What Is the Social Value Model and How Does It Affect Procurement?

In recent years, the concept of social value has become increasingly important to public procurement processes in the UK. The Social Value Model, introduced by the government, serves as a framework to ensure that public spending not only delivers essential services but also generates additional benefits for society.

This guide explores the Social Value Model, its implications for procurement and how organisations can effectively integrate social value into their operations.

Understanding the Social Value Model

The Social Value Model is a framework developed by the UK government to guide public sector organisations in incorporating social value into their procurement activities. It provides a structured approach for evaluating how suppliers can contribute to broader societal goals beyond the primary objectives of a contract. The model outlines specific themes and policy outcomes that procuring entities should consider when awarding contracts.

According to the Crown Commercial Service, social value in procurement is about ensuring that public spending generates additional economic, social and environmental benefits beyond just the goods or services being procured.

Key Themes of the Social Value Model

The Social Value Model is structured around several key themes, each encompassing specific policy outcomes that suppliers are encouraged to address:

• COVID-19 Recovery: Supporting local communities to manage and recover from the impact of the pandemic.
• Tackling Economic Inequality: Creating new businesses, jobs and skills; increasing supply chain resilience and capacity.
• Fighting Climate Change: Delivering environmental benefits such as reducing carbon emissions and waste.
• Equal Opportunity: Reducing the disability employment gap and tackling workforce inequality.
• Wellbeing: Improving health and wellbeing; supporting the community.

These themes guide procurers in assessing how suppliers’ proposals can deliver social value in alignment with governmental priorities.

Implementation of the Social Value Model in Procurement

The implementation of the Social Value Model in procurement processes involves several critical steps:

1. Pre-Procurement Planning: Procuring organisations identify relevant social value outcomes that align with the contract’s objectives and the community’s needs.
2. Specification Development: Clear requirements are outlined, detailing how suppliers should contribute to the desired social value outcomes.
3. Evaluation Criteria: Bids are assessed not only on cost and quality but also on the proposed social value contributions, with a specified weighting assigned to social value in the evaluation process.
4. Contract Management: Ongoing monitoring ensures that the promised social value outcomes are delivered throughout the contract’s lifecycle.

This structured approach ensures that social value is embedded at every stage of the procurement process, from planning to delivery.

Impact of the Social Value Model on Suppliers

For suppliers, particularly small and medium-sized enterprises (SMEs) and social enterprises, the Social Value Model presents both opportunities and challenges:

• Competitive Advantage: Suppliers demonstrating a strong commitment to social value may gain a competitive edge in securing public contracts.
• Capacity Building: There may be a need for investment in new processes, training, or partnerships to effectively deliver the required social value outcomes.
• Measurement and Reporting: Suppliers must establish mechanisms to measure, report and verify their social value contributions, ensuring transparency and accountability.

By proactively addressing these areas, suppliers can improve their appeal to public sector clients and contribute positively to societal goals.

Challenges in Implementing the Social Value Model

While the Social Value Model offers a robust framework. So its implementation is not without challenges:

• Defining and Measuring Social Value: Quantifying social value can be complex, requiring the development of appropriate metrics and evaluation methods.
• Consistency Across Contracts: Ensuring a consistent approach to social value across different contracts and procuring entities can be challenging.
• Supplier Engagement: Encouraging a diverse range of suppliers to engage with the social value agenda necessitates effective communication and support mechanisms.

Addressing these challenges requires collaboration between procuring entities, suppliers, and stakeholders to develop best practices and share learning.

The Role of Verification in Social Value Delivery

To build trust and credibility in social value delivery, independent verification plays a crucial role. Organisations like Veriforce CHAS (The Contractors Health and Safety Assessment Scheme) offer assessments that help businesses validate their social sustainability practices. The CHAS Social Sustainability assessment, for instance, evaluates various aspects of an organisation’s operations, ensuring that they meet established social value criteria.

By engaging with such verification processes, suppliers can demonstrate their commitment to social value and boost their standing in public procurement processes.

Future Directions and Considerations

The emphasis on social value in procurement is expected to grow, with potential developments including:

• Policy Evolution: Ongoing updates to procurement policies may further integrate social value considerations, reflecting emerging societal priorities.
• Enhanced Measurement Tools: The development of more sophisticated tools and frameworks to measure and report on social value contributions.
• Increased Stakeholder Engagement: Greater collaboration between public bodies, suppliers and communities to co-create social value outcomes.

Organisations that stay on top of these developments and proactively adapt their strategies will be well-positioned to succeed in the evolving procurement landscape.

The Social Value Model represents a significant shift in public procurement, emphasising the importance of delivering broader societal benefits through public spending.

Understanding and effectively implementing social value considerations is now a critical component of securing public contracts for suppliers. By embracing the principles outlined in the model and engaging with verification processes, organisations can contribute to positive social change while achieving their business objectives.

Author: Doug Aris

LinkedIn: Doug Aris