Social value: from procurement to co-production


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With the Public Services (Social Value) Act about to become law in England, why are public services taking so long to factor social value into service design? This presentation looks at the policy context and some of the pitfalls.

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Social value: from procurement to co-production

  1. 1. Social value from the startIs anything stopping us procuring better services?
  2. 2. The spirit of the Act
  3. 3. Social value asks the question: If £1 is spent on the delivery ofservices, can that same £1 be used to also produce a wider benefit to the community?
  4. 4. The regulatory regime is not as inflexible from acommercial perspective as is commonly made out...More often that not, restrictions arise because thosewho interpret the rules in central government adopt an overly restrictive approach... (Evidence to all party parliamentary group on outsourcing)
  5. 5. UK policy contextHow social value is becomingpart of the conversation acrossgovernment
  6. 6. 2010 NAO and Audit Commission reporton collaborative procurement Potential: Value of procurement spend was £220bn in 2008/09 2,500 OJEU exercises could have been avoided by using Waste: framework agreements The public sector procurement landscape is Muddle: fragmented, with no overall governance...
  7. 7. 2010 Modernising Commissioning greenpaper New roles for social enterprises, charities and public Change: service mutualsAspiration: Intelligent savings, more responsive services The expenditure of public money does not alwaysChallenge: deliver optimum value...
  8. 8. In "Our Programme for Government" the coalition government made a commitment to support thecreation and expansion of mutuals, co-operatives,charities and social enterprises, and enable these groups to have much greater involvement in the running of public services. (Modernising Commissioning green paper)
  9. 9. 2011 Localism Act General power of competence allows local authorities Power: to do anything that is within the power of an ordinary citizen Community budgets should enable new, localisedDevolution: approaches to commissioning New community rights include the right to bid to run Rights: public services - an opportunity to add social value?
  10. 10. 2011 Treasury Green Book updated Annex 2 describes ways of valuing non-market goods, Tools: including time and environmental benefits Material costs and benefits that cannot be valued in Benefits: monetary terms should clearly be taken into account... 2012 guidance on accounting for environmental Holistic: impacts introduces concept of total economic value
  11. 11. The full value of goods such as health, educational success, family and community stability, and environmental assets cannot simply be inferredfrom market prices, but we should not neglect such important social impacts in policy making. (HM Treasury Green Book, annex 2)
  12. 12. 2011 Open Public Services white paper Categorises services as individual, neighbourhood orTaxonomy: commissioned services White Paper sets out five guiding principles: choice,Principles: decentralisation, diversity, fairness, accountability Although it claims funding will be targeted at the most Caveat: disadvantaged, cost savings and productivity are the overriding agendas
  13. 13. 2011 Best Value statutory guidance Councils should consider overall value – includingSocial value: social value – when considering service provision. Previous guidance is being scrapped, including Creating strong, safe and prosperous communities, Scrapped: duty to involve and duty to prepare a sustainable communities strategy Summarised as economy, efficiency and effectiveness - Duties: but social value and consultation are central
  14. 14. 2012 Public Services (Social Value) ActImminent: Act becomes law in January 2013 Covers English organisations (and some in Wales) but Limits: limited to services, not goods or works Requires commissioners to consider social value when Duties: specifying or tendering services
  15. 15. Conflicting signals
  16. 16. Do commissioners have the capacity? A lack of expertise is already harming the sectorsUnskilled? ability to manage contracts (All party parliamentary group on outsourcing) Many procurement staff are relatively junior, and moreUnfamiliar? familiar with accounting than with service design Commissioners don’t always have the skills - or the freedom - to work with VCS organisations to explore, Afraid? identify needs and shape the market. They can be scared of giving out the wrong messages. (Locality)
  17. 17. Do commissioners have the will? 2010: 57% of bassac members said commissioning wasLow priority: very or fairly ineffective Unfortunately most statutory duties are reactive,Firefighting: expensive, short-term and do not allow individual or community influence. (Locality) High profile legal challenges such as Virgin West CoastsRisk averse: against the Department for Transport may militate against innovation
  18. 18. Has social value been over-hyped? There is no overriding legal duty that forcesNot magic: commissioners to specify social value outcomes in tenders if they dont want to Social enterprises and voluntary organisations will still be disadvantaged compared with bigger and betterNot equal: resourced providers, who may be able to game the system This new legislation, like any other, will not solve anything without a culture change that comes fromKey issue: both commissioners and providers (Local Government Information Unit)
  19. 19. Making it happen
  20. 20. Where theres a will, theres a way Five local development trusts have worked together toDoncaster: develop a common offer and approach to service providers City council is looking to include measures of socialLiverpool: value into procurement, including gap between providers highest and lowest earners Northern Ireland Housing Executive is considering N Ireland: reorganising its functions to enable it to contract with social enterprises
  21. 21. Advice for commissioners from SocialEnterprise UK Ask yourself what social value means to you, and to the Think: community you serve Develop a policy for commissioning for social value, and Plan: work out how this can be translated into tenders Assign weightings to reflect social value priorities, and Measure: monitor performance accordingly
  22. 22. Advice for providers from SocialEnterprise UK Ask yourself what social value you offer, and make sure Think: service commissioners know about it Put your own methods of measuring social value in Measure: place so you can demonstrate what you offer Make sure you also offer value for money and can meet Check: commissioners other essential requirements
  23. 23. From contracting to co-production Community organisations working directly with service Co-design: commissioners to design and develop services that involve their communities and meet their needs Find something that shows they can save money and Mutuality: they’re going to queue up. That’s what it’s all about at the moment. - Routeways, Plymouth Lambeths co-operative council model will involveInvolvement: citizens in drawing up service specifications
  24. 24. Co-production means delivering public services in anequal and reciprocal relationship between professionals, people using services, their families and their neighbours. Where activities are co-produced in this way, both services and neighbourhoods become far more effective agents of change (New Economics Foundation/ NESTA)
  25. 25. Three key questions to ask: Are service design, procurement processes and localCoordinated: needs aligned? Who holds the purse strings and what are their Control: priorities?Commission: Who is involved in specifying the service and why?
  26. 26. Help and advice!A few organisations that canhelp you with the detail...
  27. 27. Information and expertise New economics foundation - important thinking on service Nef design and co-production - Association of Public Service Excellence - APSE CLES Centre for Local Economic Strategies - Social Trade association for social enterprises:Enterprise UK Represents development trusts and community anchor Locality organisations - Social Return on Investment Network - developing tools toSROI Network measure social value -
  28. 28. Not everything that can be countedcounts, and not everything that counts can be counted Albert Einstein [attrib.]
  29. 29. thank you more from my blog: Living with Rats Twitter: @juliandobson