Since the introduction of The Public Service (Social Value) Act, the social benefits generated by publicly funded projects now have a greater influence on the way work is won by contractors.
The Act placed a formal requirement on public sector organisations to consider the economic, social and environmental benefits for communities (social value), as well as the overall cost when awarding contracts for publicly funded projects. Examples of social benefits could include firms offering mentoring and work experience placements, while economic value could be created through training the supply chain. Environmental social value could be gained through carbon reduction and increasing biodiversity.
Increasingly, social value is being set out as a standalone set of criteria on bids, giving it serious commercial implications. Local authorities are now weighting social value in tenders at between 5 and 30 percent.
Social value can be challenging for companies to capture and quantify and therefore it can also be difficult to compare in the procurement process. To address this, a National Social Value Taskforce chaired by the Local Government Association and supported by the Cabinet Office and Crown Commercial Services has been formed to develop a national measurement solution based on Themes, Outcomes and Metrics (TOMs) evaluation.
Alongside companies tendering for public sector contracts, organisations with corporate responsibility (CSR) or sustainability policies are increasingly starting to report on social value, as it allows them to measure and share their achievements and goals with their clients and other stakeholders.
For expert advice on how your company can embrace social value to stand out, contact us.