What is social value and why does it matter?

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The latest regulations mean that before launching the bidding process, commissioners must try to ensure that the services should secure greater benefits for the stakeholders and local area

Regulations introduced in 2013 have made it increasingly important for organisations working with the public sector to demonstrate that their activities provide a wider economic, social and environmental benefit.

Under the Public Services (Social Value) Act commissioners must consider social value rather than just monetary value when awarding contracts. 

Its seven principles of social value are:

  • Involve stakeholders
  • Understand what changes
  • Value the things that matter
  • Only include what is material 
  • Don’t overclaim
  • Be transparent
  • Verify the result

Before launching the bidding process, commissioners now consider whether the services and how they are acquired could secure greater benefits for their local area or stakeholders. 

The broader decision-making scope allows authorities to hold more meaningful discussions between local market providers and communities. This collaborative approach often generates better services and more innovative outcomes.

Case study: 

Markel Care recently helped a Scottish social enterprise develop a social value strategy that received widespread recognition for its positive impact on the community. 

The not-for-profit advocacy, which partners with third sector organisations to promote social inclusion, contacted the consultancy to find out how an increased focus on social value could give its work more clarity and meaning.

The organisation also wanted to use the Markel Care benchmarking tool to gauge how its understanding compared with peers across the UK.

After completing a detailed questionnaire with the consultancy, the chief executive realised that there was a "mismatch of understanding" about the purpose of social value at the organisation.

The consultancy used the findings to create an action plan for the advocacy based around the seven principles of social value. 

During the process, the chief executive discovered that the organisation had been ignoring some of its key stakeholders.

This prompted the organisation to prioritise two of the central principles that the Scottish Government uses in its decision making process: ‘involve stakeholders’ and ‘understanding what changes’.

"The self-assessment tool is not only very effective and simple to use, but it also gave my board a new way to look at the aims and objectives of our organisation that we may not have been able to see on our own," said the chief executive.

The shift in focus allowed the board to better understand how to secure contracts under the new regulations.

"The action plan that the Markel Care team produced for us around involving stakeholders meant we could identify and prioritise the key people who we support," the CEO said.  "This has made a huge difference."

Towards the end of their work together, Markel Care helped the advocacy showcase its latest social value achievements.

Over a series of two-hour workshops the organisation told over 80 stakeholders and groups how it had built stronger relationships with people in the local community by introducing initiatives that reduced vandalism and lowered the police presence in the area.



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