This presentation looks at commissioning for social value: an interim report produced for the Children’s Partnership in March 2014. For more information on commissioning for social value: http://blogs.ncvo.org.uk/2014/04/07/top-tips-on-commissioning-for-social-value/

1. Commissioning for social valueAn interim report produced for the Children’s Partnership in March 2014
Photo courtesy of ewan_m via www.flickr.com

2. Contents
Introduction
What is social value?
What is the Social Value Act 2012?
Challenges to implementing the Social Value Act
Case Study 1 – Knowsley Council
Case Study 3 - Durham County Council
Case Study 3 – Lambeth Borough Council
Lessons learnt so far
Resources and further information

3. Introduction
The Coalition Government’s Open Public Services agenda aims to improve public services, by supporting
innovation and greater diversity of provision. Achieving this vision will require significant change in the
way public services are commissioned.
The Public Services (Social Value) Act 2012 is one tool to help improve commissioning. Introducing his
Act, Conservative MP Chris White, commented that “The aim of the Act is to support community groups,
voluntary organisations and social enterprises to win more public sector contracts.”
The Act gives commissioners a green light to consider the additional community benefits that could be
achieved, when commissioning a public service. This might mean thinking about what type of jobs or
volunteering opportunities could be created, how the community will be involved, or whether the
service in question could be delivered in a more sustainable way. Whatever the specifics, the idea is for
commissioners to get the maximum value-for- money when commissioning services.
The Act is also timely as the Government’s ongoing deficit reduction plans necessitate doing more with
less. Yet too often, social value has been overlooked. Indeed some local authorities say they are simply
looking for the cheapest bids, whatever the service in question. This is a false economy. To get high
quality public services, commissioners should always consider three factors: quality, price and social
value. This is the only way to get a true picture of value-for-money.
Continued on next slide…

4. Introduction
Continued from previous slide…
Since the passage of the Act in 2012, we are encouraged to see many local authorities taking a more
active interest in commissioning for social value. This report documents the steps that three councils
have taken to develop their social value strategies. In some respects, these councils are leading the way,
but they would also agree that they have learnt many lessons and still have further to go. It is hoped that
sharing their experiences will usefully inform others who are considering how to commission for social
value.
The report case studies are based on telephone interviews carried out in March 2014. NCVO plans to
conduct interviews with a wider range of councils and will publish a full report later this year.

5. What is social value?
• Social value is about recognising additional social, economic or environmental benefits.
• It goes beyond looking at the cost of a given contract, to looking at what additional benefits could
be achieved with the spend available.
• If £100k is spent on a service, social value asks ‘could that £100k be spent in such a way that it
secures additional benefits for the community?’
• For example, when York Council wanted to commission a café for their offices, they consulted with
the community and included various social value criteria in their service specification. The contract
was won by United Response, a charity, which has provided training and employment
opportunities for adults with learning disabilities through the café.
• Another example is Blue Sky Development, a social enterprise that employs ex-offenders to deliver
grounds maintenance and recycling contracts. By reducing re-offending rates and creating
employment for people who face barriers to work, the organisation creates added social value.
• In cases such as these, social value can also contribute to savings for the public sector.

6. What is the Social Value Act 2012?
• The Social Value Act was implemented into UK law in January 2013.
• It requires public bodies, including local authorities, to consider how the procurement of a service
can improve the economic, social and environmental well-being of an area.
• Social value must be considered at the “pre-procurement” stage i.e. before a service is tendered
for. (See next slide)
• Through consultation, the authority should determine any social value considerations and design
its procurement materials to enable social value to be considered during the decision-making
process.
• If a potential service provider then offers added social value, above and beyond the contract
specification, it should be possible for the authority to take these added benefits into account.
• Chris White MP, author of the Act: “The aim of the Act is to support community groups, voluntary
organisations and social enterprises to win more public sector contracts and to change
commissioning structures so that a wider definition of value rather than just financial cost is
considered.”

