Social value: Manage, measure, and make it meaningful

Contracting authorities understand and want the benefits of social value through public procurement. To achieve this, the focus must shift to managing and measuring the process, writes Brendan Gallagher, Social Value Manager at AtkinsRéalis.

It is over a year since mandatory social value scoring became applicable to public procurement contracts. Government tenders must now allocate at least 10 per cent of total award criteria to social value, where Public Contract Regulations apply.

When we consider that the Northern Ireland Executive spends circa £3 billion a year on goods, services, and essential construction and engineering projects, we now have a great opportunity to use that public spend for the common good – making a real difference to individuals, communities, and small businesses.

There is a general consensus that the social value policy has landed as smoothly as could have been expected, embedding neatly into the procurement process. Taking the temperature among AtkinsRéalis’s public sector client base here in Northern Ireland, where we support clients with the management of construction and infrastructure projects, we have found goodwill and understanding around the policy.

There is growing awareness of the full benefits, with contracting authorities keen to deliver meaningful social outcomes that tackle local problems and act as a catalyst for action from all stakeholders. These combined efforts can align to help contracting authorities achieve their environmental, social and governance (ESG) aims.

Northern Ireland may have arrived at the social value agenda later than the rest of the UK, from a policy point of view, but we stand to benefit from the key asset of lessons learned elsewhere. Certainly, at AtkinsRéalis we have spent over 10 years embedding social value into our own business strategy and helping clients do the same, learning a great deal in the process. Managing social value is the next critical step in achieving intended outcomes. This next phase, for all contracting authorities, local councils, and other public sector bodies, is therefore a time of learning how to manage social value and suppliers effectively.

Building ethical and resilient supply chains is one of the four key scoring themes and there is work still to be done on this. Northern Ireland’s 840 social enterprises, like many SMEs and microbusinesses, need support to tailor and market their social value offering. By doing so, smaller businesses have the potential to win reserved contracts and become a supply chain partner for public contracts.

Smaller businesses can help established supply chains to diversify and innovate around new ways of contract delivery, bringing fresh ideas and efficiencies, addressing supply chain risk, and availing of emerging opportunities. Supporting lead bidders in their delivery of public contracts, in a more social, economic, and environmentally efficient way, is a great way to build new business partnerships, thus removing one of the barriers to smaller businesses’ full participation in the market. Our team is building a collaborative partnership with Social Enterprise NI to help the social enterprise sector maximise these opportunities.

Managing and measuring social value makes the public spend work harder for local communities, but management and measurement skills are still maturing. The overriding challenge now is for contracting authorities to build, manage, and measure social value strategies that achieve the most impactful outcomes from their procurement and subsequent contract delivery activities.

Authorities should consider social value as early as possible, to identify which themes, initiatives, and intended outcomes are most relevant. If early community engagement and pre-market engagement are not carried out at the early stages of public procurement, it is all too likely that social value delivery will become a tick-box exercise, where supply chain commitments are disparate, uncoordinated, unmeasured, and short-term. All suppliers generally want to fulfil their social value obligations (as well as being legally contracted to do so), but they perhaps lack the experience, resource, and time to deliver meaningfully.

Yet with a more strategic approach and proper management, innovative, and long-term outcomes are possible. The innovation often derives from collaboration, potentially among all delivery partners, contracting authorities, local agencies, voluntary, community and social enterprise organisations (VCSEs), local residents and business stakeholders. Authorities are typically time-pressured when it comes to bringing those partners together, but investing time in this can result in a network of trusted brokers and an informed pipeline of beneficiaries.

While innovation is both needed and welcome, applying more flexibility around the recommended themes and guidance potentially runs the risk of subsequent challenges post award. We often see this when social value requirements are contractually agreed before there is clear understanding of local beneficiary needs and supplier capability. Interpreting the guidance, to allow both compliance and necessary flexibility, is a skill which must be mastered to produce successful solutions, such as we’ve seen in other jurisdictions.

Social value, applied correctly, is a ‘win, win’ scenario for all, as so many positive outcomes can be achieved. However, the journey from procurement to social value delivery takes time, learning, collaboration, and resource. Our social value advisory service in Northern Ireland manages social value delivery in a way that identifies appropriate social value opportunities through procurement and aids meaningful outcomes for the contracting authority. Not only does this assist local communities and economies, it also ensures contracting authorities’ statutory compliance, reinforces their ESG, and facilitates future business cases and funding bids. This is our chance for public contracts to play a more strategic role in solving the social challenges of our time – let’s make it work.

Brendan Gallagher, Social Value Manager, AtkinsRéalis.
T: 074 4246 3319
E: Brendan.Gallagher@atkinsrealis.com
W: www.atkinsrealis.com