Social value has been a legal requirement for any procurement exercise since 2012, but it remains an often vaguely understood term.
Despite a Government review in 2015 which recommended that “[the] measurement of social value needs to be developed,” there is still little specific guidance as to what measures organisations need to implement to fulfil this requirement. However, this leaves organisations with the flexibility to define ‘social value’ in a way that is most fitting to their industry and their way of working.
In any case, social value is only set to become more important, since both the Government and service users are increasingly aware of, and concerned by, issues such as sustainability and workers’ rights.
Learn more about social value and procurement below.
What is social value?
Social value may mean a commitment to environmental issues in procurement, for example ensuring sustainable or low-carbon practices are prioritised. But social value can also encompass elements that are ‘closer to home’ for businesses.
Companies treating their employees well is a type of ‘social value’. Paying the living wage to all workers, for example, contributes both to employee wellbeing and the local economy.
Malcolm Harrison, CEO at the Chartered Institute of Procurement & Supply, has previously emphasised that it is a misconception to think that social value is only important in local government procurement. Social value has become increasingly important for central government, national governments around the world, and the private sector too.
Social value needs to be considered in all procurement exercises, not only large-scale procurements with central government. Mr Harrison stresses that, for social value, “It all starts in terms of leadership”.
Social Value starts at the top
Social value needs to be written into every step of the procurement exercise. In fact, it is increasingly important for ethical practices to be thought about at every step of the supply chain.
Social value should not be an additional ‘benefit’ of procurement projects, but something integral to the very nature of the projects undertaken. Social value needs to be embedded in projects themselves, the public sector should invest in communities rather than projects, and ask what community is served by construction projects.
Ben Carpenter of Social Value UK and Social Value International suggests that it is vital to have board-level buy-in to allow for effective social value. It cannot simply be something ‘added on’ as a final consideration in a procurement exercise; to be effective and meaningful, social value needs to be central to the entire organisation’s way of doing procurement.
Understanding social value
Social value is only set to become more important to buyers, businesses and end users increasingly concerned with issues such as sustainability, fair trade and equal pay.
There is a clear appetite for organisations to understand how to integrate social value into their procurement strategy. At Procurex National 2019, the ‘Get Strategic with Social Value’ session, led by Ben Carpenter, was among the best-attended sessions of the day.
Social Value UK and Social Value International are leading a global network of practitioners and help organisations across the world develop principles and standards for social value accounting.
Mr Carpenter says that organisations must think about how their activities impact on people’s lives, He has stressed that organisations must measure and manage this effectively. This year Ben will be speaking online at Procurex National Engage on 9 September, with a presentation that aims to helps businesses grow through embedding international standards for social value.
Procurex National Engage
This year’s Social Value Academy Zone at Procurex National Engage will provide attendees with a unique opportunity to participate in a range of interactive training sessions and workshops, showcasing Social Value initiatives and best practice within local government procurement.
It is important for Delta to be the official eSourcing partner for this event as strategic and collaborative sourcing plays a critical role in public sector procurement.
The latest version of the Delta solution helps public and private sourcing organisations maximise their operational efficiency, contract management control and legislative compliance.
Tickets for Procurex National Engage are complimentary for public sector delegates.