The social value model explained: Guidance, summary and more

25 February 2024 / Insight posted in Article

The Social Value Model came into force off the back of the Covid-19 pandemic and all the changes that it brought. But the years since have shown that it’s here to stay.

In this article, we’ll tell you everything you need to know about the Social Value Model – from what it is and why it’s important to key themes and what it means for your business.

We’ll also show how we at Moore Kingston Smith can help your business understand social value and how to benefit from it.

What is the social value model?

The Social Value Model is a framework that UK public bodies use to evaluate how the businesses they award procurement contracts to affect society.

The Social Value Model builds on the Public Services (Social Value) Act that came into force on 31 January 2013. As of the 1st of January 2021, all public bodies had to use the Social Value Model when making decisions relating to procurement.

According to official Cabinet Office Social Value Model guidance, social value ‘should be explicitly evaluated in all central government procurement, where the requirements are related and proportionate to the subject-matter of the contract.’

We’ll get into the specifics of the Social Value Model below.

In general, it focuses on measuring and maximising the positive impacts a business creates for society. It considers a range of evaluation criteria to assess this – such as impact on the environment, treatment of staff, effects on local communities, and more.

While the two concepts are not identical, it has a lot in common with assessments of a business’s ESG impacts, with ESG standing for environmental, social, and governance.

Why is the social value model important?

The total value of the procurement activity covered by the Social Value Model runs to the hundreds of billions, and represents a sizable chunk of UK GDP.

Ensuring that all this money is spent on businesses that do not harm the environment or mistreat their workers has the potential to make serious positive changes for society.

It also creates major opportunities for businesses across a range of sectors.

What does the social value model mean for your business?

The inclusion of the Social Value Model in central government procurement decisions means businesses that hit the evaluation criteria and demonstrate they create social value can have a major competitive advantage.

Put simply: if your business competes for government contracts, you need to make social value a core part of your operations.

Understanding and improving the ways your business interacts with the environment and society can also bring opportunities including:

  • Enhanced reputation
  • Better community relationships
  • Improved employee engagement and retention
  • Long-term sustainability

You may also find that improving on social value creates other benefits in areas like employee satisfaction or even increased productivity.

Social value model summary

The Social Value Model is large and detailed: it contains five themes, eight outcomes, and 27 criteria or questions.

The best way to understand it in detail is to use the government’s Social Value Model quick reference table.

Here, though, we’ll cover some of the basics and what they might mean for your business.

Key themes and aims

The five themes of the social value model are:

  1. Covid-19 recovery
  2. Tackling economic inequality
  3. Fighting climate change
  4. Equal opportunity
  5. Wellbeing

Each of these themes has associated policy outcomes that help explain the themes and set clear targets. These range from the general (‘help local communities to manage and recover from the impact of Covid-19’, under theme 1) to the more specific (‘reduce the disability employment gap’, under theme 4).

Each of these headings also has a range of bullet points including model evaluation questions and model award criteria. The Social Value Model quick reference table could be a valuable reference table even if you are not considering any central government tender opportunities, as it provides useful ideas and inspiration for activities which will create social value in your organisation and for the community around you.

The SVM also contains a number of references to pre-existing government initiatives which aim to improve the conduct of organisations in all sorts of ways, such as the Good Work Plan and the Disability Confident employer scheme. The fact that the SVM ties into these other areas means that a more pragmatic and holistic view can be adopted of how an organisation can create social value.

Social value model guidance: How Moore Kingston Smith can help

The most important thing to keep in mind when considering how your business should consider social value is understanding: you need to know how your business impacts people and the planet.

What effects do your activities have? And what measures

Public bodies want to see that your business knows and understands the importance of social value. Just ticking the evaluation criteria isn’t enough: you need to demonstrate that you understand the underlying issue.

While tenders don’t tend to prioritise Covid-19 recovery in the same way that they did in 2021, for example, it’s worth being aware of the ongoing impact of the pandemic and how it affects your workers and the people you do business with – whether that’s staff members dealing with long Covid or children behind on education after intermittent lockdowns.

At Moore Kingston Smith, we’re here to help you understand and embed social value at every step of your operations. Get in touch with our Nonprofit advisory team to start the conversation around the Social Value Model and what it can mean for you. Whether it’s implementing a social value policy, exploring ways to increase your organisation’s social value, or investigating how to measure your social value, we’ve got you covered.

And if you want to consider social value from an HR perspective, please contact our People Advisory team.

We hope this guide to the Social Value Model is helpful. Understanding social value is crucial to businesses navigating the procurement landscape. And getting it right can provide serious benefits, helping you not only gain a competitive edge, but improve your impact on society. To learn more about the Social Value Model and how you can use it to thrive, contact us today.

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