Social value, as from 1st January 2021, is an integral part of the tendering process. Public sector organisations inviting tenders for work worth over £180K are now obliged to ask potential suppliers about social value. Suppliers are now assessed and scored on the wider positive benefits they will bring to delivering a contract. This is done using the Social Value Model.
The crux of this is that public procurement can significantly drive positive social change.
In this blog we consider what the Social Value Model is, how it is used and what it means.
To provide some background, in September 2020 (note*4) the Cabinet office announced new measures, including a Social Value Model aimed at assessing and scoring suppliers on the wider positive benefits they will bring to delivering a contract. The Social Value Model is described in more depth below. This came into effect on 1st January 2021.
Welcoming the new rules, Cabinet Office Minister, Julia Lopez said:
“Government has tremendous buying power, spending £49bn each year on contracts for vital public services. Value to the taxpayer should lie at the heart of our procurement decisions.
Too often, however, ‘value’ has been narrowly defined by price without taking into account other important factors such as the number of local jobs or apprenticeships a contractor will provide, the care they show the environment in their business practices or the number of SMEs involved in their wider supply chain.
We want to see a greater variety of companies deliver government contracts, from every corner of our country - not just because that benefits local economies and communities but because it helps diversify our risk, create a more resilient supplier base and deliver some of our critical priorities.
If we can use government’s buying power to drive that broader value, the better our chances of levelling up our country and investing in our people as part of our COVID recovery.”
The changes mean that central government will now be required to go further than the Public Services (Social Value) Act 2012 to ensure that all major procurements explicitly evaluate social value, where appropriate, rather than ‘just consider it’.
Before this, public sector organisations were required to ‘merely consider’ the potential for suppliers to deliver services that enhance the area and people with whom they will be working.
Regarding the new changes, the Minister for Civil Society, Baroness Barran said:
“This hugely positive change will ensure taxpayers’ money supports levelling up across the country, encouraging businesses to give back to their communities and offering more opportunities for our dedicated charities, social enterprises and voluntary groups. This way we can ensure government contracts are helping to tackle economic inequality and support our recovery.”
The Social Value Model
(See note*2)
What is the Model?
There are three key aspects of social value:
economic (e.g. employment or apprenticeship/training opportunities),
social (e.g. activities that promote cohesive communities) and
environmental (e.g. efforts in reducing carbon emissions)
The Social Value Model sets out the government’s social value priorities for procurement. It includes a menu of social value options for commercial staff in in-scope organisations to review and select with their internal clients and any other stakeholders.
There are 5 themes and 8 policy outcomes which flow from this model, as follows:
Each theme has a number of Model Award Criteria (MAC). These are effective measures to deliver any/all of the components of the theme.
Each MAC has sub-criteria and details are provided on how that MAC can be measured and implemented. Also there are details of metrics that can be used to measure effectiveness. I don’t go into this in full here. Bear in mind, this is a summary document, summarising what Social Value is. It is not a detailed analysis of implementing the Social Value Model. For that see note2 and note3.
We can look at these MACs in a little more depth below.
Theme 1. COVID-19 recovery
Policy Outcome: Help local communities to manage and recover from the impact of COVID-19
MAC 1.1: Creation of employment, re-training and other return to work opportunities
for those left unemployed by COVID-19, particularly new opportunities in high growth
sectors.
MAC 1.2: Support for people and communities to manage and recover from the
impacts of COVID-19, including those worst affected or who are shielding.
MAC 1.3: Support for organisations and businesses to manage and recover from the
impacts of COVID-19, including where new ways of working are needed to deliver
services.
MAC 1.4: Support for the physical and mental health of people affected by COVID-19,
including reducing the demand on health and care services.
MAC 1.5: Improvements to workplace conditions that support the COVID-19 recovery
effort including effective social distancing, remote working, and sustainable travel
solutions.
Theme 2. Tackling economic inequality
Policy Outcome: Create new businesses, new jobs and new skills
MAC 2.1: Create opportunities for entrepreneurship and help new organisations to
grow, supporting economic growth and business creation.
MAC 2.2: Create employment and training opportunities particularly for those who
face barriers to employment and/or who are located in deprived areas, and for
people in industries with known skills shortages or in high growth sectors.
MAC 2.3: Support educational attainment relevant to the contract, including training
schemes that address skills gaps and result in recognised qualifications.
Policy Outcome: Increase supply chain resilience and capacity
MAC 3.1: Create a diverse supply chain to deliver the contract including new businesses and entrepreneurs, start-ups, SMEs, Voluntary Charity and Social Enterprises (VCSEs) and mutuals.
MAC 3.2: Support innovation and disruptive technologies throughout the supply chain to deliver lower cost and/or higher quality goods and services.
MAC 3.3: Support the development of scalable and future-proofed new methods to
modernise delivery and increase productivity.
MAC 3.4: Demonstrate collaboration throughout the supply chain, and a fair and
responsible approach to working with supply chain partners in delivery of the contract.
