As of April, NHS organisations will have to ‘explicitly evaluate’ social value when procuring products and services. We already saw the PPN 06/20 changes take place in government procurement last January, but now it’s the NHS’s turn to take their social responsibility to the next level.
The ultimate goal? A seamless collaboration between NHS procurement professionals and suppliers to deliver as much social change as possible. Whether that’s through the procuring of products and equipment or developing new services for stakeholders.
We understand that these changes can’t happen overnight. So to give plenty of time for you to get to grips with the new requirements, we thought we’d spend the next month breaking the new Social Value Model down. Today, we’re starting with an ultimate guide – a simplified overview of what April’s changes will involve for NHS procurement professionals and suppliers alike.
The minimum weighting
“Under the Model, a minimum overall weighting for social value of 10% of the overall score is mandated whenever any of the social value policy outcomes are included in the procurement.” – The UK government’s “Guide to using the Social Value Model”.
To put this simply, as of April, 10% of all NHS tenders’ scores must come from social value. This can also be higher if a supplier has the capacity to commit more towards it. But the minimum weighting is being introduced as a way to clearly demonstrate social value as a priority.
By setting this expectation across the board, we can make sure that every successful contract contributes significant, meaningful social value. The 10% minimum will also work to level the playing field of NHS procurement. It allows smaller suppliers with fewer resources at their disposal to compete with their larger counterparts for contracts.
The themes
“The Model establishes common commercial objectives for social value. These focus on a set of strategic themes and related policy outcomes which reflect agreed cross-government priorities.” – The UK government’s “Guide to using the Social Value Model”.
To align individual organisations and trusts with the wider objectives of the government, there are five strategic themes in the new model:
- COVID-19 recovery
- Tackling economic inequality
- Fighting climate change
- Equal opportunity
- Wellbeing
As well as eight policy outcomes:
- Help local communities to manage and recover from the impact of COVID-19
- Create new businesses, new jobs, and new skills
- Increase supply chain resilience and capacity
- Effective stewardship of the environment
- Reduce the disability employment gap
- Tackle workforce inequality
- Improve health and wellbeing
- Improve community integration
These are to ensure that individual projects contribute to nationwide COVID-19 recovery and social change. At the same time, they also align with global goals such as those laid out in the UN’s SDGs.
We broke down the new Model’s themes in greater detail here and here. Although it’s from the perspective of government procurement, many of the ideas will ring true for NHS trusts and suppliers.
What the tendering process will look like
To help NHS procurement professionals and suppliers get to grips with the new guidance as quickly as possible, the new model provides an extensive selection of ready-to-use questions, award criteria, sub-criteria, and metrics for each of the policy outcomes.
With everyone receiving the same in-depth guidance, it should lead to greater consistency and efficiency for both tenderers and suppliers. And that all evaluation and scoring will be fair, inclusive, and transparent.
Choosing the relevant award criteria
Both the award criteria and sub-criteria found in the guidance highlight how a supplier might contribute to a chosen outcome. They help suppliers complete their bids effectively and procurement professionals best evaluate tenders in terms of their social value.
Let’s look at an example taken from the outcome of tackling economic inequality.
The first menu award criteria is this: create opportunities for entrepreneurship and help new organisations to grow, supporting economic growth and business creation.
The sub-criteria then goes one step further. Outlining that, to achieve this, a supplier may propose “measures to make the supply chain working environment conducive to a diverse range of suppliers and growing businesses”.
This demonstrates a tangible way that suppliers may align their proposed actions with the wider outcome. A way that they can tackle economic inequality while also completing the contract at hand.
It’s up to the procurement teams to determine which criteria and sub-criteria from each outcome are most relevant and proportionate to the contract at hand. And to share this with their prospective bidders.
In doing so, they can create a cheat sheet for suppliers of what a successful bid could and should contain. Not only will this help suppliers to better formulate their bids, but it will save procurement teams time by only inviting meaningful, relevant value commitments.
A qualitative approach
Rather than simply awarding contracts based on the amount of social value proposed, procurement teams must also assess the quality of social value proposed against each selected policy outcome.
There are a few examples given in the government’s guidance. First of all, there’s a 5-band scoring system that marks each supplier’s response as either excellent (4 marks), very good (3 marks), good (2 marks), poor (1 mark), or fail (0 marks).
Another option is to maintain a minimum standard. For example, stipulating that a supplier must achieve a minimum score of 2 on certain criteria you deem to be most important or an average of 3 marks across all their social value responses.
The idea for both of these is to provide an objective way for the contracting organisation to assess the quality of a supplier’s commitments. It makes for a far more fair, transparent, and efficient procurement process.
How best to get started
So what’s the best way to put this information into practice and get started on your preparations for April? We really can’t stress enough the importance of creating a social value policy on behalf of your organisation. This ensures a consistent approach across your trust and encourages greater buy-in from staff and suppliers. A clear outline of your expectations will make it far easier for suppliers to make these efforts with you.
Here’s an example from NHS Digital that does the job nicely. It says what social value means to them, what it will look like in practice, and breaks down each of the government’s themes and relates them back to their organisation.
Ask yourself: what themes and outcomes can your suppliers help most with? What are the most pressing needs of your stakeholders and local area? These questions should shape your policy.
Suppliers will all have different levels of understanding when it comes to social value. Meaning it will also be important for you to begin having conversations about it early, allowing enough time for suppliers to find their feet and align themselves with your objectives and expectations.
And there you have it! We’ve only given a topline overview of the changes here. But if you want to do a deeper dive into what April will entail, you can check out the official government guidance here and here. Warning: you’ll need a good few hours!
We’ll see you next week where we’ll go back to basics with some frequently asked questions about the PPN 06/20 changes.
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