From aspiration into reality: How public sector organisations can navigate social value

Public sector procurement has long centred around lowering costs with the taxpayer in mind. However, particularly in the wake of a pandemic and an ever-intensifying climate crisis, there is a prevalent recognition of the limitations of a singular focus on financial returns – a concept captured by earlier legislative changes such as the Social Value Act of 2013, which mandated public sector organisations to consider how their procurements could deliver wider social, economic, and environmental benefits.

We are seeing social value in action, and the benefit this brings, in central and local governments. A 2022 report by the Local Government Association shows that local government organisations across the UK are using the social value model and frameworks in their supplier selection process to incentivise social value-driving contracts; some also have roles and structures in place to monitor suppliers’ progress and hold them to account. 

However, levels of progress vary. Translating this concept of “social value” into tangible impact still presents a challenge for many public sector organisations, and the path to social value creation is littered with pitfalls. Indeed, the 2013 Act has often resulted in "tick-box" exercises with minimal impact. Fast forward to 2023, the Procurement Act and PPN 06/20 added impetus by introducing a mandatory 10% minimum weighting for social value in government contracts. This, coupled with the Cabinet Office’s Social Value Model, provides a much clearer framework for measuring and incorporating social value gains into contract evaluations – but, from working with a wide array of public sector procurement teams, we see that how to turn this into impactful action remains unclear to many organisations. So, how can they turn social value aspirations into reality?

Navigating common social value pitfalls

Based on their extensive experience working with public sector clients, Efficio’s consultants have identified some common pitfalls that organisations encounter when approaching social value:

• Lack of clarity: Confusing social value with philanthropy or corporate social responsibility (CSR) dilutes its essence. Organisations must articulate a clear definition of social value that aligns with their core strategy, and this should cascade down into Procurement’s goals and operations.
• Misdirected efforts: However well-intentioned, initiatives that lack strategic focus can turn into mere box-ticking exercises with minimal impact. Social value goals should be aligned with organisational strengths and stakeholder needs – focus on what you are good at to deliver the biggest impact.
• No measurement: Without evaluation mechanisms, the impact of social value efforts remains shrouded in guesswork. Procurement teams must establish comprehensive measurement frameworks to track progress (for example, via contract management). This also informs future actions.
• Disconnected stakeholders: Failing to involve stakeholders such as employees and local communities can mean alienating potential collaborators and reducing ownership of social value goals. All stakeholders must understand their own role in an organisation’s social value journey in order to deliver results.

A roadmap to social value success

Below is a high-level roadmap for public sector organisations seeking to navigate the social value landscape and avoid such pitfalls. Procurement teams are key to turning social value strategies into reality, and so engaging Procurement at the right stages is an important part of the social value journey.

1. Define: Articulate what social value means for your organisation, how it aligns with your mission and values, and how procurement can support these objectives.
2. Identify: Prioritise areas where your specific capabilities and circumstances can create maximum social impact.
3. Plan: Develop a concrete plan with measurable goals and time-bound actions. Make sure to involve your supply chain at this stage to allow for early opportunity identification and preparation.
4. Measure and report: Track your progress through robust metrics and transparently communicate your social value journey.
5. Develop and engage: Continuously improve your commitments, keeping stakeholders involved and leveraging their expertise to amplify impact.

Social value: No longer a nice to have

In an era of rising stakeholder expectations and tightening regulations, social value is no longer an optional add-on, but a strategic imperative. And yet organisations often trip up: some miss the mark due to a lack of clarity, while others charge ahead with lofty promises only to stumble when to comes to delivery, measurement, and reporting. Delivering on effective social value strategies will require active stakeholder involvement, a strong understanding of aims, and an ability to track progress.

Crucially, it will be an iterative process, making it all the more important to put your shoulder to the wheel now.

How we can help 

At Efficio, we have extensive experience working closely with public sector organisations to create social value, supporting them in building strategies and implementing processes to measure social value. Please get in touch via our public sector service page to find out more about how our procurement and supply chain consultants can help you navigate the changing social value landscape, upskill procurement teams, avoid common pitfalls, and unlock the full potential of your social impact activities.