What is Social Value ?

This is not as easy a question to answer as it may first appear.  We were commissioned by Defra to look at the applicability of all social, economic, and environmental methodologies.  In particular the focus for this work was whether these methodologies could or could not be used within a public procurement environment.  This is of course a really important question because if you want to achieve, or demonstrate, or measure social value you have to be sure that the approach you adopt can deliver your objective.  Most organisations need Social Value evidence to support public procurement or funding activity and this regulated environment does require a more rigorous approach.

There is a continuum of methodologies available from descriptive such as case studies at the Social/subjective end, and auditable objective approaches such as LM3 at the Value/objective end.  The newly introduced Public Services (Social Value) Act places a duty on Commissioners to consider Social Value but curiously neither defines the meaning of Social Value nor supplies guidance in its measurement.  While catalysing interest in the area this omission has added to the confusion for organisations in all three sectors.

More descriptive methods can be invaluable for stakeholders or maybe funders to give a 'feel' but will not be usable in a regulated public procurement environment either as a commissioner or supplier.  In the centre you have 'monetised' methodologies such as SROI.  These assign a financial value (as a proxy) to an outcome.  This provides an impression of auditability and objectivity but because they cannot be compared directly, and because they depend on forms of extrapolation into the future; the use of such methodologies is extremely limited in the supply of public services.  Finally there are the objective methodologies.   LM3 leads the way as it is objective, auditable and provides a true financial value, however the rigour of this approach does mean there is a corresponding reduction in the breadth of description of activity.  The table below summarises the strengths and weaknesses of various approaches.

1= low 10=high

Anecdotal
E.g Case Study
Monetisation
E.g SROI
Impact Measure
E.g Outcome Star
Financial
E.g LM3
Objectivity/Auditability 1 5 8 10
Commissioning/Tender usability 1 2 7 9
Resource cost Human and £ 4 8 4 2*
Breadth of description 5 7 5 5

* if using lm3online

There is no absolute right of wrong, but clarity of purpose lies at the centre of the question of which methodology to use.  That is why the Social Value tool is designed to manage the process whatever your purpose and our partnership arrangement can help you to design and implement this approach whatever organisation type you are.

 Reports

The two reports below one by Adam Wilkinson and the other by Anthony Collins solicitors cover the issues around legal requirement and meaningful methodology that lie at the heart of the questions of Social Value, and taken together demonstrate the need for a new and integrated approach.

Measurement of Sustainable Procurement 

Adam Wilkinson

 

Social Value and Public Procurement - A Legal Guide

Anthony Collins Solicitors