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Delivering social value

7 Jul 2022

Social value is now a key component of public sector contracts, but how to define value-adding initiatives and then deliver and report on it is still a work in progress

Changes in UK government procurement guidance in December 2020 introduced a new dimension in assessing tenders: social value. The introduction of a mandatory weighting of at least 10% (with some exceptions) sends a really clear message: Government wants a good job, at a fair price, and a better world while you are about it. Suppliers are investing in this: a good social value proposition can make the difference between winning and losing a contract worth hundreds of millions of pounds. But identifying what counts as social value and how it should be delivered is far from straightforward. It is a problem for both sides of the tender process: for civil servants tasked with sizing up competing social value proposals and for suppliers, who must now include tangible social value initiatives in their bids.

Meaningful information

The first challenge for government and suppliers alike is that social value is a woolly concept. Social Value UK , the professional body for social value and impact investment, offers a seductively simple definition: “Social value is the quantification of the relative importance that people place on the changes they experience in their lives.

But what do we know about the lives of others and what matters to them? Therein lies the brilliance of the definition. To design a project that will bring social value to a community you have to find out who lives there, the problems they face and how your expertise might be relevant to solving them. There is no off-the-shelf answer. Social value, in short, is the way your project is going to improve people’s lives. To know that, you’re going to have to devote resources to understand, design, and then implement social value initiatives.

Making lives better

Social value needs to be relevant to the subject matter of the contract and the public sector needs to define appropriate frameworks and strategies, against which suppliers can define specific interventions that will improve lives.

The scope of the contract is therefore critical. Capgemini has experience in delivering IT projects that improve public services which deliver value for the people government serves and for taxpayers. But we now need to do more – to demonstrate how the delivery of these projects is providing additional social value.

Scale and place are important considerations. In large contracts, stretching over years, it makes sense for companies to design long-term initiatives such as apprenticeships. For contracts with a strong local presence, partnerships with local community organisations will help to deliver targeted and tangible outcomes.

Social value will be most impactful when delivered over the long-term, through deep relationships between the public sector and its suppliers. For example, skills and capability interventions take time and investment, with clear development pathways for those involved. Social value cannot be a quick fix, but it can still be delivered in short-term contracts. For example, we have recently delivered education and skills development in local higher education establishments.

Nuanced response

In its guide to using the Social Value Model, the government asks for economic benefits (employment and training), social benefits (more cohesive communities) and environmental gains (reduced carbon emissions).

This is not a zero-sum game. Delivery of economic benefits does not preclude achieving environmental or social benefits. Capgemini is focused on delivering social value in a cohesive, joined-up way: this includes skills development through apprenticeships, carbon reduction through the delivery of IT services, and community outreach initiatives. We’re now focused on how to drive economies of scale across our contracts, to provide even more social value impact.

Common purpose

Let’s be clear: we all live and work in communities and, like government, we want to make the world a better place. As individuals, and within our organisations, we are committed to achieving social value as part of what we do.

But how can government and suppliers alike ensure that what’s promised is delivered, both to benefit communities and to maintain the integrity of the bidding process?

Government commercial teams will need to develop their social value capability throughout the commercial lifecycle, from business cases, tendering, to contract management and upskill in social and economic aspects of social value. Communication and collaboration are also vital: procurement teams must work closely with suppliers to give a clear indication of what they expect, allow latitude in the way in which social value is delivered, and maximise impact of these initiatives.

At the same time, suppliers need to integrate social value into contract design and delivery, avoid double-counting and work closely with local government, non-governmental organisations (NGOs) and others to explore new ways of delivering social value and providing insights, rather than just reports, which can benefit the public sector.

It’s a sea change in public procurement, but one we should see not as a problem, but as a huge opportunity to make a difference.