Why measure social value?

Outlining your processes for measuring social value and community benefits commitments is a crucial part of the tender process.

With social value comprising up to 20% of the bid evaluation process for some tender submissions, a strong social value commitment can mean the difference between a winning and losing bid.

Why does measuring social value and community benefits matter?

It is not enough to simply pledge against initiatives or commitments – suppliers must also demonstrate they can monitor, measure and report social value and/or community benefits commitments.

Measuring social value will make it easier to produce subsequent reports to the contracting authority, demonstrating progress against commitments. Remember, social value commitments will often form a contractual KPI – failure to meet commitments could result in being removed from the contract or framework agreements.

The Procurement Act 2023 has introduced stronger measures for penalising underperforming suppliers – including mandatory annual reports on KPI performance and a new supplier debarment list. Consequently, it is more crucial than ever to have strong mechanisms for measuring social value.

Social value and community benefits – what is the difference?

Social value

First introduced in 2012 by the Public Services (Social Value) Act 2012, social value requires contracting authorities to ‘have regard to economic, social and environmental wellbeing in connection with public services contracts.’ PPN 06/20 mandated that all central government contracts must apply a minimum 10% weighting to the evaluation criteria, organised around the following themes:

• COVID-19 recovery: helping communities to manage and recover from the impact of COVID-19
• Tackling economic inequality: creating new businesses, jobs and skills and increasing supply chain resilience/capacity
• Fighting climate change: demonstrating effective stewardship of the environment
• Equal opportunity: reducing the disability employment gap and tackling workforce inequality.
• Wellbeing: improving health and wellbeing amongst the contract workforce, and improving community integration.

Although it is not a statutory requirement, social value remains hugely popular with local authorities – including councils, NHS trusts and local housing associations. Incorporating social value within the tender procedure effectively introduces a ‘value for money’ option, in addition to ensuring the local community benefits from contract award.

Community benefits

In contrast, community benefits is the model employed by Scottish local authorities, governed by the Procurement Reform (Scotland) Act 2014. All contracts with a value exceeding £4 million must include community benefits as part of the tender process – however, many authorities choose to include it as part of lower value contracts. The main themes within community benefits are:

• Training and recruitment, developing the skills of the workforce and providing long-term, sustainable employment
• Availability of subcontracting opportunities, allowing local organisations to be integrated within the supply chain
• Other areas which improve the economic, environmental and social wellbeing of the authority’s local area.

Ultimately, both models focus on how suppliers (and purchasing organisations) can generate and deliver additional value outside of the contract scope – ensuring the wider community and local area benefits directly from the contract being awarded.

How to effectively measure social value

Lastly, authorities will expect suppliers to measure their own social value returns – this is occasionally referred to as Social Return on Investment (SROI). This ensures you will be able to provide buyers with evidence of delivery against commitments.

Ensure you are measuring the right data

Different social value commitments will require different measurements – for example, in-kind contributions and volunteering is normally logged by hours, and environmental commitments may be in weight or percentages.

Determine how your commitments will be measured in advance, then ensure this is logged in a central database – with one individual responsible for measuring, recording and monitoring commitments.

Measure targets against a framework

Social value tools such as the Social Value Portal’s TOMs calculator aid buyers and suppliers alike in measuring and calculating social value impact. Other contracting authorities, including local councils, may use their own social value calculator or spreadsheet, typically assigning a proxy value (usually monetary) against each measure.

Measuring targets against a calculator or other framework will ensure your commitments are quantifiable, and facilitates easy comparison when presenting progress reports internally and to contracting authorities.

Implement regular reporting of measurements

Content and frequency of reports should be agreed with the contracting authority as part of pre-start mobilisation meetings. This will ensure transparency and accountability in measuring social value and community benefits commitments. Reports could include:

• Stakeholder testimonials from social value activities, such as feedback from work placements or apprenticeships
• Photographic evidence of social value being delivered, including volunteer activity or donations to food banks
• Invoices to demonstrate the value of donations, ensuring monetary contributions are independently verifiable.

Social value reporting can easily be integrated into monthly contract meetings, or even quarterly strategic reviews – ensuring the authority are aware of your social value activities.

Support with social value in bid and tender submissions

We have supported hundreds of clients with thousands of tender submissions via our bid writing services, in addition to:

• Bid review services involving a comprehensive review of your social value or community benefits response, with comments and minor edits aimed at enhancing and improving the response
• Social value in tendering training, where your subject matter experts will receive dedicated training aimed at producing targeted, impactful social value responses.

If you would like to discuss how we can support with measuring social value and community benefits, contact us today at info@executivecompass.co.uk or 0800 612 5563.