When times are tough, organisations with a social purpose have to focus on what really matters. Jeremy Nicholls shows how to champion social value through procurement

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.

There are a lot of good reasons why organisations struggle with increasing the social value they create and lots of reasons why organisations don’t change if they don’t have to.

However, despite progress, all too often key decisions about resources and policies are made using a limited economic concept of value, where the effects on people and the environment are not fully considered. As the gap between rich and poor increases and the effects of climate change become more apparent, making it as easy and relevant as possible for social value to be taken into account has never been more urgent.

Organisations that invest to create social value, make it a strategic priority and work to influence the behaviour of others can have a huge impact.

Social Value UK works with members to help them measure, manage and increase the social value they create, using the Principles of Social Value, and provides training in social value, for example to members of Procurement for Housing (PfH). As a national member network of Social Value International, it’s creating an international movement for change.

Social purpose runs to the heart of local authorities, social enterprises and social landlords. They are well placed to manage their social value and have the necessary reach to make a difference. But they are operating in a climate of massive cuts that has led to many vital services being reduced or removed entirely.

In the social housing world it’s much the same story. The 1% rent reduction has removed millions of potential income, meaning organisations have had to reduce services, reconsider development opportunities and halt or significantly cut community programmes. Austerity has bitten hard into many deprived communities served by social housing organisations at a time when they’re most needed, especially when many council services have been cut. Socially beneficial services have either gone or been put at risk.

The drive for new houses is understandable and much needed when we have a national housing crisis. But in communities facing in-work poverty and fuel, furniture and food poverty, the capacity of social landlords to help has been restricted in many cases.

However, there are plenty of examples of those that have responded to these pressures by reasserting their social mission. In fact, more and more housing associations are classifying themselves as social enterprises, or looking to develop their own social enterprises.

One of the most effective ways to become champions of social value is via procurement and commissioning. As major purchasers of goods and services, councils and housing associations have clout in the market – whether it’s individually or by working collaboratively, such as through consortiums like PfH which last year generated £53m of savings for the social housing sector to reinvest and has an emphasis on using SME suppliers.

The Social Value Act has upped the ante on what’s expected of suppliers but it’s up to them to set out the level of social value they expect from contracts and manage them to ensure outcomes are delivered.

Social Value UK recently published a case study with Watford Borough Council, which has used commissioning to encourage culture change across the council supply chain. It asks for the usual requirements such as using a local workforce and general support of charities and environmental policies, but also pushes for more innovative systems to create social value. For example, a construction company has created a multi-faith peace garden to aid community cohesion as part of a development.

Another example is the Trafford Housing Trust, which redesigned its procurement processes to ensure social value is embedded throughout the supply chain. By developing a better understanding of local needs by working closely with businesses the Trust is able to maximise the impact of its work and its social value advisor, Tom Wilde, was among the winners at this year’s Social Value Awards.
The social enterprise Furniture Resource Centre (FRC) provides a double whammy of social value. Its End Furniture Poverty campaigning team lobbies social landlords to provide furnished tenancies to rent to low income tenants who cannot afford to buy furniture and helps them set up programmes. Once a landlord decides to establish a furnished tenancy programme and requires furniture, FRC tenders to be the supplier and in doing so creates a further layer of social value. It uses the contracts to supply furniture as vehicles to recruit and train long-term unemployed people onto a fully salaried training programme that gets them into sustainable employment.

We need more organisations to champion social value so if you have other examples of how this is happening, Social Value UK would love to hear about them. Please get in touch with Christina Moorcroft at christina.moorcroft@socialvalueuk.org.

Jeremy Nicholls is chief executive of Social Value UK – www.socialvalueuk.organd Social Value International and a trustee of Furniture Resource Centre.

This article first appeared in the print edition of Local Government News on 8 June 2017.