Shifting social value to the procurement start line

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In the past, family fun days were the social value staple of some housing associations. But six years on from the Social Value Act, things are changing. Lawyer Andrew Millross explores how landlords can use procurement to make a meaningful difference to the communities in which they work.

 

Short-term ‘social value’ initiatives that offer little wide-ranging impact for tenants and come with hidden costs for landlords are, thankfully, becoming less common.

 

The sector is also wiser to the fact that social value must be linked to a contractor’s area of work. Unless your maintenance company also hires out bouncy castles, then a family fun day shouldn’t form part of their tender.

 

Housing providers are also more alive to the fact that they always pay for social value somewhere in the contract. Transparency is important; providers need to know how much they are paying for their social value outputs so they can check they are good value for money.

 

A classic “own goal” is asking a supplier to allocate a proportion of the contract price to “social value activities”. This just increases the contract price (on which the provider pays VAT), and also means that the contractor chooses where to spend the money rather than the provider being able to.

 

So, six years after the Public Services (Social Value) Act was first introduced, what other lessons have been learnt about how to secure lasting social value through procurement?

 

Identify what you want to achieve

Surprisingly, many housing associations don’t begin the procurement process with this important social value question. They should ask it right at the start of the process, when scoping what they want to buy. Instead, they ask their contractor what community benefits they can deliver, rather than thinking about what they, as the client, want to get in terms of a social value. This type of approach doesn’t even comply with the Social Value Act.

 

Some providers may want to create apprenticeships, work placement opportunities or develop school links. Others might want to get their contractors to host DIY training seminars, build a new playground or paint a community centre. These are all familiar outputs, but it’s worth considering a wide range of options. You might want to get more tenants from black and minority ethnic groups into maintenance careers, promote the use of electric vehicles or encourage your contractors to donate surplus materials to community groups.

 

Use good practice guides

Don’t reinvent the wheel when it comes to how you embed social value into contracting processes.  At Anthony Collins Solicitors LLP, we have supported the ‘Tradeswomen into Maintenance’ project by writing a free legal guide for social landlords, ALMOs and local authorities that want to address gender imbalances in the construction trades workforce through their procurement activity.

 

The Tradeswomen into Maintenance Legal Guide explains relevant equality and procurement legislation (including the Social Value Act) and sets out the steps clients can take to promote the creation of opportunities for women in maintenance careers. It includes template clauses for each stage of the procurement and contracting process which could also be used if your housing association wants to help other underrepresented groups into maintenance jobs.

 

The guide can be freely used and it is one of a number of good practice guides which aim to support landlords and other businesses working in the social housing and public sector to increase the number of women working in construction trades. Other guides can be accessed on the Mears website.

 

Invest in enforcement

A supplier promising to deliver social value at tender stage is one thing, but ensuring they deliver on this promise is another.

 

This means that good contract management is crucial to making sure suppliers deliver on their social value promises. The ‘let and forget’ culture that still prevails amongst many landlords makes this difficult as some still see contract management as a back-end process. Procurement teams must change this, setting out how a supplier will be managed from the start – right from when a tender is first being pulled together. They also need to make sure the right resources and processes are in place to manage the contract effectively.

 

The Social Value Act requires housing providers to consider, at the outset of each procurement process for services, what social value (if any) they want to secure. But putting community value at the heart of procurement in a meaningful, enduring way is not easy. Hopefully these pointers can help social landlords design their procurement and contracting process to generate real change in the communities they work in.

 

Andrew Millross is a Partner at Anthony Collins Solicitors LLP, a leading procurement and construction lawyer, and an active member of the Procurement Lawyers’ Association.

Procuring Social Value

It’s taken many years for social value to become a mainstream issue. No longer on the fringes, it’s now being embraced across the public, private and third sectors, albeit to varying degrees.