7. Consider Social Value

8. Challenges to implementing the Social Value Act
• A lack of understanding about the advantages of commissioning for social value and how it can
contribute to long-term savings and help tackle wider social, environmental and economic
objectives. Importantly, social value should help public bodies to secure better value for money.
• A disconnect between commissioning and procurement teams. Commissioners can sometimes
find their proposals to incorporate social value blocked by risk-averse procurement teams
misinterpreting procurement law or looking to make shorter-term savings. More training and
strong local leadership is required to establish social value as a priority.
• There are few mechanisms to support or monitor the implementation of the Social Value Act. No
training was provided to help implement the Act and there is no data available about how it is
being used. This makes it difficult to assess implementation and to spread good practice. NCVO is
encouraging Government to invest more in training and best practice toolkits.
• The Social Value Act only technically applies to contracts above EU procurement thresholds. This
means public bodies are not obliged to follow the act for procurements under £173k. These
thresholds are set to increase to £600k in 2014. NCVO recommends that – as our case study
councils have done – the spirit of the Act should inform public procurement below threshold as
well as above.

9. Case Study 1 – Knowsley Council (1)
Background
• Knowsley Council co-designed their social value strategy with representatives from the voluntary,
public and private sectors.
• The strategy fitted with their co-operative principles and policy of growing the social sector
(already in place before the Social Value Act).
• Knowsley were looking to reduce demand on public services, by making communities more
resilient. Social value is seen as a key way of driving the Council’s “social growth” priority.
• The Council has taken their social value strategy through the Knowsley Partnership which includes
their key partners - each of whom have made a commitment to a joint social value approach.

10. Case Study 1 – Knowsley Council (2)
Delivering social value outcomes
• Knowsley Council are setting out social value criteria in all service contracts covered by the Social
Value Act, and by using core and added social value are aiming to give a 10-20% weighting in the
final assessment of bids.
• So far, as part of an on-going initial evaluation, Knowsley Council has identified at least 16 contracts
in which social value has been used in the tendering process.
• They have tendered contracts using social value in areas of, domiciliary care worth £8m, young
carers worth £50k, sexual health worth £2.9m, substance misuse worth £5.3m and smoking
cessation worth £1.6m.
Organisations that are delivering social value include:
• Forward Together (Knowsley’s social sector consortia) who have included social value as part of
tender submissions;
• Activate Arts who are committed to delivering social value as part of a lease agreement for an old
school site;
• First Ark (Knowsley Housing Trust) who have a social audit annually and share this with partners.

11. Case Study 1 – Knowsley Council (3)
Strengths of Knowsley’s approach:
• Key Council members were involved in Knowsley’s scrutiny committee, which reviewed the
Council’s policies on commissioning and social value.
• Having “social growth” as a key policy driver has enabled social value to spread to wider parts of
the Council beyond the procurement process.
• With clear definitions, outcomes and measures, the Council are able to reflect social value clearly
in their contract specifications and tender evaluation forms.
• The social value model was designed alongside voluntary organisations, enabling them to better
understand social value and how to demonstrate it.
• Workshops were arranged for the voluntary sector to help them better understand social value and
how this factors into the procurement process.
• Where the Council looks at transferring assets to community organisations, they link the offer of a
peppercorn rent to delivery of social value.

12. Case Study 2 - Durham County Council (1)
Background
• Since becoming a unitary council in 2009, Durham County Council has focussed on sustainable
commissioning and procurement.
• With the Social Value Act becoming law in 2013, the Council already had procedures in place to
procure with social value in mind.
• In 2013, a social value taskforce was set up - chaired by the Council - with representation from the
voluntary sector, local Chamber of Commerce and Federation of Small Businesses.
• The Council extended their policy to include contracts outside of public services, such a goods
contracts and work contracts.
• Durham have set out clear statements of policy to do business with organisations that that could
demonstrate positive approaches to environmental, social and economic outcomes.
• The Council acts as a hub to other organisations in offering out its procurement services, for
example to local bodies such as parish councils and academy schools.

13. Case Study 2 - Durham County Council (2)
Delivering social value outcomes
Of a total of 79 invitations to tender (ITTs) above £50,000 since April 2013:
• 44 included social value weighting in terms of social, environmental or local economic
sustainability.
• Of these, 11 related to recruitment and training commitments and 33 incorporated other
social, environmental or local economic added value outcomes.
Examples of contracts incorporating social value
• A framework-based agreement with three contractors to undertake a programme of
capital works to the housing stock included social value objectives such as training,
education, employment opportunities, waste reduction and recycling.
• Framework Tender for Timber Framed Buildings which included economic and social
sustainability objectives in terms of training, education and employment opportunities.

