social value: from procurement to co-production

Social value from the start Is anything stopping us procuring better services?

The spirit of the Act

Social value asks the question: 'If £1 is spent on the delivery of

services, can that same £1 be used to also produce a wider benefit to

the community?'

'The regulatory regime is not as inflexible from a commercial perspective as is commonly made out... More often that not, restrictions arise because those who interpret the rules in central government adopt

an overly restrictive approach...' (Evidence to all party parliamentary group on

outsourcing)

UK policy context How social value is becoming part of the conversation across government

2010 NAO and Audit Commission report on collaborative procurement

Potential:

Waste:

Muddle:

Value of procurement spend was £220bn in 2008/09

2,500 OJEU exercises could have been avoided by using framework agreements

'The public sector procurement landscape is fragmented, with no overall governance...'

2010 Modernising Commissioning green paper

Change:

Aspiration:

Challenge:

New roles for social enterprises, charities and public service mutuals

Intelligent savings, more responsive services

'The expenditure of public money does not always deliver optimum value...'

In "Our Programme for Government" the coalition government made a commitment to 'support the

creation and expansion of mutuals, co-operatives, charities and social enterprises, and enable these groups to have much greater involvement in the

running of public services.' (Modernising Commissioning green paper)

2011 Localism Act

Power:

Devolution:

Rights:

'General power of competence' allows local authorities to do anything that is within the power of an ordinary citizen

Community budgets should enable new, localised approaches to commissioning

New community rights include the right to bid to run public services - an opportunity to add social value?

2011 Treasury Green Book updated

Tools:

Benefits:

Holistic:

Annex 2 describes ways of valuing non-market goods, including time and environmental benefits

'Material costs and benefits that cannot be valued in monetary terms should clearly be taken into account...'

2012 guidance on accounting for environmental impacts introduces concept of 'total economic value'

'The full value of goods such as health, educational success, family and community stability, and

environmental assets cannot simply be inferred from market prices, but we should not neglect such

important social impacts in policy making.' (HM Treasury Green Book, annex 2)

2011 Open Public Services white paper

Taxonomy:

Principles:

Caveat:

Categorises services as individual, neighbourhood or commissioned services

White Paper sets out five guiding principles: choice, decentralisation, diversity, fairness, accountability

Although it claims funding will be targeted at the most disadvantaged, cost savings and 'productivity' are the overriding agendas

2011 Best Value statutory guidance

Social value:

Scrapped:

Duties:

'Councils should consider overall value – including social value – when considering service provision.'

Previous guidance is being scrapped, including 'Creating strong, safe and prosperous communities', duty to involve and duty to prepare a sustainable communities strategy

Summarised as 'economy, efficiency and effectiveness' - but social value and consultation are central

2012 Public Services (Social Value) Act

Imminent:

Limits:

Duties:

Act becomes law in January 2013

Covers English organisations (and some in Wales) but limited to services, not goods or works

Requires commissioners to 'consider' social value when specifying or tendering services

Conflicting signals

Do commissioners have the capacity?

Unskilled?

Unfamiliar?

Afraid?

'A lack of expertise is already harming the sector's ability to manage contracts' (All party parliamentary group on outsourcing)

Many procurement staff are relatively junior, and more familiar with accounting than with service design

'Commissioners don’t always have the skills - or the freedom - to work with VCS organisations to explore, identify needs and shape the market. They can be scared of giving out the wrong messages.' (Locality)

Do commissioners have the will?

Low priority:

Firefighting:

Risk averse:

2010: 57% of bassac members said commissioning was very or fairly ineffective

'Unfortunately most statutory duties are reactive, expensive, short-term and do not allow individual or community influence.' (Locality)

High profile legal challenges such as Virgin West Coast's against the Department for Transport may militate against innovation

Has social value been over-hyped?

Not magic:

Not equal:

Key issue:

There is no overriding legal duty that forces commissioners to specify social value outcomes in tenders if they don't want to

Social enterprises and voluntary organisations will still be disadvantaged compared with bigger and better resourced providers, who may be able to game the system

'This new legislation, like any other, will not solve anything without a culture change that comes from both commissioners and providers' (Local Government Information Unit)

Making it happen

Where there's a will, there's a way

Doncaster:

Liverpool:

N Ireland:

Five local development trusts have worked together to develop a common offer and approach to service providers

City council is looking to include measures of social value into procurement, including gap between providers' highest and lowest earners

Northern Ireland Housing Executive is considering reorganising its functions to enable it to contract with social enterprises

Advice for commissioners from Social Enterprise UK

Think:

Plan:

Measure:

Ask yourself what social value means to you, and to the community you serve

Develop a policy for commissioning for social value, and work out how this can be translated into tenders

Assign weightings to reflect social value priorities, and monitor performance accordingly

Advice for providers from Social Enterprise UK

Think:

Measure:

Check:

Ask yourself what social value you offer, and make sure service commissioners know about it

Put your own methods of measuring social value in place so you can demonstrate what you offer

Make sure you also offer value for money and can meet commissioners' other essential requirements

From contracting to co-production

Co-design:

Mutuality:

Involvement:

Community organisations working directly with service commissioners to design and develop services that involve their communities and meet their needs

'Find something that shows they can save money and they’re going to queue up. That’s what it’s all about at the moment.' - Routeways, Plymouth

Lambeth's 'co-operative council' model will involve citizens in drawing up service specifications

'Co-production means delivering public services in an equal and reciprocal relationship between professionals,

people using services, their families and their neighbours. Where activities are co-produced in this way, both services and neighbourhoods become far

more effective agents of change' (New Economics Foundation/ NESTA)

Three key questions to ask:

Coordinated:

Control:

Commission:

Are service design, procurement processes and local needs aligned?

Who holds the purse strings and what are their priorities?

Who is involved in specifying the service and why?

Help and advice!A few organisations that can help you with the detail...

Information and expertise

Nef

APSE

CLES

Social Enterprise UK

Association of Public Service Excellence - http://www.apse.org.uk/

Centre for Local Economic Strategies - http://www.cles.org.uk/

Trade association for social enterprises: http://www.socialenterprise.org.uk/ Represents development trusts and 'community anchor' organisations - http://locality.org.uk/ Locality

New economics foundation - important thinking on service design and co-production - http://www.neweconomics.org/

Social Return on Investment Network - developing tools to measure social value - http://www.thesroinetwork.org/ SROI Network

'Not everything that can be counted counts, and not everything that counts can

be counted' Albert Einstein [attrib.]

thank you

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