. Some tenders are specific about the outcomes, for example providing hardware for disadvantaged children and IT training for children, young people and older residents. This was a good example of the outcome not being directly related to the subject of the contract – a point always worth remembering. ?

The idea of a ‘social value supermarket’ was suggested – effectively building a library of social value options that a company is prepared to offer. Keeping a record of buyer requests and commitments offered helps to build choice, but be careful not to just recycle the same things every time – always check for new ideas and the relevance of established approaches.

It wasn’t a surprise to find construction tenders are more targeted in the outcomes they are looking for and this theme turns up often in relation to local employment and supply chains. However, there was an example of where this can be poorly thought through by the buyer – asking for a new apprentice to be employed on a six-week project!

The thorny issue of qualitative and quantitative evaluation came up again. In local authority tenders, and specifically in construction tenders, there is a higher emphasis on quantitative evaluation and comparative scoring – the supplier offering the highest social value number gets the highest score.?In central government, the focus is on qualitative evaluation and marking each response individually on its own merits. In qualitative situations, the proxy values for measures relating to this theme are often generous, for example, jobs and apprenticeships. In a qualitative situation, we have seen examples of higher scores being awarded to bids hitting more measures or MAC sub-criteria.

That’s about it for this time. We’ll definitely be running with the subject of measurement models and tools next time – 24th July – make a date in the diary – details to follow.

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