Commissioning and Procurement for Social Value
In Salford we want to deliver the best possible outcomes for the city by ensuring that Social Value is a core principle of our commissioning and procurement plans and practices. We want to embed Social Value in our procurement processes across the public sector in a relevant and proportionate manner. This will be supported by strong governance arrangements, engagement with commissioners and providers, and contract compliance monitoring.
Consideration should be given to including Social Value in all stages of the commissioning cycle. This could include:
- identifying opportunities for creating / realising Social Value through the assessment of needs, resources and assets, stakeholder engagement and consultation, and market analysis / development
- embedding Social Value in strategies and commissioning plans, and
- incorporating Social Value into the procurement process – for example, tender specifications and question frameworks, and subsequent delivery and monitoring / evaluation
Find out more about how and when to think about Social Value in the commissioning and procurement cycle from the AGMA Social Value Training Presentation from the download area at the bottom of this page.
Information and intelligence is critical to supporting the assessment process. This assessment should:
- Explore needs and assets to build a picture of what works and current strengths, in addition to what support is needed;
- Identify the social, economic and environmental outcomes you are looking to a deliver within the ‘service’ and for the wider community.
Data and intelligence can be obtained from:
- National and locally available data sets
- Monitoring / evaluation information from existing delivery
- Consultation and engagement with current / potential service users, providers and wider stakeholders
- Market / gap analysis – assessing what is currently being delivered locally and any gaps in provision
Social Value encompasses a broad menu of social, economic and environmental benefits and examples are provided in chapter one. However, ‘relevant’ Social Value depends on the subject matter of the specification. Consideration should be given to how providers can deliver maximum benefit, not just in relation to the core, commissioned ‘service’ outcomes but also from the way that the service is planned and delivered in relation to the wider community.
Consultation and engagement should be built into all stages of the commissioning process, from the initial assessment through to specification design, tender evaluation and service review. This could include:
- focus groups with service providers to find out what is working well and what is not
- informal and semi-structured interviews with service users
- appreciative workshops with a specific target group – for example, young people, to get a picture of their needs and wants
- people who are expected to benefit from the service being involved in interviewing and selecting providers
- users of the new service reviewing the performance of providers through a variety of methods such as mystery shopping or as peer researchers
The development and delivery of commissioning strategies and plans should be as open and transparent as possible and designed to build and maintain good long-term relationships with providers. This could include:
- A commitment to working in partnership with a broad range of stakeholders, including provider organisations
- Recognising that many providers are experts in their service area and involving them in the design of services
- Recognising the added value that some providers can bring – for example, resources, volunteers, local knowledge
- Informing providers of future commissioning activity through a ‘Commissioning Intentions Plan’.
- Developing and delivering a ‘Market Development Plan’ to ensure that an appropriate level of skills, expertise and capacity is available throughout the market – via activities such as capacity building workshops and drop-in sessions.
Putting Social Value specified into the ‘core’ specification has a number of benefits.
- Included in the quality score
- relevant and proportionate Social Value – you decide
- greater potential for value for money and to deliver City Plan outcomes
- allows Social Value benefits for all participants /clients of service AND other stakeholders
The number and nature of Social Value outcomes will vary between every contract specification as all the things that you specify must be ‘relevant and proportionate’. It is recommended that you ALSO include a question in your Invitation to Tender about ‘added Social Value’, asking providers to suggest ways that they could bring additional social and environmental and economic wellbeing benefits to their service.
In this way, you can ensure that Social Value is maximised as part of the whole of the QUALITY section of your tender evaluation AS WELL AS a separate percentage for social ‘added’ value.
Public sector organisations often have a written constitution that prescribes what they are allowed to do. Many have specific arrangements relating to the conduct of tendering so as to ensure transparency and value for money. These arrangements need to enable the organisation to take Social Value into account. You will need your executive to endorse any changes to policies, procedures and standing orders. Example governance wording can be found in the procurement toolkit module in the ‘Useful Resources’ section.
It is important that commissioners and procurement staff understand what the potential is for building in Social Value requirements. This should be done at the earliest possible stage, i.e. prior to advertisement. It may also be useful to consult with local communities, service users and/or the market to better understand what is achievable. The Public Services (Social Value) Act actually makes it a requirement to consider to consult about services that are being tendered. It is of course always necessary to allow stakeholders sufficient time to provide a considered response.
Procurement teams have long recognised that the cheapest price is not always the best value. This is why in many cases public sector procurement uses MEAT (Most Economically Advantageous Tender). MEAT will allow you to specify the ratio between quality and price. Within the quality score you can build in a reference to Social Value and the importance that you attach to it. An alternative approach (usually at the commissioning stage) is to try to move Social Value into the “Core” specification. So, for example, if the specification is to construct housing there will be Social Value in asking the contractor how they intend to ensure that they provide appropriate green spaces or play areas. We might also ask how the contractor would support the existing retail sector or how might the transport infrastructure be improved. The benefit of this approach is that Social Value can be afforded much greater emphasis in tender evaluation.
This depends on the subject matter of the tender / contract. What is clear is that it is not permissible to take a blanket approach to Social Value by asking contractors to provide something that is wholly unconnected with the service.
Examples of what WILL be permissible are as follows:
- Environmental: Requiring only low emission vehicles in a transport contract.
- Economic: Creation of employment opportunities for the long-term unemployed or training and apprenticeships for young people in a construction contract in a deprived area.
- Social: Encouraging the use of SMEs particularly those based in or near Salford as part of the supply chain.
The way in which you package a contract will have a direct bearing on the providers that apply. For instance, aggregating related services together may make sense if we are trying to achieve economies of scale. This will however, be likely to disadvantage smaller contractors who may be attuned to local needs and be better equipped to provide Social Value. Question the merits of large contracts; Can they be broken down into geographic packages? ; Who will be in the best position to deliver better “Whole life “benefits and satisfy end users as a result of Social Value? The contract length should also be justified by the investment requirement and procurement costs.
No, as this may potentially discriminate against EU member states. What we are able to do however, is invite potential providers to specify how they may help to regenerate a community and make a commitment to reducing worklessness (Long term unemployment).
Many organisations see the value in paying the Living Wage. Whether it is permissible to insist that external organisations also demonstrate a commitment to the Living Wage is a matter of considerable debate. Some commentators say that it contravenes EU Procurement rules. Others say that providing it does not discriminate against EU member states and that it is relevant and proportionate, it is permissible. If a tendering organisation wishes to say that it actively encourages tenders from companies that do pay the Living Wage this minimises the risk of challenge but it is not a factor that can be used to exclude companies who do not pay the Living Wage.
A one size fits all approach is not permissible. Every contract has to be looked at on its merits. Anything between 5-15% of the overall value will usually be permissible. The key is to consider the whole life savings that may be achieved and the contribution it makes to strategic objectives.
Many tenders will be advertised on The Chest. It is suggested that even at this early stage potential providers be made aware of the Social Value element to the tender. An example advertisement is included in the procurement toolkit module in the ‘Useful Resources’ section.