MAC 3.5: Demonstrate action to identify and manage cyber security risks in the
delivery of the contract including in the supply chain.
Theme 3. Fighting climate change
Policy Outcome: Effective stewardship of the environment
The government set out a 25 Year Environment Plan for steps to improving the environment within a generation with details of how it will work with communities and businesses to do this. (See note*6) This theme is aimed at supporting these 25-year goals.
According to this, by adopting our 25-year goals we will achieve:
1. Clean air
2. Clean and plentiful water
3. Thriving plants and wildlife
4. A reduced risk of harm from environmental hazards such as flooding and drought
5. Using resources from nature more sustainably and efficiently
6. Enhanced beauty, heritage and engagement with the natural environment
In addition, we will manage pressures on the environment by:
7. Mitigating and adapting to climate change
8. Minimising waste
9. Managing exposure to chemicals
10.Enhancing biosecurity
MAC 4.1 Deliver additional environmental benefits in the performance of the contract
including working towards net zero greenhouse gas emissions.
MAC 4.2 Influence staff, suppliers, customers and communities through the delivery
of the contract to support environmental protection and improvement.
Theme 4. Equal opportunity
Policy Outcome: Reduce the disability employment gap
This theme is intended to support the government’s strategy for the Future of Work, Health and Disability. It is aimed at
promoting a society where everyone is ambitious for disabled people and people with long-term health conditions, and where people understand and act positively upon the important relationship between health, work and disability.
Government is committed to increase the number of high quality applicants available, to create a workforce that reflects the diverse range of customers it serves and the community in which it is based, and to bring additional skills to business. As part of these commitments, government is determined to see one million more disabled people in work over the next ten years.
(See note*7)
MAC 5.1: Demonstrate action to increase the representation of disabled people in the
contract workforce.
MAC 5.2: Support disabled people in developing new skills relevant to the contract,
including through training schemes that result in recognised qualifications.
Policy Outcome: Tackle workforce inequality
This theme is aimed at supporting the Government’s commitment to tackling inequality and giving everyone across the country the opportunity to fulfil their potential. See more in The Good Work Plan note*8
In addition, it supports the Government's commitment to tackling modern slavery. See more in the Procurement Policy Notes note*9
MAC 6.1: Demonstrate action to identify and tackle inequality in employment, skills
and pay in the contract workforce.
MAC 6.2: Support in-work progression to help people, including those from
disadvantaged or minority groups, to move into higher paid work by developing new
skills relevant to the contract.
MAC 6.3 Demonstrate action to identify and manage the risks of modern slavery in the
delivery of the contract, including in the supply chain.
Theme 5. Wellbeing
Policy Outcome: Improve health and wellbeing
One thread of this is in support of the Government’s commitment to promoting wellbeing and mental health.
There are six standards in the Mental Health at Work commitment (See note*10). These are:
Prioritise mental health in the workplace by developing and delivering a systematic programme of activity
Proactively ensure work design and organisational culture drive positive mental health outcomes
Promote an open culture around mental health
Increase organisational confidence and capability
Provide mental health tools and support
Increase transparency and accountability through internal and external reporting
MAC 7.1: Demonstrate action to support health and wellbeing, including physical and
mental health, in the contract workforce.
MAC 7.2: Influence staff, suppliers, customers and communities through the delivery
of the contract to support health and wellbeing, including physical and mental health.
Policy Outcome: Improve community integration
This theme supports the Government’s Civil Society Strategy, in which it sets out how it wants all people to be able to thrive, connect with each other, and give back to their communities, whilst having a sense of control over their future and that of their community.
MAC 8.1: Demonstrate collaboration with users and communities in the co-design and
delivery of the contract to support strong integrated communities.
MAC 8.2: Influence staff, suppliers, customers and communities through the delivery
of the contract to support strong, integrated communities.
The UN SDGs
In 2015, all United Nations Member States adopted The 2030 Agenda for Sustainable Development. This provides a shared blueprint for peace and prosperity for people and the planet, now and into the future.
At its heart are the 17 Sustainable Development Goals (SDGs), which are an urgent call for action by all countries - developed and developing - in a global partnership. They recognize that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve our oceans and forests.
Each of the themes in the Social Value model tie in to various SDG goals
References and Notes
{I would normally hyperlink directly from the text to the relevant documents. However, in this case I am not. Versions will change, and the links will change. These are the documents current at the time of writing. I suggest, if relevant, Google the current documents and use those.}
This document is based on the Social Value Model V1.1 of 03 December 2020. Throughout that document is the advice to always use the most up-to-date version online.
https://www.gov.uk/government/publications/25-year-environment-plan
https://www.gov.uk/government/publications/improving-lives-the-future-of-work-health-and-disability
https://www.gov.uk/government/publications/good-work-plan/good-work-plan
If you need help with any bid writing, or Bid Management contact me.
Dale.Spence@GenesisGRC.co.uk / 0777 560 4378