Building social value through public sector procurement

What is social value? 

TPPL’s Phil Williams, procurement expert comments:

‘Social value’ shapes how limited resources are allocated to deliver a wider collective benefit to communities.  Public sector bodies are well placed to manage their social value and have the necessary reach to make a difference.  In addition, they have an obligation to consider social value in all threshold services tenders – this was implemented by the Public Services (Social Value) Act 2012. As a result, they must look beyond the price of each individual contract and consider how procured services improve the economic, social and environmental well-being of an area.

Themes of supportive measures could include:

  • Jobs and growth through skills and employment, including helping people into work/gain access to training and opportunities
  • Local, regional business resilience
  • Active, healthy and resilient local communities
  • Environmental sustainability, including helping customers and suppliers achieve carbon zero.

As the divide between rich and poor increases, and the effects of climate change heighten, the importance of embedding social value in a seamless way has never been more urgent. Organisations that invest to create social value make it a strategic priority, and working to influence the behaviour of others can have a huge impact.

How can you positively impact social value?

There are key steps you can take to positively impact social value from not only services, but all contracts.

  1. It is critical to consider social value from the outset, take a lead on defining what you envisage achieving and don’t just leave it to suppliers to guess what you want.
  2. Consider what the supplier has access to/ability to provide without inherently adding difficulty or excessive cost.
  3. Ensure the outputs are measured (can you explain how to measure them?)
  4. Use a recognised framework; for example, TOMs (https://socialvalueportal.com/national-toms/), to drive an overarching organisational approach and embed social value objectives into your corporate strategy

Who benefits from social value in building materials procurement?

Social value funds linked directly to value of purchases can be used to invest in variety of projects that benefit customers or the wider community. Below are some examples:

  • Funding improvements to local facilities;
  • PAT testing of recycled white goods;
  • Digital training programmes for digitally excluded tenants;
  • Funding/racking/collection of donations for food banks;
  • Funding installation of defibrillators in the community;
  • Training and apprenticeships are available and can be targeted directly at customers or sections of the local community to provide increased employment opportunities;
  • Volunteering time.

Is the value additional, or is it embedded into the service itself?

For building materials, there’s an opportunity for social value to be integrated into the service -including funds linked directly to the amount of expenditure such as apprenticeships, training/work placements. Additional value can be delivered through volunteering, employability skills and community projects; for example donation of materials or tools.

How can you support suppliers in achieving outcomes with the most value?

There are three key ways to provide strategic support:

  1. By being reasonable with expectations – this is linked to understanding what the supply-chain is in question (in this case building materials) has easy access to; for example:
    1. Building Materials & tools
    2. Staff/resources
    3. Facilities (e.g. branches and meeting rooms)
  1. Identifying your objectives/themes and any upcoming projects that they could support.
  2. Ensuring suitable ongoing contract management, to work with the supplier(s) and help ensure objectives are delivered.

Which communities benefit most?

  • The local communities living in (or near to) the housing stock managed by the registered provider:
    • Vulnerable tenants
    • Individuals with lower levels of employability
    • Wider communities who access local facilities which receive improvements/funding.

James Brennan, Managing Director at TPPL comments:

‘TPPL supports members procuring via our solutions to achieve desirable Social Value outcomes bespoke to their requirements. We understand objectives vary greatly for members, therefore we advise on how contracting authorities achieve realistic outcomes proportionate to the procurement project undertaken. Between 2019-2020 TPPL generated £74,000.00 for members via materials contracts, allowing them to strategically reach their financial objectives across the social value spectrum’.

Find out more about how TPPL can assist with social housing building materials procurement.