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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Social value and value for money?

  1. 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 020 7551 7746 (Direct) Malcolm Williamson, Director of Enterprise Inspire2Enterprise CIC 01707 398029 (Direct) 4th February 2014
  2. 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. 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. 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. 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 • 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. 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. 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. 8. Further Information • BWB‟s “The Social Value Act Quick Guide” with Unity Trust Bank published by Pioneers Post • BWB‟s “Bold Commissioning & Procurement for Best and Social Value” workshops/ seminars in association with: University of Northampton; E3M member social enterprises; and I2E – • An example: “Knowsley Metropolitan Borough Council Procurement Strategy 2012-14” –
  9. 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. 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. 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. 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. 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. 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….?”
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