Last week, HM Government announced a new model of social value for use in the awarding of central government contracts. We’ve condensed the policy into this handy factsheet so you can prepare your organisation to take advantage of the opportunities this change provides.
What is it?
On the 24th September 2020, the Cabinet Office published a new Procurement Policy Note issuing new guidance on how social value is considered in central government procurement and commissioning.
Called “Taking Account of Social Value in the Award of Central Government Contracts”, the note states that, “social value should be explicitly evaluated in all central government procurement”, and outlines some new recommendations and requirements.
The government spends around £49bn of tax payers money each year on contracts for vital public services. The social value policy and its associated legal framework (see The Public Services (Social Value) Act 2012) ensure that public money is spent in ways which benefit society, not just private enterprise.
What has changed?
There are two major changes that this policy note introduces.
The first is that social value will now be “explicitly evaluated in all central government procurement”, whereas previously social value was only “considered”.
Secondly, whereas social value had previously been defined in terms of price, the new policy note takes into account a broader range of social goods, such as the local job creation, apprenticeships, etc.
This broadening of the definition of social value means that a wider variety of organisations, regardless of their size, now have a more level playing field to compete for government contracts.
What does the new model contain?
The new model sets out five high-level themes, and eight policy outcomes that organisations bidding for central government contracts will be required to demonstrate.
The themes and their associated outcomes are:
Help local communities to manage and recover from the impact of COVID-19
Tackling economic inequality
Create new businesses, new jobs and new skills
Increase supply chain resilience and capacity
Fighting climate change
Effective stewardship of the environment
Reduce the disability employment gap
Tackle workforce inequality
Improve health and wellbeing
Improve community integration
When does it come into force?
The new measures will come into effect on 1st January 2021.
What do these changes mean for VCSE’s?
A minimum weighting of 10% of the total score for social value will be applied in the procurement process for central government contracts from January 1st 2020. This means that social value can now be a deciding factor in who gets awarded
This is a good thing for VCSE organisations however, as the new, broader definition of social value means organisations that may not have had the capacity to demonstrate economic social impacts can now use their track record of helping people and communities to strengthen their bids and compete more equitably with larger organisations.
What should I do?
Familiarise yourself with the new social value model
Read the policy note
This is great news for organisations and communities. Making the social value policy more robust means more public money being reinvested into communities, while broadening the definition of social value opens up the world of central government procurement to a wider variety of SMEs, VCSE organisations and beyond.
Check back regularly
The government have yet to publish the detailed guidance that will provide “standard award criteria, delivery objectives that describe ‘what good looks like’, and metrics for contract management and reporting”.
We’ll published another summary when that guidance arrives, so check the Capacity blog regularly for updates.