Social Value Toolkit

Resources

Council resources will always be limited by available budget either in capital terms or revenue terms. Options appraisals to support recommendations about the allocation of resources needs to demonstrate that the broad social value benefits are assessed is essential. Articulating the benefits and social value can help build support for the allocation of resources. Commissioners should evidence in their options appraisal and business case that social value has been thoroughly considered to make sure that the money spent by the council will bring benefits to and for local people. Commissioners should be willing to explore a broad range of radically different alternative solutions that might offer greater social value at the options selection stage. The considerations set out below are intended to stimulate creative thought processes.

Targeting

Commissioners should consider targeting resources at those people in need, services that are a priority and at the right stage to have maximum effect on outcomes based on population needs assessments. There may be eligibility thresholds to be considered which may influence the decision making process, i.e., needing to target a particular cohort would mean less capacity for the wider community.

Optimising resources

Commissioners should consider optimising resources – including money, community and user resource, assets. This could mean redesigning internal or external workforce to deliver a service or return for the end user; optimising public buildings in an area to collectively create best value for the community; or building community resilience or skills.

Choosing the right mechanism

Commissioners should determine the right mechanism to best achieve the desired outcomes i.e., traditional approaches including procurement, grants, service level agreements, performance management to a focus on pooling budgets (i.e., Section 75), market management, partnership building, enhancing choice, harnessing voluntary and community resources and capacity, influencing partner spend and users’ decisions and behaviours.

Delivery Options

Commissioners and procurers can use their spending power to ensure social value can be directed towards micro, small and medium-sized businesses and encourage business development through, for example, managing support programmes for microbusinesses which benefit the local economy. Micro, small, medium-sized businesses, and sole traders are 15 diverse in nature, they can be run by those representing the needs of different communities providing insight into the fabric of places.

Definition:

• Micro = <10 employees
• Small = <50
• Medium = <250 employees

Partnering the Public Sector and the Voluntary Community Sector (VCS)

The Rotherham Compact is a framework for partnership working recognises the contribution, the VCS can make to improving the lives of individuals and communities. Forming partnerships with local charities, community groups and businesses who may have a better understanding of the needs and solutions, is a good way to identify opportunities for action. The Rotherham Compact sets out how the public sector and the VCS can get the most out of partnership working by meeting their respective commitments. Procurement approaches may be limited to mutuals/co-operatives.

Collaborative commissioning and procurement

Collaborative commissioning and procurement between local authorities to achieve commissioning outcomes at scale may achieve efficiencies in terms of cost and effort and attract new resources through a partnership agreement with a supplier or range of suppliers.

Outcomes-based commissioning

Outcomes-based commissioning not only involves a focus on outcomes rather than outputs but also the use of a population approach, metrics and learning, payments and incentives, and co-ordinated delivery across providers; it places a greater focus on the strategic and planning elements of commissioning, leading to changes in the commissioning cycle as well as engagement of service users and providers https://www.local.gov.uk/icbo

Useful Techniques to support the Business Case

Developing a business case with commissioning and procurement partners will be required to create an investible proposition within the Council, subject to political ratification by the Cabinet where appropriate. The business case should contain the overarching objectives, the requirements, the wider financial and non-financial impact of the proposed interventions, including the wellbeing of individuals and communities, social capital and the environment and the net social and environmental benefits (and value) generated either as financial or non-financial (or both) performance. Officers should use the national themes, outputs, and measures (TOMs) in the business case to emphasise the social value potential to be achieved.

A range of analysis tools can be utilised to inform the development of the business case such as:

PESTEL analysis to examine the macro forces relevant to the project you are undertaking i.e.

• Political (e.g., government zero carbon target)
• Economic (e.g., number of jobs created)
• Social (e.g., social inclusivity of marginalised groups)
• Technical (e.g., donation of IT equipment to disadvantaged groups)
• Environmental (e.g., recycling IT equipment)
• Legal (e.g., meeting the duty under the Social Value Act 2012)

SWOT analysis to identify the Strengths and Weaknesses, possible Opportunities, and potential Threats to inform the strengths and opportunities to incorporate social value.

Strength

Economic Growth plan - effective partnership working with Rotherham Youth Enterprise, schools, and colleges to promote selfemployment and ensure that local people have the skills needed by business

Weakness

Basic skills, particularly in the long-term workless remain an issue for Rotherham, with 35% of people aged 16-64 having no qualifications or being qualified to below NVQ level 2

Opportunity

Rotherham Business Growth Programme - Link people to relevant job opportunities and providing them with the skills to carry them out. (Rotherham Metropolitan Borough Council -2015)

Threat

EU exit - 98% of care workers do not meet the pay thresholds to immigrate to the UK. (Skills for Care, 2021)

Assessing value for money

The latest Public Procurement Reform aims to take forward a change from the use of Most Economically Advantageous Tender (MEAT) to be replaced with Most Advantageous Tender to reinforce the message to contracting authorities that they can take a broader view of what can be included in the evaluation of a tender. Assessing value for money- (nao.org.uk).

The evaluation criteria for a procurement would be determined on a project by project basis, for contracts with a value of £100k> 20% of the evaluation criteria would represent social value. Commissioners can determine percentage weightings for the remaining criteria, and this may mean a high percentage is allocated to cost or quality.

