5 Tips for Embedding Social Value in Public Sector Construction Contracts

Posted on the 14th February 2019

The Social Value Act (2012) is about empowering contracting authorities in public procurement, to compel suppliers to deliver local social, environmental and economic benefits in addition to what it is they have been asked to supply in the core specification of the tender.

The Social Value Act is currently limited to bodies operating within the public sector, from housing providers, local government, the NHS and construction. Increasingly, public contracting authorities are giving significant weighting to social value in tenders. For example, last February Manchester City Council increased the weighting of social value from 10% to 20% in contracts and many other public bodies are following suit. Social value is increasingly a determining factor in the success of an application.

As social value becomes consistently embedded in government policy, organisations have the opportunity to strengthen their social responsibility and win contracts in return. The idea is to reward those doing good.

Due to the growing relevance of social value for a larger cohort of industries, we partnered with Firesouls to produce some hints and tips to consider when applying public sector contracts.

1. Recognise your key offering.

Social value requirements are often led and defined by the contracting authority. Before you commit to a public tender, identify how you can meet, or go beyond the expectations of the contract. More often than not, organisations are delivering social value even if they are not aware of it.

So, here are a few things to think about when refining your offer:

What does your organisation have in terms of spare capacity it can put to use?

Can you use your existing expertise to create change?

Reflect on what you are doing already?
If you’re already employing local people, say so. If you already create apprenticeships, let the authority know!

Other initiatives such as workshops, spare resources and investment grants can go a long way to build strong relationships with the communities you’re working in and create positive outcomes, in a way that is cost-effective.

2. Think big, and work backwards.

Tailor your social value to high priority issues in the local area – if you’re working for a local council, reference their commissioning outcomes or community development plans. You’ll maximise the impact of your resources by addressing evidenced areas of need. For example, if youth unemployment is high, can you provide job start programmes?

You can save yourself work and add value by partnering with local organisations you can support to deliver those outcomes. Be creative about this – you don’t have to stick within the limits stipulated in the bid. For example, If you are building a hospital and mental health is a high priority issue in the local area, could you provide resources and expertise to address that need?  Remember the local VCSE are the experts when it comes to creating local social impact, so it would be misguided not to take advantage of that expertise.

Consortium bids are an attractive solution here. Legally, contracting authorities are obliged to allow consortium applications. They are expected to be weighted as important as traditional bids. Consortium bids are noted to be advantageous as they promote the inclusion of SMEs in larger contracts – which are often seen to be out-of-reach for the smaller business person. This engages local business more deeply, inspiring them to be passionate about community development plans. What’s more, it improves the delivery of social value as more apprenticeships, for example, can be supported.

Be realistic with what you promise. social value is often contractually binding and you have a duty to deliver – and reap the benefits (or face the consequences).

3. Be willing to ask questions and seek out knowledge.

The scope of social value is very broad and can be brought into all stages during the lifecycle of a construction project. UKGBC provide useful outcomes that can be used to demonstrate social value during a tender, centring in on the themes of: jobs and economic growth; health, wellbeing and the environment; and strength of the community. These can be extended upon to address other CSR topics including diversity and representation.

Articles and reports like this can assist you in understanding what others are doing and applying strong principles within your organisation. Similarly, networking at events can open up discussions about consortium bids and learn from the experience of others in person.

4. Report and evidence.

This is all about understanding how you are going to prove that you have delivered, or are delivering, on your contractual obligations. 

Plan out your delivery timescales and how you’ll evidence social value over the lifetime of the contract. Will you offer an extra level of detail or impact assessment? Will you carry out impact assessments like SROI or report qualitatively? Reporting on your social value needn’t be a laborious chore to be completed on an annual basis. Do not leave it to the last minute – think proactively, not retrospectively.

Narratives, real-life stories and case studies should not be underestimated. They can particularly insightful when married alongside your financial impact, but are informative in their own right. A collection of these data sets will allow you to thoroughly inform your contractor about your impact more richly.

5. Think about how you are going to sustain your social value, post-contract.

Evaluate and learn from your previous social value projects, even if that particular application was not successful. By creating a framework of good practice in your organisation around social value, and making it part of the way you operate you’ll be setting yourself in good stead for future business.

While each application for tender will need to be bespoke to the specifications of the contract, you will be able to demonstrate the success of your previous outcomes, and it’s long-term influence on the current bid. There will be elements of social value that overlap, particularly if you are applying for similar types of contracts. You should utilise your experience and leverage this exposure to social value to add credibility to your new bid.

Follow Firesouls on Twitter @FiresoulsUK and @SocialValueEx or subscribe to the ‘Friends of Firesouls’ newsletter for more.

About the author:

Impact | Firesouls

Lee Smorthit & Ruth Shave

Firesouls is the organisation behind the Social Value Exchange, an online marketplace where resources are channelled into solving local problems. Impact Reporting is an easy-to-use, cloud-based tool, that streamlines the way you capture, monitor, and produce real-time reports on your social and environmental impact.

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