Last week, we gave an overview of the upcoming changes to NHS procurement. From April, the same Social Value Model we saw introduced to government public procurement in January 2021 will also be embedded into the NHS’ process. This marks a key shift in prioritisation of social value. NHS trusts and their suppliers will soon be required to prove a keen understanding and interest in the generation of social value.
There’s extensive guidance out there for those who need it. The government has produced some useful documents for the transition – from the introductory PPN06/20, to their Social Value Model document and guide on how to use it. But a lot of questions remain. So we’re here to answer some of these for you today!
What does social value mean within the context of the NHS?
Social value in NHS procurement is about forming collaborative relationships between NHS procurement professionals and their suppliers that contribute as much social value as possible within every contract.
It’s about identifying desired social value outcomes and using these to make the best choice of contractors. Those that will achieve the largest amount of social value for money. Whether you’re looking to improve, say, local employment levels or promote better mental health.
These contracts might be developing new services for stakeholders or procuring equipment for day-to-day operations. Regardless of what a contract is specifically for, this is about going above and beyond to create additional social value.
“It’s thinking about the community, decarbonisation, local employment, wellbeing and making sure people have opportunities for training and development. We really encourage trusts to look at what the need is in their areas, what social issues need to be resolved, and what areas can a supplier help improve things — those things are at the heart of the Social Value Model.” – Alexandra Hammond, NHSE’s head of sustainable procurement.
Why are the changes happening?
The NHS is in a powerful position to achieve even greater public good than they already do. With large networks of suppliers and every single person in the UK a stakeholder in some way, there’s no end to the lives they could change for the better.
But, in the wake of COVID-19, the NHS is suffering from increased financial uncertainty, staff shortages, and growing demand. This new model has been created to better embed social value in the procurement process. Think of it as a way for them to guarantee social value in everything NHS trusts will already be doing.
The model encourages trusts and suppliers to really get creative on striking a balance between value for money and social value for the public.
The new system will enable system-wide collaboration between departments and organisations. This should help projects achieve individual trust objectives. As well as help external social and environmental development that might have previously been overlooked.
It will also diversify NHS supply chains and encourage suppliers to become more competitive in their tenders. In their guidance, the government explains:
A competitive and diverse supply landscape can help to deliver innovation in public services, manage risk and provide greater value for taxpayers’ money. The more effectively the public sector normalises social value in our commercial activity, the more wholeheartedly the supply market will be able to adapt and respond. The result will be a fundamental cultural shift in behaviours and attitudes.
Isn’t everything the NHS does considered as social value?
To some degree, yes. Anything the NHS does to change individual lives or communities for the better could be considered social value. But, importantly, it doesn’t count as social value in terms of the new Social Value Model.
The government’s guidance is fairly clear:
“In-scope organisations must ensure that any benefit identified as social value in tenders or contracts under this policy is over and above the core deliverable/s of the tender or the contract.”
Any social value the contract would already make, while valuable, shouldn’t be a determining factor in awarding contracts. Instead, there’s a need for suppliers to evidence what extra social value they plan to deliver.
When does social value come into play during a contract?
There are no hard and fast rules. But as a general rule of thumb: the sooner NHS procurement professionals embed social value into their process, the better.
“To be effective it is essential that the contracting authority’s consideration of social value starts at the pre-procurement stage, and that they carry it on through all stages of the procurement lifecycle.” – The government’s Social Value Model.
The earlier procurement teams identify their key objectives, the more likely they are to achieve their chosen outcomes. And the maximum value that can be achieved throughout a project’s lifespan.
What about after a contract is awarded?
Social value is about more than suppliers making promises on paper. To fully achieve the new model’s aims, procurement teams will need to put robust systems in place to continue tracking social value after a contract has been awarded.
By holding suppliers accountable, teams can ensure their contracts are meeting or exceeding their social value objectives. This can be achieved by tracking a project’s delivery of social value through predetermined KPIs and reporting metrics.
Is there room for adapting the model?
If an organisation is more mature in their understanding and experience with social value, they can go over and above the guidance laid out in the Social Value Model. However, any additional efforts and organisation-specific outcomes must be in addition to the government’s core themes, not instead of.
Moving forward, NHS procurement professionals will have to strike a balance between their trust’s and local area’s desired outcomes and those outlined by the government.
“Whether there is one contract or many, it is critical to maintain the ‘golden thread’ from government priorities via business cases through to procurement specifications and the assessment of price and quality when awarding contracts.” – The government’s Social Value Model.
This new Social Value Model is truly a gift that keeps on giving. The more you read into it and understand, the more questions that seem to crop up. But fear not, there’s still time to iron out your understanding and get ready to make the transition simpler. The Impact team is also always here to help with whatever you might need.
We’ll be back next week to look at April’s changes from the point of view of suppliers. Come back for our top tips for getting started.
Embedding social value into your procurement process doesn’t need to be complicated. In fact, Impact streamlines the entire process from start to finish. Receive, analyse, and rank bids automatically, tie supplier commitments to your trust’s individual objectives and targets, and automatically carry over successful bids into our robust reporting platform. To find out more, schedule a demo or get in touch with the team on 0161 532 4752.