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Viva La Social – How The Social Value Act Is Revolutionising Public Sector Procurement

Friday March 18th, 2016

By Daniel Bridgewater, Director, Hero Communications

A child lost his parents and ended up in foster care. He didn’t have a suitcase, so his life was stuffed into a ripped bin bag as he made his way to his new ‘home’. His life. In a bin bag.

This happens every day across the country. light_8016790Sml

One council had had enough of seeing this. Their Adoptions and Fostering team went to their Procurement team and asked whether their corporate service providers could do anything about it.

This council convinced the corporate to get their staff to donate suitcases AND find somewhere to store them in their offices. All because of the Public Sector (Social Value) Act 2012.

This is a true story.

This solution emphasises how – with a bit of creative thinking and a ‘what if’mentality – the SVA can solve some of society’s biggest (and littlest) of problems.

(Okay, okay, I know this is quite a morbid start to a blog. I usually keep them quite light and funny but their are real stories out there – ways in which the SVA is truly impacting the world around us. This is one of them.)

But what is the SVA? It’s simple: for a private sector organisation to get a public sector contract, they now have to demonstrate social value. The good ones are actively creating it.

I genuinely think it’s revolutionary. It has the potential to do so much if approached in the right way.

I say ‘Viva La Social!’

Here are three reasons why I think it’s revolutionising public sector procurement.

 

SVA Makes Doing ‘Something Good’ a Rational Decision

Doing ‘something good’has always been a nice thing for corporates. That, or a cheap marketing ploy.

Now don’t get me wrong, there is a rational benefit from CSR and many organisations take advantage of this. Banks supporting small businesses so their staff learn how to offer genuine customer and business advice, engineering firms running programmes in schools to develop their talent pipeline etc, SOME have taken advantage of the opportunities of CSR.

But the SVA makes the benefit as clear as day. ‘If you create social value, you will get points on the mark scheme increasing your chances of winning the contract’.

Or ‘do something good to get your hands on this public money’. Simple.

I love this because it is making social value/good a transactional, rational, logical decision – something we all know corporates understand.

 

Businesswoman viewing the contract before signing

It’s Giving Smaller Social Enterprises Better Chances of Winning Public Sector Contracts

Secondly, SVA gives smaller socially-driven organisations a better chance of winning contracts.

Up until now, value-for-money has been the biggest factor in the procurement decision making process. It’s been the only factor. And yes, it will still be the most important thing.

But social enterprises, which are usually a lot smaller and can’t win based on value-for-money alone, now can gain a competitive advantage. With councils such as Knowsley giving up to 20% of the mark scheme to social value, social enterprises have the opportunity to smash a large chunk of the mark scheme.

But don’t take my word for it. In the London Borough of Waltham Forest the social enterprise HCT Group won a transport contract to deliver Special Educational Needs (SEN) transport and Adult Social Services transport. The reason stated why they won was because they promised to reinvest all profits into a learning centre that would provide training to long-term unemployed people in the borough (you can read more about this here )

Profits into supporting the unemployed vs profits into the pockets of shareholders. When it comes to public money, it’s a bit of a no-brainer.

It has the potential to give these smaller organisations a competitive advantage because they live and breath social value! And we’re extremely excited about this possibility.

 

It’s Getting the Public More in Return for their Taxeshands jigsaw 2124574Med

Finally, the SVA is helping the public get more for their hard earned taxes.

Cuts are rife and austerity is in play, but corporates are still generating record profits.

Now obviously we’re pro-business, but it’s good to see the public and their representative bodies getting more bang for their buck.

If we can get profits reinvested into training centres, unused vehicles being offered to charities, staff being asked to give unwanted clothes to the homeless, free training opportunities for our young people, a living wage etc etc etc, then this will clearly create benefit for the public.

Whether this is direct or spillover it’s still going to provide great benefit to the public.

Conclusion

The Public Sector (Social Value) Act 2012 has potential to do something revolutionary. But it all depends on whether the corporates and the public sector bodies do something revolutionary in response. A few are.

Some are just copying and pasting from their outdated CSR policy or including a few half-decent case studies to show what they believe to be social value creation. But they need to be doing more.

Some, like the ones working with us at Hero, are going into the communities, doing their research, forming relationships with the right people and promising to do genuine and meaningful things that solve problems.

Viva La Social! These are the revolutionaries. Are you?

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