The Social Value Act in 2016: challenges and opportunities

Will 2016 mark the year that the Public Services (Social Value) Act in the UK really gains traction? The legislation was introduced in January 2013 and ‘requires people who commission public services to think about how they can also secure wider social, economic and environmental benefits’.

While there are few people that would dispute the good intentions of the act, many have criticised it for failing to enforce consequences if it is not followed. There are also issues around awareness levels of the act among commissioners.

At the 2015 Social Value Summit hosted by Social Enterprise UK (SEUK) in London last year, crossbench peer and CEO of Turning Point Lord Victor Adebowale said: “This is one of the fastest acts ever to pass through parliament and my measure of an Act is if it passes through really quickly, it’s probably because all the teeth have been extracted.”

A review led by the Prime Minister’s enterprise advisor Lord Young of Graffham looked into whether the Social Value Act’s powers should be strengthened, but in the weeks leading up to the Summit concluded this could not happen until key issues around “awareness, understanding and measurement” are resolved.

2016 looks set to get off to a positive start in the plight to strengthen the act. At SEUK’s third Social Value Summit next month the winners of the Cabinet Office’s Social Value Awards – which were launched to recognise and celebrate the good practice of public service commissioners who prioritise social value – will be announced.

Legislation can take time to embed on the ground, and awareness and understanding are definitely increasing

The Cabinet Office has also committed almost £30,000 to eight social value projects across the UK to help commissioners “improve how they measure their social, economic and environmental impact”.

But how significant are these developments? Nick Temple, deputy CEO of SEUK, says: "Obviously £30,000 is not a huge amount of money, but the projects will help give further insight into good practice, move the agenda onwards and, through the combined networks of Cabinet Office and delivery partners, raise awareness and understanding further. On our project, SEUK is working with three different local authorities, bringing them together to compare their approaches to procurement & measurement, so the funding has given an opportunity to convene leaders in the field and to focus on how we do this in reality.

"It's good news that the Cabinet Office is also working with central government departments directly on social value – a welcome sign of commitment to this agenda. More broadly, we believe that there is a need for dedicated training for commissioners and procurement professionals on social value – this is a task for organisations across sectors, not just for government."

Pioneers Post also asked Temple to what extent the issues highlighted by Lord Young's review are being addressed? He replies: "Legislation can take time to embed on the ground, and awareness and understanding are definitely increasing. We only have to look at the scale and attendees at our annual Social Value Summit to see the growing interest from across sectors. Other activity like the Social Value Awards, the implementation projects, the Health and Social Value Steering Board and a host of local initiatives are building that momentum. 

"Consensus around measuring social value is more challenging – but we’re seeing signs of progress amongst key players, and there is growing consensus around the principles that should underpin approaches to measurement. These shared principles and improving outcome frameworks should be the focus, rather than specific tools – particularly tools that simplistically reduce everything to the financial," he concludes.

Word from the frontline

Landmarc is a private company contracted by the Ministry of Defence that delivers a variety of services including; ensuring military training estates are safe, effective and sustainable places to train national armed forces.

Photo credit: Landmarc

In 2013 Landmarc published its first social value report to gain a clearer understanding of the societal contribution it makes through its commercial operations. Since the Social Value Act was introduced the company has also worked with the Ministry of Defence and Defence Infrastructure Organisation to consider how bought-in services can be used to improve environmental, economic and social well-being within the communities it operates in.

You want to encourage social value but not put them off going for work

Steve Utley, managing director of Landmarc, explains: “If you look at the general public procurement culture, I think the question that needs to be asked is ‘what can you do for us?’ – rather than ‘we already get this, can you do the same but cheaper?’ It’s about looking at the added value, but the challenge is that it’s difficult to measure this so the default is to make financial comparisons.”

He continues: “Contracts with the Ministry of Defence and a number of other governmental departments tend to be for a decent amount of time – from five to around 20 years. That gives a good opportunity to look at the longer benefits of what looking after communities provide.”

It is essential to go into the contractual relationship as partners Utley explains. “Landmarc's experience over the past 13 years is that if you can work in partnership with your client, that helps a great deal because you can work together to understand the social value implications of the work you’re doing.”

While Landmarc – and Interserve, the company that founded it – work closely with SEUK to promote the importance of social value in government commissioning, Utley also acknowledges the commercial pressures that detract from this agenda.

“The challenge we’ve got is that we’re delivering a contract that involves a lot of hard work and so people tend to be very focussed on the contract delivery, rather than the wider contribution they are making to the communities in which they work – mostly rural communities,” he says.

Another of the challenges Landmarc's managing director cites is that while his team and that at the Ministry of Defence might want to work with as many social enterprises as possible in their supply chains, “if your tendering process is too lengthy and complex, you could actually put some of the small contractors off”. 

He continues: “You want to encourage social value but not put them off going for work.”

Landmarc has also found in its attempts to work with more social enterprises that “social enterprises tend to be based nearer the cities”, making it “hard to source them in the rural areas” where the company mostly works.

The 2016 Social Value Summit will address these and many other issues relating to the Social Value Act. It takes place in London on 11th February. To find out more, please click here.

Photo credit: Jacinta Iluch Valero