Strategic Sourcing: new approaches to deliver success Social Value & Value For Money Julian Blake, Head Charity & Social Enterprise and Education Group Bates Wells Braithwaite London LLP [email protected]020 7551 7746 (Direct) www.bwbllp.com Malcolm Williamson, Director of Enterprise Inspire2Enterprise CIC [email protected]01707 398029 (Direct) www.inspire2enterprise.org 4 th February 2014
Social value and value for money? Julian Blake, Partner, Bates Wells Braithwaite Malcolm Williamson, Head of Enterprise Support Services, Inspire2Enterprise
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Strategic Sourcing: new approaches to deliver successSocial Value & Value For Money
Julian Blake, Head Charity & Social Enterprise and Education Group
• BWB - charity/social enterprise specialists; universities - public authorities (for procurement)/charitable social enterprises.
• New emphasis on SV: UK Public Services (Social Value) Act 2012; EU Public Procurement Directive 2014, to be implemented in UK in 2014
• But SV already (underused) within UK Best Value regime and current Public Procurement Regulations
• Public authorities may commission on the basis of price; but appropriately only for undifferentiated goods
• May commission for optimum balance of price, quality and SV -“most economically advantageous tender”
• Must consider (under the 2012 Act); how a procurement “might improve economic, social and environmental well-being” [of relevant area]
Potential meaning of Social Value
• Dismissed as meaningless; not subject to straightforward measurement (like price/ quality); meaning may be recognised
• Added social deliverables may be provided within service; see EU 2010 publication “Buying Social: A Guide to Taking Account of Social Considerations in Public Procurement” e.g. employment opportunities; social inclusion; equal accessibility; ethical trade; environmental best practice.
• Purpose driven (efficient/cost-effective) suppliers may deliver further benefit e.g. by hypothecating retained profit to similar purposes, rather than to shareholder distribution;
• Such suppliers may offer open book/shared profit arrangements, rather than seek to maximise own profit.
• Commissioners may compile lists of SV objectives; consider the potential each procurement has in relation to each objective; request SV in specifications; invite creative SV offers
• Longer term cost saving may be factored into purchasing, with payments linked to impact results; or the value of impacts (including to other public services), may be given weight.
Practical meaning of Social Value
• Promotion of SV is stimulus to smart thinking by commissioners/suppliers and proactive use of procurement; in environment where process can tend to obscure purpose.
• Direct application to public services (e.g. education delivery), where public benefit and SV are central; also applicable to general service procurement.
• Linked to impact measurement/assessment methodologies; considered in - Measuring Social Impact in Social Enterprise: The state of thought and practice in the UK” – Baker Tilly/CAN Invest/Big Society Capital 27/2/13, published by E3M - www.socialbusinessint.com
• Similar to approaches to: programme impact assessment; social investment; payment by results contracts; and social impact bonds, as promoted by Government.
• EU Social Business Initiative promotes SV (including through procurement reform) to reinvigorate social economy; similar ideas part of Government’s “Big Society” ideas.
• A university is public benefit organisation with procurement power that may leverage SV benefits.
• This may extend to collaboration, particularly as community organisation, with SV delivery to other educational institutions and wider public benefit.
• SV meaningful with application/planning/consultation; what does the university and/or its students and/or its community need? how may applying SV assist in meeting such need?
• Examples: employment opportunities for students; research opportunities; collaborative linkage to university-based enterprises/social enterprises; collaborative profit share; sustainability in university estate.
Application to Universities continued
• SV opens perspective on: social enterprise; benefits that can be delivered by social enterprises (as universities are); and opportunities/benefits from alignment of public benefit purposes (see MW’s following comments on SE).
• Application to SV can also require more of private sector suppliers by obliging them to compete on SV as well as price and quality.
Further Information
• BWB’s “The Social Value Act Quick Guide” with Unity Trust Bank published by Pioneers Post - [email protected]
• BWB’s “Bold Commissioning & Procurement for Best and Social Value” workshops/ seminars in association with: University of Northampton; E3M member social enterprises; and I2E – [email protected]
• An example: “Knowsley Metropolitan Borough Council Procurement Strategy 2012-14” – www.knowsley.gov.uk/pdf/procurement-strategy-2012-2014.pdf