Social Value in Tenders
Social value is an important aspect of business today. It refers to the broader impact of an organisation’s activities on the community, economy and environment. It encompasses the positive contributions that businesses, public entities and non-profit organisations make beyond their financial performance.
When it comes to public sector tendering, the importance of social value has increased significantly and continues to do so. However, it can be a bit of a minefield with authorities often having different requirements leaving businesses unsure about how to meet certain aspects.
At Contracts Advance we often get asked about this topic. In this paper we’ve shared some responses to frequently asked questions along with additional insight from our expert Bid Advisory team.
General Strategies and Tips for Social Value Responses
Where do you think is the best place to start when building a social value response from scratch?
When crafting social value responses, it is essential to develop each response from scratch. Avoid copying and pasting from previous submissions, as social value requirements can differ significantly between buyers. Carefully analyse the question to understand what the contracting authority is seeking, and tailor your response accordingly without forcing existing initiatives to fit. Additionally, thoroughly research the contracting authority: are they local, serving a specific area, or national? What is their social value policy? This understanding will guide you in planning and creating a relevant and effective social value response.
How can businesses strengthen their social value responses?
Actual commitments and added value can significantly strengthen a business’s social value responses. By making concrete commitments rather than vague promises, you demonstrate seriousness to the buyer, thereby improving your response and scoring higher. This is best achieved through thorough pipeline generation and pre-bid communication and research. Before promising initiatives, conduct research and engage with relevant organisations and charities. This enables you to provide specific details about who, where, and quantities in your response. Additionally, including a statement of commitment between your business and these organisations can further reinforce your dedication.
Offering added value can greatly enhance your response. For instance, if your research identifies a significant Polish-speaking population as an example, proposing additional support and resources for this group shows your investment which strengthens your response. By thoroughly understanding the needs and context of the buyer, you can tailor your social value initiatives to demonstrate genuine commitment and added value.
And importantly, keep it local, even hyper-local! When focusing on social value, a buyer in the north of the country doesn’t not care about your initiatives in the south, unless you’re using it as evidence of a previous initiative. They want impact local to them, if you can’t fulfil this, then it questions whether this opportunity is right for your business.
What key terms, words, phrases should we look to incorporate into our social value responses?
Key terms and phrases should be tailored to the specific question and the requirements of the buyer, as not all ‘buzz words’ will be appropriate for all responses. However, certain key phrases can enhance a response. Some of these are listed below:
“Asset-Based Community Development” (ABCD). This demonstrates a strategy for sustainable, community-driven development. Examples include establishing new services such as food banks in underserved areas. Incorporating authentic social value initiatives will always strengthen your response.
Sustainable Development: This shows you’re aiming to provide long-term commitment to environmental, economic, and social sustainability rather than ad-hoc support.
Community Engagement: This indicates to the buyer, an active involvement and collaboration with the local community. This can be enhanced through research into the community, are their large ethnic groups that need to be catered to, is it an area where homelessness is high, are there fewer opportunities for young people in this area?
Social Impact: Emphasizes the positive effects on society and individuals, if you can provide evidence on this, perhaps you’ve created a service, scheme like this before and can provide quantifiable evidence, this will support and enhance your response.
Measurement and Calculation of Social Value
What tools can we use to quantify social impact?
The Social Value TOMS calculator is a valuable tool for providing quantifiable data in a social value response. Based on Themes, Outcomes, and Measures (TOMs), it helps in understanding the value of your initiatives. Quantifying activities like volunteering can be challenging, but this tool provides a framework: for instance, you can estimate the value of volunteering hours at £16 per hour for a standard staff member or £101 per hour for experts. Additionally, if you are proposing an initiative previously implemented in another area, providing evidence of its impact there can help the buyer quantify its effectiveness.
Key Social Value Activities and Priorities
For local authority contracts, what are the priority social value activities you’d recommend we focus on to ensure we score well? / What are the Top 5 social value deliverables that public organisations require?
There are no universal ‘priorities’ or ‘deliverables’ that apply to all local authorities. While there may be common requirements, such as environmental or local initiatives, the specifics of these initiatives can vary significantly. It is crucial to understand the requirements of each local or contracting authority, as this will indicate their particular priorities.
What is the latest or up-and-coming social value focus for government we should be aware?
Our experts have identified several areas that are likely to remain or become increasingly important in social value requirements.
Environment: With the Net Zero deadline approaching, contracting authorities are expected to introduce more stringent measures and requirements, demanding higher levels of commitment from suppliers. It is essential to move beyond vague promises or corporate social responsibility initiatives and demonstrate the ability to provide localized environmental initiatives relevant to the contract.
Economy: As budgets tighten and requirements increase, there may be a heightened emphasis on the monetary value provided through social value. This could include mandatory apprenticeships and other economic contributions.
Additionally, there may be a stronger link between social value requirements and the specific contract, making sector knowledge increasingly important. Suppliers will need to understand the nuances of the sector to effectively meet these evolving social value demands.
Environmental and Carbon Footprint Concerns
In terms of social value with environmental and social governance, do we think there will be more cross-over? We are already seeing information requests for Carbon Reduction plans.
We are already seeing the integration of environmental considerations into social value assessments through questions and the TOMs framework. In the future, this aspect may either become a more significant requirement within social value or be divided into two distinct sections: Environmental Value and Social Value, each with separate points available.
For example, the NHS now requires companies with turnovers under £5 million to complete a carbon assessment using the Evergreen Sustainability Supplier Assessment. It is likely that similar requirements currently applied to large companies will extend to small and medium-sized enterprises, with authorities requesting detailed breakdowns of emissions.
Moving forward, having a Carbon Reduction Plan may become a prerequisite for tendering opportunities. Currently, it is sufficient to commit to having such a plan in place by the time of the contract. As with all aspects of social value, authorities will rigorously challenge and verify these commitments.
Scoring and Importance in Tenders
Within tender scoring, what percentage is typically being placed on social value?
In tendering, contracts procured through central government departments currently require a minimum 10% weighting for social value. Moving forward, this requirement may increase, potentially replacing some of the weighting traditionally given to pricing which as outlined in the Procurement Bill, will no longer require a weighting. Alternatively, social value and environmental considerations may be split into two distinct sections, each with its own weighting.
Approximately what percentage of our total fee should the value of social value element be?
A generally accepted guideline is to never commit to spending less than 10% of the contract value on social value initiatives. However, as the importance of social value continues to grow, authorities are increasingly expecting commitments closer to 20%. The TOMs framework, for instance, already anticipates a contribution of around 20%.
Conclusion
To conclude, the key things to remember when writing a social value response are:
1 – Read the question and understand the buyer’s needs. Responses that don’t focus on these will not score well.
2 – Social value promises are not about what you’re already doing, but what you’re promising to do over the course of the contract.
3 – Don’t over promise! Committing to everything under the sun may score you high points, however if it’s not achievable then it’ll only reflect badly on you in the long run. Social value commitments are becoming ever more important, and therefore you’re likely to be assessed on whether you’ve been able to achieve your promises. Under the Procurement Bill, KPI data will need to be released, including performance against social value and environmental commitments.
4 – Pre-bid is essential to scoring high marks on social value, understanding the buyer, local area and community will allow you to provide sustainable community led development and submit your responses with evidence, and letters of commitment.
5- Finally, remember to focus on being local to the buyer.
If you would like any further insight or support from our expert Bid Advisory team, please get in touch and we’ll be more than happy to help.
Written by Chrissy Heaton Advisory Hub Business Manager