14. Case Study 2 - Durham County Council (3)
Strengths of Durham’s approach:
• The council engaged with local charities and social enterprises for feedback about the Council’s
process, which informed the approach the Council has taken.
• Strong political leadership has been key to advancement of Durham’s social value agenda and
enthusiasm from technical officers has enabled practical enforcement.
• Durham County Council tries to structure its procurement process to ask for outcomes that can be
directly and specifically measured. For instance, requiring a specific economic impact or a certain
number of people are engaged with. In this way, it has been able to evaluate and measure the
impact social value has had in the area.
• The Council regularly runs supplier engagement workshops that give advice on engaging with the
Council in procurement and how to write bids.
• These workshops also act a sounding board for the Council, giving them an understanding of the
barriers organisations might face in bidding for contracts and what the Council can do to make the
process easier.
• They have taken specific steps looking at removing barriers to bidding for lower contracts for
voluntary organisations including making sure that any financial requirements are not too onerous
and that large contracts are split into smaller lots.

15. Case Study 3 – Lambeth Borough Council (1)
Background
• In 2012 Lambeth entered into a broad consultation with local residents, voluntary sector groups
and partners on the basis that the current model of service provision was not sustainable within
the context of cuts to local government funding.
• What followed was the establishment of a co-operative commission that brought together national
organisations, politicians, and regional and local groups to share their thoughts on what a co-
operative model of local government should look like. This set out a framework for Lambeth’s
current model.
• Lambeth’s approach was not solely led by the need to rethink service delivery but was part of a
wider agenda about what the public sector should look like in the 21st century.
• Lambeth have dissolved their service departments and replaced them with three business clusters:
an ‘enabling cluster’ which supports such areas as HR, finance, and property; a ‘delivery cluster’
which covers such services as education, housing, social services and parks; and a ‘commissioning
cluster’ - a partnership arrangement which includes funding an organisation ‘Lambeth Forum
Network’ to act as co-commissioners with the Council.
• The Council’s work is guided three broad imperatives: clean streets and a greener neighbourhood;
more jobs and sustainable growth; and communities feeling safer and stronger.

16. Case Study 3 – Lambeth Borough Council (2)
Delivering social value outcomes
• Lambeth’s co-operative approach to commissioning has been embraced by all public bodies in the area.
• Lambeth do not feel constrained by financial thresholds when seeking to build social value outcomes in to
the commissioning process.
• The Council provide support to their local voluntary sector to help them demonstrate their social value.
Programmes incorporating social value
• Community hubs will provide safe spaces for residents, community groups, social enterprises and SMEs
from which they can operate and deliver services. They will provide a home where community growth,
community action, volunteering and enterprise will flourish.
• By 2016, Lambeth Council plans for its parks, commons and open spaces to be transformed from a
traditional service model into one that embraces co-operative ambitions and behaviours. Community
pioneers will be at the heart of driving change which will lead to greater financial security for parks; create
new opportunities for employment and education; and improved health and wellbeing.
• Remodelling of the library service will include an opportunity for staff to consider a mutual model.
Successful delivery of the plan is expected to generate £11.5m of capital receipts for reinvestment over
the next four years, whilst securing, or investing up to £18m of assets into the community hub
programme.

17. Case Study 3 – Lambeth Borough Council (3)
Strengths of Lambeth’s approach:
• Strong political leadership has kept the momentum going and enabled a focus on values rather
than process, even when this hasn’t made life easy for some technical officers.
• Local councillors were involved in every stage of the planning process, as were the community and
service users. The new constitution that resulted gave more powers to cabinet members who now
have direct commissioning responsibilities and who have to sign off contracts over a certain size,
bringing a democratic dimension to Lambeth’s commissioning process.
• Lambeth’s strategy has been to build on an existing strong and diverse social market of small and
creative enterprises, community groups, charities resident-led forum and social enterprise. This is
seen as an essential step towards commissioning deep rooted social value outcomes. As Lambeth’s
cooperative commissioning model develops further they see no reason why more technical areas,
which may be seen as outside the realms of traditional commissioning could not be considered
where councils are traditionally more risk averse.
• To communicate their idea of what social value is, Lambeth are currently developing a handbook
aimed at overcoming some of the barriers - such as the language often used by technical officers -
preventing greater cooperation within communities and the organisations that serve them.
• Over the years the council have also used ‘officer secondments’ into the voluntary sector to help
build a better understanding of what the council requires in its procurement process.
• Central to their approach is the belief that ‘contract compliance’ should not be something to ‘hit
suppliers over the head with’ and that technical officers, providers and users can work together in
a triangular relationship to evaluate and improve the commissioning process.

