The Journal for Executive and Governance Leaders

Using procurement to create social value

Social Value UK defines social value as “the quantification of the relative importance that people place on the changes they experience in their lives”. Social value is a concept that addresses the benefits to the wider community, as well as the non-financial impact of businesses, such as the wellbeing of individuals and of the community.

Achieving social value is just as important as saving money and just like cost savings, social value begins with the supply chain and procurement.

Melissa Bell

The notion of social value is becoming increasingly important for businesses of all sizes, in all sectors. This is especially true in the education sector, where the wellbeing of future generations is of great concern. Responding to and helping support young people with social and environmental concerns of today, on both a global and local scale, is more important now than ever before.

Procurement is well placed to help deliver social value for schools and academies. By understanding the true driving force behind the requirements, procurement can use the supply chain to unlock the real desired outcomes. Value for money is still as important as ever, however procurers today have a more holistic view of the term ‘value’ – value for society, the environment, the local economy. In the education sector this could support schools in educating the next generation on reducing their impact on the environment and addressing social inequalities.

So how can effective procurement help MATs and academies with social value? As a leader in procurement and an advocate in social value YPO has developed eight easy steps to help embed social value outcomes into procurement;

  1. Make social value relevant. Figure out what it is that is really important to your MAT or academy and what issues you would like to challenge? For example, are there high levels of obesity in your catchment area or high unemployment rates?
  2. Engage with your supply chain to understand how they help to address some of these issues and what social value means to them. Everyone is on their own social value journey and has their own social value heartbeat. Try and take your suppliers on your journey with you, work together to address the challenges you face.
  3. Embed social, economic and environmental impacts as part of your specification. For example, living wage, diversity and inclusion, labour standards, recycling, energy efficiency, recruitment strategy, and apprenticeships. These are just a handful of impacts that can be considered.
  4. Check the modern slavery statements of prospective suppliers and look for organisations that are transparent about their supply chain.
  5. Ask bidders to provide SMART (Specific, Measurable, Achievable, Realistic, Timed) objectives to meet your social value requirements as well as possible outputs such as apprenticeships, volunteering, lower fuel consumption etc.
  6. Ensure the scoring process for the supplier isn’t geared mainly towards cost saving but includes factors such as how socially and environmentally responsible they are.
  7. Make social value part of the KPIs of your contract and monitor them alongside other contract management deliverables.
  8. Don’t be afraid – the procurement regulations specifically allow contracts to be awarded on such factors such as environmental and/or social aspects (linked to the subject matter of the contract).

So, when you’re looking at procuring your food and catering contract consider what social value can be included. Simple things such as seeking to use local produce adds to the local economy and can reduce food miles and therefore reduce the impact on the environment. Including a gardening club or grow your own activities can improve pupils’ understanding of where food comes from and promotes a healthy relationship with food therefore reducing obesity rates.

Employability skills are hugely important for MATs and academies to prepare children and young people for the next stage in their life. Including terms where your suppliers help support employability initiatives could be a great benefit. When contracting for your energy requirements, consider green energy or self-generation and work with your supplier to improve the overall efficiency of your site.

Achieving social value is just as important as saving money and just like cost savings, social value begins with the supply chain and procurement. By considering their social, economic and environmental impacts, schools and academies can ensure they strengthen the communities in which they operate.