'It will all end in tiers...' SEUK's James Butler blogs on Procuring for Good

'It-will-all-end-in-tiers...'-SEUK's-James-Butler-blogs-on-Procuring-for-Good

James Butler, SEUK's Public Affairs Manager, who led on the research for Procuring for Good, comments on the findings...

We had some idea of how many councils were applying the Public Services (Social Value) Act 2012 from Communities Count which looked at Housing Associations and council procurement, but that was published in 2014 and was a limiting and slightly self-selecting study. Understanding and use of social value has moved on a bit since then. And we share best practice at our Social Value Summit and celebrate hotspots of social enterprise activity through our Places Programme. But none of these paints a comprehensive picture of what was going on across England.

So we issued requests to every council in England under the Freedom of Information Act: what came back surprised us. We’ve published the findings in Procuring for Good. If you haven’t got time to read the report, here are the main findings.

It’s all good (mostly)

A third (33%) of councils in England routinely consider social value in their procurement and commissioning and a quarter (24%) of councils in England have a social value policy (there is some crossover there, as you might expect). When we look at how councils are using the Act, 14% of councils are ‘embracers’ and are actively using it in all manner of interesting ways and have high, and sometimes very high weighting when judging tender applications. 19% we call ‘adopters’ who are routinely using the Act, but in what we might call a more limited way than the ‘embracers’.

1/3 councils then are pretty good. Yes some could go further, but given how difficult it is to change organisational behaviour, the Social Value Act is unquestionably a success.

The picture is more mixed when we look at the rest: 45% of councils are ‘compliers’ – they have incorporated the Social Value Act in their procurement policy but actually very rarely end up considering social value in any meaningful way. And 22% of councils are ‘bystanders’ – more of those later.

Scoring for social value in tenders

Social enterprises will probably be most interested to see how social value is being scored. Of those councils that are considering social value, there are two common pathways. The first is put social value-ish clauses in the tender – typically these tend to involve apprenticeships. The second is to including weighting for social value when scoring the tender either as a separate criteria or as part of the quality aspect of the scoring. In our classification of councils, ‘complier’ councils (45% of those surveyed) give social value a 5% or less weighting; ‘adopters’ (19% of those surveyed) between 5-10% of the overall score; while ‘embracers’ (14% of those surveyed) can score social value as high as 30% depending on the contract.

It will all end in tiers

Tier of council proved to be really key to understanding the differences in how councils use the Act. Local government structure is frankly a bit of a nightmare to get your head around; what you need to know is that the lowest tier, District Councils, tend to be small; the other tiers (Unitary, County and Metropolitan Boroughs and London Boroughs) tend to be larger.

The findings show that a third (32%) of District Councils fall into the ‘bystander’ category, meaning they are making little or no use of the Act. Whilst there’s some variation between how the bigger councils typically consider social value, the stats for District Councils stick out like a sore thumb.

On the face of it, this is really odd. District Councils should be closer to the communities they serve than some of the big councils. They should be really well placed to make use of the Social Value Act. When we dug down a little deeper into the responses, the reasons behind this are blindingly obvious. I simplify here a bit but the Social Value Act puts a duty on councils to consider social value for services above the OJEU threshold, which is currently €209,000. Since District Councils tend to small, they rarely have contracts which fit that criteria. When councils are facing massive cuts, why should a council leadership devote time to developing policy for something that they don’t have to do?

This for me is one of the strongest arguments for an extension of the Social Value Act yet. Government has strongly encouraged councils to consider social value beyond what is statutorily necessary in the Department for Communities and Local Government’s revised Best Value Guidance, but because it’s guidance councils don’t have to do it. Abolishing the threshold would make a huge difference.

Culture counts too

But, there are some District Councils who are using the Act and who we categorise as ‘embracers’. The legislative barriers don’t account for everything, and certainly don’t explain why some councils have referred to social value in their procurement policy (the ‘compliers’) whilst others are actively considering social value (the ‘adopters’ and ‘embracers’).

Culture counts too. Some administrative and political leaderships are simply more adventurous than others. Some people are naturally a bit more prepared to take risks, others are very much from the ‘steady as she goes’ school of management. Support, training and the dissemination of best practice may shift attitudes as social value becomes more accepted and widespread – they’re will be a tipping point whereby the more cautious leaderships become emboldened. I can see this may have the effect of moving ‘compliers’ to ‘adopters’, and ‘adopters’ to ‘embracers’. But it’ll take legislative change to alter behaviour of the ‘bystanders’.

Where do we go from here?

We’ve made four recommendations in the report for social value advocates (that’s us), for councils, for Government and for academia.  These are all achievable with goodwill.

More broadly, there’s room for more work. Procuring for Good is a quantitative survey. It would be great to have the resources to carry out some qualitative work on the social value policies councils have sent us. And we would be very much like to repeat this exercise with central Government and the NHS.

If you are interested in supporting this work, please do get in touch with my colleague, Charlie Wigglesworth - email charlie.wigglesworth@socialenterprise.org.uk or telephone 020 3589 4952.