An alternative approach (usually at the commissioning stage) is to try to move social value into the “Core” specification. So, for example, if the specification is to construct housing there will be social value in asking the contractor how they intend to ensure that they provide appropriate green spaces or play areas. We might also ask how the contractor would support the existing retail sector or how might the transport infrastructure be improved. The benefit of this approach is that social value outcomes can be driven by the commissioner with specific focus.

QA

Q How can we include Social Value in our commissioning plans?
A Consideration should be given to including social value in all stages of the commissioning cycle. This could include:

• identifying opportunities for creating / realising social value through the assessment of needs, resources and assets, stakeholder engagement and consultation, and market analysis/development
• embedding social value in strategies and commissioning plans, and
• incorporating social value into the procurement process – for example, tender specifications and question frameworks, and subsequent delivery and monitoring / evaluation

Q What is ‘relevant’ Social Value?
A Social value encompasses a broad menu of social, economic and environmental benefits. However, ‘relevant’ social value depends on the subject matter of the specification. Consideration should be given to how providers can deliver maximum benefit, not just in relation to the core, commissioned ‘service’ outcomes but also from the way that the service is planned and delivered in relation to the wider community.

Q What about a direct award where exemption from competition has been agreed? Do I still need to deliver Social Value via the contract?
A Yes, the policy is applicable to all direct awards.

Q What happens when contracts are joint i.e., when working with the NHS? How will Social Value play out?
A If the Council is the lead commissioner the full policy is applicable, if another authority adopts this role the policy should be encouraged and driven forward where possible.

Q How proportionate ae Social Value Outcomes in situations where a provider’s volume of delivery expands and contracts over time?
A The mechanics of complex contract models and expectations for social value will be designed on a project-by-project basis. The overall aim is to maximise the golden thread of social value through all contracts awarded. Organisations will be required to deliver commitments that are relevant and proportionate, and suppliers should be encouraged to maximise outcomes where they can.

Q Some commissioning methodology is undertaken on an individual basis e.g., when people choose their own care i.e., Direct Payments. How do we achieve agreed social value targets in these situations?
A At present the TOMS approach is only applicable to procurements inclusive of exemptions and direct awards, this may be expanded in the future to include other commissioning options such as grants.

Q Where do I get Social Value data and intelligence?
A Information and intelligence is critical to supporting the assessment process. This assessment should:

• Explore needs and assets to build a picture of what works and current strengths, in addition to what support is needed.
• Gain an understanding of the things that are important to our customers and communities
• Identify the social, economic and environmental outcomes you are looking to a deliver within the ‘service’ and for the wider community

Data and intelligence can be obtained from:

• National and locally available data sets
• Monitoring/evaluation information from existing delivery
• Consultation and engagement with current / potential service users, providers and wider stakeholders
• Market/gap analysis – assessing what is currently being delivered locally and any gaps in provision

And by using the resources indicated in this Commissioning Social Value Toolkit.

Q How will I have access to Local Needs analysis to target priorities for specific communities against Social Value TOMs?
A Using the resources indicated in this Commissioning Social Value Toolkit will support the identifying of needs and priorities.

Q I need to ensure I get the best possible price in my tender. How does Social Value enable this?
A Procurement teams have long recognised that lowest cost is not always a true representation of best value. Achieving value for money can be described as using public resources in a way that creates and maximises public value. The National Audit Office (NAO) uses three criteria to assess value for money of government spending i.e., the optimal use of resources to achieve the intended outcomes:

• Economy: minimising the cost of resources used or required (inputs) – spending less
• Efficiency: the relationship between the output from goods or services and the resources to produce them – spending well; and
• Effectiveness: the relationship between the intended and actual results of public spending (outcomes) – spending wisely

Q Do we need to ask social value questions at selection stage (i.e., in the selection questionnaire)?
A This will be developed on a project by project basis and will not be applicable to below threshold procurements and therefore will be considered as part of the Business Case.

Q How do we apply social value in framework-type arrangements (e.g., how do we impose social value obligations on operators who are members of the framework who might not hold any ‘call-off’ contracts where services are required from time to time)?
A The application of Social Value for framework type arrangements will be considered on a project-by-project basis. For frameworks established by the Council this will be determined as part of the Business Case. When utilising an existing framework that may have been set up by another Public Sector body or a Professional Buying Organisation, consideration of Social Value will need to take place in line with the guidance prescribed by the framework.

Q Does social value just apply to contracts over 100k?
A As highlighted within the body of this toolkit, the ambition of the Council is to increase the percentage of spend within the local area, this must be reflected throughout all commissioning activity as defined in the Council’s Financial and Procurement Procedure Rules. When undertaking quotation activity at least one must be sought from a local organisation, evidence records must be maintained when this is not possible.

Q How does social value apply to grants?
A Consideration should be given to the policy for all Council expenditure and where possible embedded as part of the resulting agreement.

Q How can social value be implemented across multi LA consortium frameworks, with some LA s that do not prioritise social value?
A This is a corporate priority for the Council and therefore should be prioritised when negotiating the key criteria when collaborating with other local authorities