A good buy: commissioning for social value

By on 01/11/2021 | Updated on 09/11/2021

When commissioning goods or services from the private sector, civil servants have an opportunity to secure wider public goals. At a recent webinar hosted by WT Partnership, experts from both sides of the fence explored how to get the broadest possible benefits from suppliers – and explained the importance of a major change to procurement rules

For many years, civil service procurement was straightforwardly about buying goods and services at the lowest possible price. But these days, government commercial professionals are often expected to use purchasing to generate wider social value. In the context of society’s numerous challenges – the COVID-19 recovery, tackling climate change and addressing inequality, to name just a few – government departments and agencies have a prime opportunity to drive meaningful change, tackling a range of social goals through the demands they make of their suppliers.

Dean Smith, Joint Managing Director, WT Partnership

Enlightened suppliers are showing ever more understanding of this aspect of working with government. As Dean Smith, joint managing director of property consultancy WT Partnership, said in a recent webinar hosted by the company: “You’ve always got to be looking for continuous improvement. Because the world is changing, needs are changing, and we have to respond to the society that we work for.”

Smith explained that companies are on a journey – seeking to be responsible partners, and to help in improving local economies and societies. But there is, he acknowledged, a long way to go: “If you look at the industry that we work in, predominantly property and construction, it’s fair to say that that is probably one of the least diverse, least inclusive, most profit-driven, and probably largest environmental impact sectors we have in the country.” WT Partnership, he added, is eager to help push the agenda forward: “We need to realise that we’re at the beginning of something here – something that needs to coalesce, because there are a lot of real challenges that we need to address.”

The webinar brought together five experts from both the commissioning and contracting sides of the aisle, focusing on how best to generate social value through public procurement. The panellists began by giving some insights into how procurement activities can best generate social value.

Working in Partnership

Kirsty Bargh, Quantity Surveyor, WT Partnership

Kirsty Bargh, a corporate social responsibility champion at WT Partnership, outlined how the company has been seeking to set an example as a responsible supplier through a range of measures aimed at nurturing the health and wellbeing of staff, creating new job opportunities in the communities where the company works, and supporting those communities in other ways such as charity work. “We believe these are some of the things you could reasonably expect from your supply chain,” she said. “As a medium-sized surveying practice providing services to the public sector, this forms part of our wider ESG [environmental, social and governance] approach.”

David Mann, Partner, Tuffin Ferraby Taylor LLP

Also representing the property industry, David Mann, a partner at consulting firm Tuffin Feraby Taylor, commented on how his industry has generally had a poor track record in earning public trust on issues such as diversity – being traditionally viewed as the preserve of white, wealthy, heterosexual males. As an openly gay member of his industry, Mann said his frustration at the property sector’s attitudes towards diversity prompted him in 2011 to found Freehold, a support network for LGBT property professionals.

Since then, Mann said, the industry has made significant steps forward in improving the diversity of its workforce, but fully addressing the issue is “going to be a bit like turning around an oil tanker”. As an important partner industry to government and the public sector, he said, it’s important that the property industry reflects the views of wider society in areas such as workforce diversity. “I’d very much like to encourage the public sector, as part of your procurement procedures, to improve us and judge us on this,” Mann said.

New rules

Snowia Hussain, Social Value Lead, Commercial and Contract, Management Directorate, Ministry of Justice

Meanwhile, Snowia Hussain, social value lead for commercial and contract in the Ministry of Justice’s Management Directorate, described how since the beginning of 2021, central government departments have been guided in enshrining social value in procurement through Procurement Policy Note (PPN) 06/20.

“One of the challenges previously for government departments and for suppliers getting into government departments was that each department was setting its own social value priorities,” Hussain explained. “So, some of the thinking behind PPN 06/20 was around building a cohesive model that would be applicable across all government departments, in a very systematic way.”

In PPN06/20, social value falls under five themes – COVID-19 recovery, tackling economic inequality, fighting climate change, equal opportunities and wellbeing – and Hussain explained that suppliers are now required to set out explicitly how they will deliver on some or all of these objectives. This goes beyond previous requirements under the Social Value Act, which only required suppliers to “consider” how they could create social value. “So there are a few key differences between where the Social Value Act was, and what departments are being expected to deliver,” Hussain said. “I think they’re really positive steps forward.”

