Tips to maximise social value outcomes through procurement

Social value is now standard in public procurement, impacting an estimated £100 billion of public spending each year in the UK. Yet there are still many more opportunities to maximise delivery – particularly when it comes to procuring professional services. In this article, social value experts Lori Alexa-Smith and Kieran Ronnie share their top tips.

With the removal of a single word, the Procurement Act 2023 introduced a major change to tender evaluations that will affect future procurement across the board.

Rather than seeking the “most economically advantageous tender”, as in the past, contracting authorities must now evaluate for the ‘most advantageous tender’.

This small language shift has big consequences. It means price is no longer the determining factor; instead, the best bids are those that deliver a holistic solution for the people, communities and economies they are intended to serve.

Here are our top tips on how procurers can collaborate with professional services providers to make social value work as a guiding principle, and a key legacy of our work together.

1/ Understand how the service or goods you are buying can bring embedded and added social value

Procurement is an opportunity to understand the key skills of the organisations you are buying from, and to focus on these for maximised outcomes.

The goal is to best use your suppliers’ core abilities for your project’s social value aims. For example, if you are procuring design services, how can they use or share their design skillset for added value outcomes?

Consider the service or goods you are procuring and ask: “how can this help achieve our social value objectives?” This might include anything from focusing on increasing green skills, biodiversity net gain (BNG), to addressing local homelessness. Whilst the local need will vary, linking social value to the project delivery will result in a more strategic, targeted and embedded approach.

The business type, the makeup of a bidder’s workforce, geographical location and specific skill sets should all be assessed through specific questions. Knowing what social impacts are important to a business helps build a clear, collaborative relationship from the outset and makes it easier to co-create a social value legacy that is meaningful and sustainable.

Once opportunities to add social value are identified, consider their impact throughout the project lifecycle and think how these resources – together with the strengths of other stakeholders – can be combined to increase impact. How can contractors, suppliers and consultants deploy their individual skillsets and attributes in collaboration together?

2/ When designing outcomes, researching, understanding and collaborating within communities is key

There is a huge opportunity for procurement activity to address specific local challenges, so don’t miss out. Identify your local needs and leverage your spending to see these issues addressed.

But how exactly is this done in practice?

Understand your local community through engagement, local needs analysis or social research. When procuring, rather than asking broad, generic questions such as “what social value will you deliver on this contract?”, it can be more effective to use your local analysis to identify the issues you want tackled. Link to specific local plans, or even local council social value policies or themes. This results in higher quality social value submissions, and activity that is aligned with – and supports – local priorities.

Even procurement of large frameworks that cover a broad region or area can still allow flexibility of approach, and provide localised strategies within different communities that contributes to a shared overall objective and legacy.

The goal is to co-design social value activity with the community a project is based in, so more accurate, targeted interventions and opportunities can be identified or made. Social value should be delivered with, not imposed on communities. This also requires research, conversations and collaboration with local people and organisations.

Thinking about a project’s legacy – what change it will create within its community, and what it will be remembered for – from the outset is key, so that it can be embedded throughout the project lifecycle.

3/ Seek professional services partners that are collaborators – both with the procurer and the wider supply chain – to create a lasting legacy

Another consequence of not thinking holistically is procurement that does not take a whole-life approach, or operates in silos. Collaborating on social value makes it easier to embed it across all stages of the project lifecycle – from the business case stage, to design, procurement, construction, asset lifecycle and beyond. This is a clear win for any procuring authority, so seek suppliers that take a similar long-term, collaborative view.

Provision of long-term benefit and creating a legacy is how we advise considering built environment and professional services’ social value contributions. This could look like targeted, sustained activity that forges pathways from local schools into training and professional qualifications, with the long-term goal of creating a more diverse industry. It can look like seeking local professionals with lived experience of the communities they’re designing for. And it can also look like being aware of the people who built the programs and technology we are using to design projects – and seeking to understand if this introduces any assumptions or biases into the design.

4/ When procuring, focus on outcome quality, rather than quantity

Procurement which is only quantitative or monetised runs the risk of driving the wrong behaviours. An example of an unhelpful behaviour is suppliers committing to high monetary value activity, that has no correlation to local needs, to achieve a higher monetary score. These behaviours mean the opportunity for meaningful outcomes can be lost.

Whilst purely quantitative procurement evaluation is rare, scoring criteria can often set expectations or provide targets that organisations aim for. Notably, the Social Value Model is scored on quality of outcome rather than quantity, and procuring organisations should make clear how responses will be scored to provide clarity and confidence to bidders. Ensuring suppliers understand the issues, and have the strategy and resources needed to deliver on their plans, is more important than evaluating them on how many outcomes are offered, with potentially little evidence of their ability to deliver provided.

5/ Ensure social value in procurement is then carried through into project delivery – rather than stopping once the project goes live

Although the government’s Social Value Model provides an effective guide through the procurement process, we must ensure the commitments and activity do not end here, and are carried through into project delivery. Buyers and suppliers both need to make sure they have the mechanism to take a social value submission, and to embed it into their contract management for ongoing delivery, monitoring and reporting.

It is important buyers and professional services understand what they can and cannot do, so that unrealistic commitments or data reporting expectations don’t create issues once project delivery starts.

6/ Use empirical data when reporting to evaluate social impact accurately

Given that quality is such a core principle of effective social value, delivery and impact is not always simple to measure.

Numerical, easy-to-quantify data is of course very useful. For example, at the early procurement stages, data and statistics can be used to identify where the areas or communities are that require support, and what they need.

Later on in the project lifecycle, there are social value measurement frameworks that can provide a quantitative, monetised measurement of the social value created. This quantification is important and a useful approach as it supports value for money analysis, decision-making and communication.

However, measuring social value over the lifetime of a scheme also requires qualitative input. The impact on communities and individuals is not always obvious or direct, and it can take time to materialise. Empirical data is required, alongside nuanced, considered reporting on the non-numerical impacts of delivering social value.

Without empirical data, there is a danger of losing sight of the impact or change in people’s lives through our social value activity, and therefore the ‘story’ of what has happened. This is a critical part of what we do, and why. Whenever procuring organisations report the impact of their activities, it should link back to that original local need or challenge. Consider whether this need has this been addressed, and how that change can be demonstrated. This creates clear, compelling evidence that positive social value outcomes have been created.