Policy and practice Reports and research Social value in government procurement Children England's response to the government's consultation Children England is the infrastructure body for the children’s voluntary sector and has been supporting and representing charities delivering services for children and families since 1942. Our response to this consultation is based on learning and intelligence from our members’ experience of delivering a wide range of public services, including health, safeguarding, family support and residential care. The charity leaders’ network ACEVO endorses this consultation response. Summary The government’s proposal to embed social value across all public service procurement is a powerful and welcome ambition but it will not be achieved by the ‘light touch’ approach taken here, whose failure to give social value essential and robust weighting in procurement decisions will perpetuate the price-driven contracting that, along with wider commissioning issues, is leading to dangerous failures in our public markets. Children England welcomes the championing of social value in government commissioning and procurement, both here and in the Civil Society Strategy. It is inherently desirable for public goods and services to be delivered with the maximum possible benefit to the communities and the environment they serve, and central government has key responsibility for not only permitting but creating the conditions for this. However, whilst the guidance on themes, policy outcomes and evaluation model will be useful in a best-case procurement scenario, the new approach will achieve neither the government-wide centrality of social value aspired to in putting ‘values at the heart’ of all public services, nor the avoidance of large-scale contract collapse caused by current trends in government procurement. Cross-references to strategies such as the Civil Society Strategy are welcome, but stronger links to existing standards such as the Nolan Principles of Public Life must be made, and the wider regulatory context in which commissioning and procurement take place must be reviewed to create a truly fair, and socially valuable, market for public services. Question 1: Do you agree with the proposed policy metrics in the model in the attached annex? Do you have examples of such metrics being successfully used in public procurement? No. The suggested themes and policy outcomes are appropriate but the proposed metrics rely heavily on quantity, rather than quality, of socially valuable activity. Whilst a high number of employment or apprenticeship opportunities, for example, is certainly desirable, and allows for as much diversity as possible in the type of opportunity and the range of people benefitting, this metric cannot take into account the potentially higher quality of a smaller number of opportunities offered by a small local charity or social enterprise whose presence and interdependence in the community will have more sustainable benefits to it in the long-term. The policy metrics should make clear that in each thematic area, depth and quality of engagement / opportunity should be considered against sheer scale, especially in light of the government’s aspiration to create a level playing field for smaller providers. They should also clarify that different measurements will suit different types of bidder, and encourage commissioning and procurement teams to communicate these requirements and metrics to potential bidders well in advance of the process. The requirement for evidence of social value delivery from ‘key suppliers’ further down the supply chain is admirable, and recognises that many delivery partners will have value to add. But it also risks perpetuating the reliance of prime contractors on their smaller, less powerful sub-contractors for demonstration of social value in order to win contracts, without ensuring that those sub-contractors will be sufficiently resourced and supported to deal with the ambitions and risks entailed. This points to a broader problem with the policing of social value, for which the current proposal does not seem to have a solution: bidders will be expected to submit their own quantitative information on social value achieved, with no independent scrutiny to ensure this information meets the Nolan Principles of honesty, openness and integrity. We believe that any and all organisations delivering public contracts should be subject, for their contracted work only, to laws on freedom of information and human rights. Question 2: Do you agree that the proposed minimum 10% weighting for evaluating social value in the bid is appropriate? No. Setting a minimum 10% weighting and an obligation to consider social value only ‘where relevant’ is entirely inconsistent with government’s proposal to ‘maximise social value effectively and comprehensively through its procurement’ and see ‘public services delivered with values at their heart’. All areas of public service, from road building to providing school lunches, have the potential to help or hinder local people and places – all involve employees or volunteers; resource depletion and renewal; and agreements and relationships with other agencies. It is therefore impossible that social value could be deemed ‘not relevant’ to a government contract, and undermines the case made to central government departments (historically lax in their consideration of social value), that this stage of procurement is an essential part of their work. A weighting of 10% is too low to give a bid with a strong social value component a competitive edge against one with little social value but an extremely low price attached – it will not be the ‘differentiator’ the approach aspires to. Where procurement officers may want to award a contract to a bidder with excellent environmental policies, for example, it will be extremely difficult for them to justify in a departmental team where a default of 10% weighting has been assumed for social value, against 90% for economic considerations: cost-based decisions will continue to predominate and large, less ethical providers will continue to be favoured by government contracts. We suggest that the minimum weighting should be set at a higher level and all departments encouraged to select an appropriately robust weighting on a case by case basis. Question 3: Does the proposed approach risk creating any barriers to particular sizes or types of bidders, including SMEs or VCSEs? How might these risks be mitigated? Yes, insofar as it places a burden on bidders to supply extensive quantitative information to a uniform process. Although the proposal offers a ‘light touch approach’ for government officials, and claims to focus on ‘a qualitative assessment of the social impact’ of bids, the suggested framework of metrics does not support a nuanced or collaborative approach to appreciating and evaluating social value. As Social Enterprise UK have suggested in their recent report, ‘qualitative evidence of social value should be accepted’, and training for both government officials and potential bidders is essential in creating a shared understanding of social value and a commissioning culture that is flexible and confident enough to invest it in. “All public bodies should shape social value solutions with their community and providers through regular forums and training events, active and continuous contract management and clear communication of social value priorities.” It is unclear from the proposal exactly how and at what stage the social value award criteria will be decided and communicated to bidders. Will these be set across the department and communicated to all potential bidders in advance of tenders being submitted? Will they bet set on a case by case basis, or developed through dialogue with potential providers? Will evaluation metrics be tailored to each contract? We believe potential providers should see more clarity on this before endorsing the new approach, and that a high standard of communication and collaboration between government departments and bidders should be built in, as well as the flexibility to tailor each procurement process to the unique nature of each public service. Question 4: How can we ensure government’s existing procurement policy mandates (for example on levelling the playing field for SMEs) take precedence in designing the procurement? Social value is unlikely to outweigh other policy mandates while the minimum weighting is an optional 10%, as described above. But structural problems with government contracts go beyond the prevalence of social value in the procurement process. When an existing contract is put out for new bids, particularly if the terms or priorities of the contract have changed, current providers can find themselves unable to compete, and the social value they offered is often lost when the contract changes hands. Existing assets such as diverse workforces, progressive policies and strong community links can be invisible, and therefore lost, in the procurement process. Whilst a procurement framework with a historical appreciation – both of the value built up by previous providers and any poor practice or unethical behaviour in the history of bidders – would help to deliver more consistent and growing social value, it is simply not the right mechanism for engaging some of society’s most socially beneficial organisations, or for delivering certain social benefits. Government grants, as explained by Grants for Good, are more appropriate investment for the many voluntary and community organisations who have particular understanding of local, complex or specialised needs and require the flexibility of a grant, rather than the stricture of a contract, to respond and adapt to them. Grants and more broadly government grant programmes can be designed co-operatively with providers to make best use of diverse partner input, shared responsibility and ongoing, qualitative review of the value to communities and environments.