18. Lessons learnt so far – local authorities
• Strong political leadership and ‘buy in’ from elected members is essential for any transformation of local
commissioning processes.
• Councils should involve the community and service users in designing their approach and identifying local
social value priorities – launching an open dialogue and holding regular meetings with the voluntary
sector can help to secure this engagement.
• Particular effort should be made to retain staff who are core to the transformation of the commissioning
culture. Constant flux in personnel is often cited as a major barrier to improving commissioning.
• Providing support to SMEs and the voluntary sector to help them navigate and compete in the
commissioning process will help to deliver social value outcomes.
• Taking time to get things right is important. Councils need to make sure they get their communications
clear and avoid mixed messages. For example, as one council highlighted to us, even the word
‘commissioning’ will often have no resonance with local residents and needs to be clearly explained.
• There is a widespread but mistaken assumption that seeking social value outcomes runs the risk of legal
challenge. The Social Value Act is already part of UK law and states that public bodies are required to
consider social value for contracts above EU thresholds. The Cabinet Office has also issued guidance to
this effect. New EU procurement directives, scheduled for 2014, will explicitly permit the inclusion of
social and environmental criteria in the procurement process through a ‘most economically advantageous
tender’ provision.

19. Lessons learnt so far – central government
• Ministers should champion and support implementation of the Social Value Act, as part of their
overall commitment to improving commissioning and achieving better value for public money.
• There are 100s of local authorities and thousands of councillors across England who could benefit
from sharing of best practice about how to improve commissioning and incorporate social value.
There should be a specific effort to reach out to elected members.
• Building on the Commissioning Academy, high quality training should be provided, particularly for
procurement officers, to enable effective implementation of the Social Value Act. This should
include identification of barriers facing voluntary sector and SMEs.
• There remains a widespread concern that EU procurement rules prohibit the consideration of
social value during procurement. This is not the case – as the Social Value Act, Cabinet Office
guidance, and new EU directives make clear. Clear messaging on this point from central
government will help to build confidence among commissioners – particularly when the new EU
procurement reforms take effect later in 2014.
• Central government should monitor implementation of the Social Value Act, in order to identify
best practice and provide challenge to areas that need to make further progress.

20. Lessons learnt so far – voluntary organisations
• The responsibility to advance any social value agenda does not rest solely with the public sector.
Voluntary organisations have to embrace change and adopt a collaborative mind-set towards
working with local authorities.
• Voluntary organisations should be helping to make the case for social value. Start by familiarising
yourself with current Council priorities, and talking to elected members and local authority staff
about how commissioning for social value could help to achieve these priorities and better value
for money.
• Where there is the opportunity to engage in strategic discussions, or specific commissioning
processes, voluntary organisations should embrace these opportunities and help to facilitate the
involvement of their service users and local community.
• Voluntary organisations that want to strengthen their position in bidding for contracts, should
consider what added social value they bring and how to communicate this. In some cases, using a
tool such as the Cabinet Office’s Unit Costs Database can provide evidence to support your case.

21. Resources and further information
Durham County Council’s Procurement policy and strategy
http://www.durham.gov.uk/pages/Service.aspx?ServiceId=829
Knowsley: An Emerging Approach to Social Value http://www.knowsley.gov.uk/pdf/social-value-model.pdf
Lambeth Council's Responsible procurement guide http://www.lambeth.gov.uk/business-services-rates-and-
licensing/selling-services/responsible-procurement-guide
Public Services (Social Value) Act 2012: 1 year on: https://www.gov.uk/government/publications/public-services-social-
value-act-2012-1-year-on
Cabinet Office unit costs database: http://data.gov.uk/sib_knowledge_box/toolkit
Compact Voice, Social value and the implications for local Compacts:
http://www.compactvoice.org.uk/sites/default/files/social_value_briefing.pdf
Third Sector Commissioning Guide. NCVO and Voluntary Action Norfolk.
http://www.voluntarynorfolk.org.uk/data/comm_and_proc/Comm_and_Proc_checklist.pdf
The Public Services (Social Value) Act 2012: http://www.legislation.gov.uk/ukpga/2012/3/enacted
NCVO’s Open Public Services: Experiences of the Voluntary Sector report provides case studies on: commissioning,
supply-chain management, sharing information, managing scale, new forms of finance, and managing risk
http://www.ncvo.vol.org.uk/sites/default/files/open_public_services_experiences_from_the_voluntary_sector.pdf