Lulu Tucker, Strategy and Planning Project Manager, Leeds Teaching Hospitals, NHS Trust, UK

Looking at how social value can be driven through procurement at a local level, Lulu Tucker, a strategy and planning product manager for Leeds Teaching Hospitals NHS Trust (LTHT), gave an account of Building the Leeds Way: a long-term programme to transform the trust’s healthcare facilities across the city. Through the initiative, Tucker said, the trust is seeking – as a key “anchor institution” in the city – to use its procurement clout to tackle a raft of wider social objectives.

“We want to predominantly focus on training, skills and employment, as these are some of the major challenges facing our most deprived communities,” Tucker said. “And we want to scale the impact of this work by making sure that we can coordinate and align all our suppliers, so that we can make as much a difference as possible.”

Monitoring and reporting

The panellists were pressed on what civil servants could reasonably expect of suppliers, both in terms of delivering social value, and in the monitoring and reporting required to demonstrate that they’re meeting their social value targets.

As a first step, said Hussain, social value objectives should be part of an ongoing discussion between client and suppliers. “It should be a two-way discussion talking about what progress you’re making on social value: have you identified any wins? Are there any challenges? Is there anything that we can do as the client to help unblock, provide advice, provide support?”

Beyond this informal approach, Hussain said, client bodies generally hold suppliers to account on their contractual social value obligations using written reports. In her role, Hussain has often used simple delivery plans setting out what a supplier has agreed to deliver and the timescales involved. “For me, that’s very much handing over to a supplier to say: ‘You want to do these apprenticeships, for example, so tell us: Who do you want to work with when delivering that? Do you need support from us? What are your timescales? How do you plan to evidence that’s being delivered?’”

In Leeds, commented Tucker, in order to ensure consistency in reporting across the various suppliers, the trust has opted to monitor delivery of social value using the National Social Value Measurement Framework: a standardised way of measuring social value outcomes. “This enables us to have a monetary quantification of our social value, which is really important for us reporting back to our board and our other suppliers,” Tucker said.

Employee input

The panellists were asked to consider how they thought employees could contribute to formulating the social priorities of an organisation – coming up with ideas, and then ‘owning’ those values in their day-to-day work.

David Mann said his company used an employee survey to inform its ESG policy – identifying, for example, charities the organisation should support ­– and installed a suggestion box in the office to overcome shyness among employees in coming forward with ideas.

At WT Partnership, commented Smith, a new employee forum was launched – partly to resolve the problem that communication between management and staff had become “one-way” during the pandemic. Enabling staff to contribute ideas on topics such as social value and business priorities, the forum is about “giving them that voice and that opportunity to push back the other way, so it’s not always dictats that are coming from the top of the organisation,” Smith said.

Additionally, staff have at least one objective embedded in their personal development goals relating to environmental, social and governance issues. This can take numerous forms, Smith said, such as mentoring another member of staff, charity days or helping out in the wider community. “The point is, we are looking at actively promoting for everyone in the business to get involved in that way,” he added.

From a commissioning perspective, the MoJ’s Hussain said the five themes enshrined in PPN06/20 are gradually becoming embedded within routine procurement practices but will take time to percolate throughout government’s buying operations. “These are themes that are still being rolled out and embedded, and there is an understanding, but I think there’s much more work to be done, quite honestly.”

Lip service

The panellists considered the question of whether there’s a danger of social value becoming a talking point: something to which lip service is paid, but on which little action is taken.

Among suppliers, said Mann, the level of commitment varies from organisation to organisation. In his experience of establishing Freehold and speaking to senior executives on workforce diversity issues, he said, “very quickly [you] get a view as to whether it’s genuine or whether it’s lip service – from probably within the first half an hour of speaking to them”.

In Hussain’s view, suppliers can sometimes view social value objectives as a “tick box” exercise; it can be a challenge to ensure that they’re engaged “with hearts and minds”. As well as monitoring their delivery against contractual obligations, she said, there’s a case for public bodies to go a “step further” and engage with the parties supposedly benefiting from the social value aspects of a contract. “If possible, can you speak to the recipients of that and see how it’s affecting them, how it’s benefiting them?”

In conclusion, Smith said the public sector has a key role to play in driving better standards in the private sector, saying: “Your customers are expecting more from you, and so now you’ve got to do something about it”.

“The first step is recognising that something needs to be done,” Smith added. “I think we’re getting to a point that we’re over that now. And genuinely, I think we have people who are looking to head in the right direction, and that needs to be nurtured.”

This webinar was hosted by WT Partnership on 14 October, with support from Global Government Forum. You can watch the 75-minute event via GGF’s dedicated event page.

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