A year has passed since the first lockdown, and describing 2020 as a year of change has almost become a cliché, though that doesn’t make it any less true. The pace of change looks set to continue well into 2021, with the government’s roadmap and budget announcements at the top of many people’s thoughts.
However, the last 12 months have also brought another focus; how central government departments spend money, and how they can make their money go further. This topic was brought to the attention of many in November 2020, when the National Audit Office released their investigation into the emergency procurement of PPE at the beginning of the pandemic. The public interest around this story showed how important the issue of spending public money really is, and it is this broader context that set the scene in January 2021 for the biggest policy change in social value and procurement for almost 10 years with the arrival of the Social Value Model.
What is the Social Value Model?
The Social Value Model (SVM), has been brought in to standardise the way that social value is considered in public procurement decisions. Since the Social Value Act of 2012, governmental agencies have been obliged to ‘consider’ social value in procurement decisions, but for central government procurement, the SVM goes one step further. According to the procurement policy note 06/20, 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”.
Why is the SVM important?
This shift marks a big opportunity. The procurement covered by this model amounts to an estimated £49 billion, and use of the SVM carries with it the obligation to score at least 10% based on the social value section of a tender. Whether a charity offering employment and training opportunities, a company that engages with the local community in a constructive way, or a business conscious of its carbon footprint, the inclusion of the SVM in central government procurement decisions means that creating social value will bring an advantage to any organisation when bidding for central government contracts.
How does the SVM work?
The easiest way to understand the SVM is to refer to the SVM quick reference table.
You can see that there are five different themes: COVID-19 recovery, tackling economic inequality, fighting climate change, equal opportunity and wellbeing. Within each of these themes there are a number of policy outcomes. For example, listed under the theme of wellbeing, are the policy outcomes ‘improve health and wellbeing’ and ‘improve community integration’.
Under each of these headings there is a range of bullet points including model evaluation questions and model award criteria. This 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.
The pandemic and the past year have been a real life exercise in thinking and doing things differently. The introduction of the SVM shows that this is here to stay.
If you’re an organisation that’s interested in increasing the social value you create, whether that’s to increase chances of success at a procurement level or just because you want to be a more responsible business, there are a few good places to start:
Please contact Helen directly if you would like to discuss this in more detail.