Measuring Social Value Isn’t Just Possible, It’s Essential
The way that social value is evaluated in publicly funded contracts is becoming more formal and consistent. This is good news for procurement teams and construction firms. The change in emphasis will bring greater clarity and consistency.
The requirement to ‘consider’ social value that came in with the Public Services (Social Value) Act 2012 helped to raise the profile of social value. It rightly recognised the capacity the construction sector has to ‘give back’ to society. This is something Osborne has always sought to do. Making it a consideration in contract awards was a welcome step.
Clarity and Consistency
For procurement teams there were always significant grey areas around what counted as social value, how different initiatives could be evaluated and compared, and what ‘consideration’ meant in terms of bid scoring and contract awards.
From January 1, 2021 the expectations became clearer. There are now five defined categories with suggested qualifying activities listed for each. The categories are:
● Covid-19 recovery
● Tackling economic inequality
● Fighting climate change
● Equal opportunity
● Wellbeing
There’s enough flexibility for each procurement team to select its own priorities. Again, this is welcome as the most meaningful social value is always defined by the communities affected by the projects being delivered. A top-down, prescriptive approach will always miss the mark.
For contractors, the challenges are to embed social value into project delivery and to offer genuine accountability over outcomes. Frameworks and long-term contracting arrangements are always a better platform for lasting change and to develop appropriate outcomes and KPIs.
Quantifying Social Value
More formal evaluation during procurement will inevitably lead to social value being measured and quantified more rigorously. Solutions won’t initially be perfect but this is the route to greater objectivity, a more level playing field and better outcomes.
To ensure that Osborne can accurately report on the social value we deliver we have adopted the Thrive social value measuring tool. This offers complete transparency for our customers and stakeholders on our social value contribution, and will be a vital management tool to help us understand the difference we make across our business.
