Social value during market development
Market engagement
Market engagement allows thorough research of potential providers in the market for each particular contract. It is important to make social value needs explicit. This point presents a prime opportunity to introduce the Social Value Policy, TOMs and principles and support the market’s preparation for submission by discussing ideas and options, as well as giving providers an opportunity to raise questions. Early market engagement and communication with potential suppliers also allows time for providers to consider the probability of achieving aspirational benefits.
At this stage commissioners not only account for the large organisations but also Small and Medium Enterprises (SME’s) and Voluntary and Community Sector (VCS) businesses too. Market engagement can take place at planned prospective bidder days, where the initial project plan; spend; specification; key legal conditions and other concerns can be discussed.
Soft market testing
Soft Market Testing (SMT) is a two-way dialogue wherein a proposed commissioning and procurement approach is assessed by the market prior to procurement commencing. It should take place early in the development of proposals and provides an opportunity to both gauge interest from the marketplace and gain insight into how providers may deliver a service.
SMT involves gathering information and knowledge in the following key areas:
- feasibility: whether what is sought is actually feasible, or has ever been done
- capability: the ability of the market (whether through a single provider or a consortium) to achieve what is required
- maturity: whether there is an established market for the requirement, and whether there are enough providers in existence for a competitive procurement
- capacity: whether the market can achieve what is required quickly enough, or on a large enough scale, and
- risk: the risks involved for both the market and the council. Similarly, feasibility and capability around social value commitments need to be tested at this point
Commissioners need to consider whether the market demonstrates social value principles.
The table below indicates positive practice in this area:
Example of positive practice against Social Value principles
- Social value activities are based on a Local Needs Analysis and delivered collaboratively, with stakeholders
- Social value outcomes and targets are included in their own contracts and contract management
- Align rewards and incentives to their own contractors with delivery of social value outcomes
- Employment opportunities are provided for local unemployed & disadvantaged people
- Support for local community projects is provided (e.g., labour, materials, up-skilling)
- Initiatives to improve staff well-being are implemented
- A target spend with local SMEs is set
- Adopt Ethical Trade Initiative Base Code
- Commit to consistent monitoring and reporting against Sustainable Development Goals (SDGs).
- Measurement and reporting of financial and non-financial social value outcomes is undertaken
- If already reporting against TOMS framework, provide a separate report to collect data on social value delivered that was not captured in TOMs
- Programmes to actively support SMEs, Social Enterprises and third sector to win work are established
- Engage with partners to identify creative and innovative approaches to social value
- Authentic and transparent communication of the social value benefits being delivered is undertaken
- Third party verification/auditing of social value results is undertaken
- Conduct ‘hyper-local’ research and engagement
- Dedicated social value resource to manage and deliver the outcomes
- Report on performance and analyse results with an approved framework, performance manages and analyses data
QA
Q How can I engage and involve providers?
A The development and delivery of commissioning strategies and plans should be as open and transparent as possible and designed to build and maintain good long-term relationships with providers.
This could include:
- A commitment to working in partnership with a broad range of stakeholders, including provider organisations
- Recognising that many providers are experts in their service area and involving them in the design of services
- Recognising the added value that some providers can bring – for example, resources, volunteers, local knowledge
- Informing providers of future commissioning activity through a Commissioning Intentions Plan
- Developing and delivering a Market Development Plan to ensure that an appropriate level of skills, expertise and capacity is available throughout the market – via activities such as capacity building workshops and drop-in sessions
Q Is the way in which a contract is packaged important?
A The way in which you package a contract will have a direct bearing on the providers that apply. For instance, aggregating related services together may make sense if we are trying to achieve economies of scale. This will, however, be likely to disadvantage smaller contractors who may be attuned to local needs and be better equipped to provide social value. Question the merits of large contracts: • Can they be broken down into geographic packages? • Who will be in the best position to deliver better ’Whole life’ benefits and satisfy end users as a result of social value? The contract length should also be justified by the investment requirement and procurement costs.
Q What are my duties around co-production and engagement?
A Co-production and engagement should be built into all stages of the commissioning process, from the initial assessment through to specification design, tender evaluation and service review.
This could include:
- focus groups with service providers to find out what is working well and what is not
- informal and semi-structured interviews with service users
- appreciative workshops with a specific target group – for example, young people, to get a picture of their needs and wants
- people who are expected to benefit from the service being involved in interviewing and selecting providers
- users of the new service reviewing the performance of providers through a variety of methods such as mystery shopping or as peer researchers