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05.11.18

Social value in Greater Manchester: lessons learned

Source: PSE Oct/Nov 2018

Peter Schofield, Greater Manchester Combined Authority (GMCA) collaborative procurement programme manager, looks back at the region’s history of adopting social value policy and outlines what lessons his team has learned as a result.

Procurement was identified by the New Local Government Network’s Jessica Studdert in March 2018 as the sexiest profession in local government on the basis that, as local government adapts to reduced resources but increased demand, procurement has to recognise that it has a role as a future key driver of change and social impact.

I have worked at the GMCA since 2012 and I disagree – although only with respect to recognising how important our future role is. I think we already do!

It seems to me that procurement professionals in GMCA already have a good understanding of their role in change and societal impact. There is, however, still a lot of work to be done with budget-holders and commissioners so that they “get it.”

When the Social Value Act was implemented in early 2013, the heads of procurement within Greater Manchester were underwhelmed: “is that it?” was the resounding response, because the act said social value should a) only be “considered,” and b) applied only to contracts for services valued above the EU threshold.

The view was that the principles should apply to all contracts; indeed, some elder statesmen pointed out this basic principle was already contained in Local Government Act (1999), which included a requirement to test how procurement contributes towards the organisation’s strategic objectives – across all services.

In response, the GMCA adopted a GM Social Value Policy in 2014, which focused on how social value can contribute towards the objectives set out in our bid for devolution – ‘Stronger Together,’ published in 2009.

Since 2014, tenders have been evaluated on the basis of a blend of price/quality and social value, and tenderers are required to articulate how they will:

  • Promote employment and economic sustainability;
  • Raise living standards of residents;
  • Promote participation and citizen engagement;
  • Build the capacity and sustainability of the VCSE sector through practical support for local voluntary and community groups;
  • Provide support for those in greatest need or facing the greatest disadvantage and tackle deprivation;
  • Promote environmental sustainability.

Weightings applied to social value vary from 5-20%. Although there is some debate about exactly what the weighting should be, we have found that whilst a weighting of 20% will not provide four times as much social value as a 5% weighting, it is likely that the higher weighting will increase the likelihood of appointing a supplier that is serious about social value.

As the GMCA policy has been in place for nearly four years, and the Greater Manchester Strategy has been refreshed to reflect devolution and the inclusion of health and social care, it is time to update our approach.

As a member of the Greater Manchester Social Value Network – established in January 2015 to influence stakeholders, policy and strategy to ensure that the behaviour of business, the devolution agenda, commissioning and procurement, or the delivery of projects and services bring maximum social value – I have access to a wide range of individual activists and organisations that are keen to further the cause of social value.

Here are a few of the lessons I have learned in Greater Manchester – most of which will apply more widely:

  • Suppliers have provided social value in some form for many years but haven’t seen it as that;
  • With experience gained, we can become more prescriptive about the social value ‘ask’ within contracts;
  • Social value has to be considered as a part of pre-procurement by budget-holders and commissioners in consultation with all stakeholders. Although it is delivered through procurement, is not something that procurement does in isolation;
  • A consistent approach to measurement is needed if we are to understand the power of social value. Case studies provide anecdotal evidence, but hard evidence is required if we are to make the case for new approaches, taking risks and developing new ways to deliver services;
  • We need to make sure that the social value negotiated into a contract actually gets delivered – contract management is a neglected art that requires understanding and investment. There is a cost to doing it, but the costs of not doing it are far greater;
  • Social value should be a key consideration in all service design.

The EU procurement directives have long been derided as an inflexible set of rules that stifle innovation and inhibit creativity. This isn’t the case anymore (if it ever was), and the 2015 rules actually encourage more dialogue with suppliers and the use of negotiation and consultation to drive new ways of delivering services. We just need to be brave enough (or is it scared enough?) to do it.

As a member of the LGA’s National Advisory Group, I contributed to a report, ‘Encouraging innovation in Local Government Procurement,’ which advocates rethinking procurement along the lines of publishing a notice stating: “This is the problem, this is how much we have to spend – what can you do?” Devolution in Greater Manchester provides a unique opportunity for a multi-agency approach for genuine co-production design and delivery of services.

The supply chain also needs to get in on the act, and there is some evidence of that happening. Greater Manchester public sector procurement is around £7bn per annum compared to our GVA of around £60bn, so we need to lead the way and work with businesses around the region to persuade them to adopt similar approaches.

The results could then be massive…

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