Over the past 25 years working in sustainability, I have seen firsthand the power social value can create. From considering community space in design to empowering women in the workforce, the impact of positive intervention can drive lasting change. But is the current approach focused on delivering meaningful social impact to support communities and improve people’s lives, or are we left chasing figures to achieve the highest proxy value score?
Where we are.
In the UK, the Public Services (Social Value) Act 2012, set the scene for one of the biggest changes in public sector procurement. Public bodies were required to ‘consider’ how they could help reduce societal inequalities, support access to employment, protect the environment, and improve the wellbeing of individuals and communities.
However, it was the new government procurement policy in 2020 that shifted the emphasis, requiring businesses to ‘explicitly evaluate’ the impact of their social value initiatives. This change ensured that businesses must act on their considerations, demonstrated by the fact we now see social value accounting for as much as 20-30% of the evaluation in some tenders.
Unfortunately, what has followed is a worrying trend seen across many sustainability themes, such as carbon and net zero.
It seems that there is a new buzz word, framework or tool launched every day. This leads to complication and confusion, almost forgetting the purpose of social value. It is not just about delivering the highest proxy monetised figure – initiatives should be focused on meaningful local impact that affects change.
Chasing the figures: ensuring we focus our effort on meaningful impact rather than a proxy financial figure.
Social value frameworks and reporting tools have all been designed to set a methodology, although the approaches vary In principle they measure social value in terms of metrics associated with activity inputs, outputs and outcomes, with some including the ‘monetisation’ of social value.
Monetised values are financial proxies applied to social impacts to calculate the relative importance of change to those impacted by the intervention. The most robust tools have been compiled through methods that align with the Treasury Green Book and/or Organization for Economic Co-Operation and Development (OECD) guidance.
In theory it shouldn’t matter what framework or tool you use. If you stick to the simple guiding principles, initiatives should provide a wide range of place based social value interventions and local benefits.
Guiding principles:
- Understand the outcome you want: not just an input. What are you actually trying to achieve?
- Involve those you are trying to positively impact: make it personal. Qualitative over quantitative.
However, we are in danger of social value in the UK becoming too commercialised. As evidenced by the number of frameworks and tools that have emerged – many of which have substantial subscription charges which increase the burden on organisations.
Social value: The difference between winning and losing.
With the social value evaluation weighting as high as 30% in some tenders, a bidder’s social value proposals can be the difference between winning or losing a contract. Particularly with an increased focus on the monetised quantification, where bidders ‘proxy financial’ social value proposals are weighted up against each other.
It could be argued that this approach puts too much emphasis on proxy monetised evaluation. If organisations chase the highest score to win a contract, the initiatives can become too narrow in scope, forgetting the guiding principles discussed earlier.
Whilst it is a welcome and significant step change that social value is getting recognition alongside traditional criteria such as technical quality and price, could the current approach be at the expense of meaningful initiatives?
Where next?
At the core of the issue is the lack of a standard consistent approach in the social value system, including its language, measurement and evaluation.
Currently the system seems driven by the multitude of frameworks and associated commercialised measurement tools, some of which seem to have a monopoly in the public sector tender evaluation process.
Ideally, we need a more consistent, collaborative approach to standardise the common goal of delivering meaningful social value, to improve people’s lives and support thriving communities.
In June 2023 Social Enterprise UK, in partnership with leading social value practitioners, launched the Social Value 2032 Program and Roadmap, with the aim ‘’to create a consistent legal and regulatory framework; to build a social value system with a thorough understanding of purpose, language and leadership; to develop common standards and principles to measure social value; and to strengthen the supply chains which will robustly deliver these objectives’’.
Maybe this standardisation and a plan to transform the system is what we need? Unfortunately, a year on progress with the above programme and roadmap is still not clear.
What is clear is that social value will, rightly, play a major role in public sector projects going forward. The question is, how should the approach develop to benefit the communities these projects serve? I’m intrigued to find out.
Watch this space…
In early 2023 we established an Egis UK Social Value Working Group to focus on the 10 key themes embedded in our UK Sustainability Strategy and our core baseline social value goals and targets. In the next article in this series, I will explore our approach to social value and how we maximise the positive impact we make to people and places throughout the UK. Watch this space!
