Social value and value for money?
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Social value and value for money?

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Social value and value for money?
Julian Blake, Partner, Bates Wells Braithwaite
Malcolm Williamson, Head of Enterprise Support Services, Inspire2Enterprise

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  • 1. Strategic Sourcing: new approaches to deliver success Social Value & Value For Money Julian Blake, Head Charity & Social Enterprise and Education Group Bates Wells Braithwaite London LLP J.blake@bwbllp.com 020 7551 7746 (Direct) www.bwbllp.com Malcolm Williamson, Director of Enterprise Inspire2Enterprise CIC malcolmw@inspire2enterprise.org 01707 398029 (Direct) www.inspire2enterprise.org 4th February 2014
  • 2. Status of Social Value in commissioning • BWB - charity/social enterprise specialists; universities - public authorities (for procurement)/charitable social enterprises. • New emphasis on SV: UK Public Services (Social Value) Act 2012; EU Public Procurement Directive 2014, to be implemented in UK in 2014 • But SV already (underused) within UK Best Value regime and current Public Procurement Regulations • Public authorities may commission on the basis of price; but appropriately only for undifferentiated goods • May commission for optimum balance of price, quality and SV “most economically advantageous tender” • Must consider (under the 2012 Act); how a procurement “might improve economic, social and environmental well-being” [of relevant area]
  • 3. Potential meaning of Social Value • Dismissed as meaningless; not subject to straightforward measurement (like price/ quality); meaning may be recognised • Added social deliverables may be provided within service; see EU 2010 publication “Buying Social: A Guide to Taking Account of Social Considerations in Public Procurement” e.g. employment opportunities; social inclusion; equal accessibility; ethical trade; environmental best practice. • Purpose driven (efficient/cost-effective) suppliers may deliver further benefit e.g. by hypothecating retained profit to similar purposes, rather than to shareholder distribution; • Such suppliers may offer open book/shared profit arrangements, rather than seek to maximise own profit.
  • 4. • Commissioners may compile lists of SV objectives; consider the potential each procurement has in relation to each objective; request SV in specifications; invite creative SV offers • Longer term cost saving may be factored into purchasing, with payments linked to impact results; or the value of impacts (including to other public services), may be given weight.
  • 5. Practical meaning of Social Value • Promotion of SV is stimulus to smart thinking by commissioners/suppliers and proactive use of procurement; in environment where process can tend to obscure purpose. • Direct application to public services (e.g. education delivery), where public benefit and SV are central; also applicable to general service procurement. • Linked to impact measurement/assessment methodologies; considered in - Measuring Social Impact in Social Enterprise: The state of thought and practice in the UK” – Baker Tilly/CAN Invest/Big Society Capital 27/2/13, published by E3M www.socialbusinessint.com • Similar to approaches to: programme impact assessment; social investment; payment by results contracts; and social impact bonds, as promoted by Government. • EU Social Business Initiative promotes SV (including through procurement reform) to reinvigorate social economy; similar ideas part of Government‟s “Big Society” ideas.
  • 6. Application to Universities • A university is public benefit organisation with procurement power that may leverage SV benefits. • This may extend to collaboration, particularly as community organisation, with SV delivery to other educational institutions and wider public benefit. • SV meaningful with application/planning/consultation; what does the university and/or its students and/or its community need? how may applying SV assist in meeting such need? • Examples: employment opportunities for students; research opportunities; collaborative linkage to university-based enterprises/social enterprises; collaborative profit share; sustainability in university estate.
  • 7. Application to Universities continued • SV opens perspective on: social enterprise; benefits that can be delivered by social enterprises (as universities are); and opportunities/benefits from alignment of public benefit purposes (see MW’s following comments on SE). • Application to SV can also require more of private sector suppliers by obliging them to compete on SV as well as price and quality.
  • 8. Further Information • BWB‟s “The Social Value Act Quick Guide” with Unity Trust Bank published by Pioneers Post www.publications@pioneerspost.com • BWB‟s “Bold Commissioning & Procurement for Best and Social Value” workshops/ seminars in association with: University of Northampton; E3M member social enterprises; and I2E – J.Blake@bwbllp.com • An example: “Knowsley Metropolitan Borough Council Procurement Strategy 2012-14” – www.knowsley.gov.uk/pdf/procurement-strategy-2012-2014.pdf
  • 9. The UK Social Enterprise Sector What is a Social Enterprise?  A business that trades for a social and/or environmental purpose  Has a clear „social mission‟ – exists to make a social difference  Aims to generate income through trading, not via grants/donations  Reinvests its profits to support the continuing social mission  Creates a social impact (and social value) by way of its activities  Operates democratically, is accountable and transparent
  • 10. The UK Social Enterprise Sector Key Statistics*:  68,000 social enterprises in UK employing c800,000 people  Sector contributes c£24bn to the UK economy  38% work in 20% of the most deprived UK communities (12% SMEs)  56% developed a new product/service (43% SMEs)  82% reinvest profits back into the communities where they earned  Procurement policies cited as greatest barrier to sustainability *Social Enterprise UK: State of Social Enterprise Survey 2013
  • 11. Social Value & Value For Money Is Social Enterprise the answer?  A supplier channel that demonstrably “makes a difference”  Contract delivery value with equal focus on social impact and benefit  Creates training/employment for the excluded/disadvantaged/NEETs  The challenges of contract timescales, delivery complexity and scale  Part of a broader supply chain collaborating with private contractors  Supports Government strategy (SV Act, public sector “spin-outs”)
  • 12. Social Value & Value For Money A collaborative procurement process:  Supporting procurers to embed social value creation into contracts  Establishing contract social impact outcome and value criteria  Identifying potential SEs/consortia suppliers for specific contracts  Working with SEs throughout UK & Ireland to get „fit to tender/deliver‟  Supporting SEs in bid proposals that meet contract needs/add value  Reporting measurement of social impact outcomes and values
  • 13. Social Value & Value For Money Example: The University of Northampton Innovation Centre  Working with the procurement team to scope contract tender  Guidance/support to all contract bidders in embedding social value  Working with successful contractor to maximise social impact/value  Researching SE clients /market to identify potential supply chain  Supporting the SE bid/proposal process and impact outcome values  Identifying student experience/employability opportunities
  • 14. Social Value & Value For Money Social innovation is the answer…  Social enterprise is just one way of delivering social innovation  New solutions that meet a social need (e.g. reduce re-offending) Social innovation  Opportunities for LEP EU funds (match): 20% social inclusion/impact  Also student involvement, high impact research and PR  Key question: “how can we do „good stuff‟ when we….?”