A new report, Front and Centre – Putting Social Value at the Heart of Inclusive Growth, launched today (21 May 2019) by Social Enterprise UK has found that local councils are increasingly using procurement as a way to drive higher economic growth.

The report calls on central government, local councils and other public bodies to do more to utilise social value, putting it front and centre of decision making.

Based on in-depth research across local government, the report shows a growing use of social value – making spending decisions not just on financial cost but on the economic, social and environmental impact.

82% of local councils believe that spending public money focusing on social value, rather than just focusing on the cheapest product, generates higher levels of growth. Sunderland, one of the case studies referenced in the report, was one of the fastest growing cities in the UK in 2018. Two-fifths of councils also believe that a social value approach can reduce inequalities.

With the benefits of social value and using public money strategically increasingly recognised by local councils, the research calls on more to be done to embed social value into all aspects of decision making, using it as a driver of inclusive growth. The report also asks for more support to be given to local councils to measure and report on the value that they are creating, so that there is a consistent pressure to drive better performance.

The report calls on central government to change the law so that it catches up with best practice and spreads the benefits of social value across the country. This could be done quickly by extending the Public Services (Social Value) Act – a law which was passed by the Coalition Government in 2012.

The research was supported by the independent trust, Power to Change, Cordant Group Engie, and the Lloyds Bank Foundation.

Commenting on the report, Peter Holbrook Chief Executive of Social Enterprise UK said:

“Necessity is the mother of invention, and the squeeze on public resources that austerity caused has forced everyone to think differently. What we have seen in many parts of the country is strong leaders utilising every tool to boost local economies and spread growth across communities. Social value has been critical to this change, creating new jobs and new opportunities. It is having transformative results on the ground. Now that we have proven that social value works, we must place it front and centre in the way that we run our economy.”

Ailbhe McNabola, Head of Research and Policy at Power to Change, who co-funded said:

“We have seen an increase in awareness of the Social Value Act with more and more public bodies realising that social value can drive growth at a local level. What we need now is a recognition that social value can be a vital tool in working with communities to deliver services that address local challenges. Organisations such as community businesses, social enterprises and the wider voluntary sector are working at the heart of their communities and social value should be the key to unlock greater collaboration with these groups.”

Phillip Ullmann, Chief Energiser at Cordant Group commented:
 

“If we’re to tackle the challenges posed by rising inequalities, be they regional disparities or inequalities of health, wealth, income and opportunities – we need a new covenant between people, the state and business. Social value allows us all to think more broadly about the impact of how we spend our money and the wider impact of our own operations. This research shows that much progress has been made but all public bodies, as well as businesses which work in public sector markets, need to fully embrace social value and the potential it has to improve the communities we work in.”

Jamie Quinn, Director Responsible Business and SHEQ UK & Ireland at Engie

“Every sector has a role to play in driving this agenda forward and the role of businesses is key. Social value has the potential to create new relationships between the public, private and social sectors resulting in stronger communities and better living and working environments for the people and places that we work with.”

Paul Streets OBE, CEO of Lloyds Bank Foundation added: 

“As this research recognises, there are countless opportunities for greater use of social value to drive growth and strengthen local communities. We know that small and local charities in particular deliver high levels of social value for individuals, the economy and communities and with budgets stretched and demands high, it is critical that government recognise the full value of investing in these charities. It’s promising to see the importance of social value gaining momentum at a local level but much more needs to be done by government at all levels and with leadership from the top to fully grasp the opportunities that social value offers – we hope this research will help encourage and catalyse this to happen.”

ENDS

Notes to Editors

To download Front and Centre – Putting Social Value at the Heart of Inclusive Growth click here

For further information please contact Shehan Perera at Social Enterprise UK – shehan.perera@socialenterprise.org.uk | 020 3589 4948/07910 222409. To discuss the findings of the research in more depth contact Claire Mansfield, Director of Research at Social Enterprise UK – Claire.mansfield@socialenterprise.org.uk

Key Recommendations in the report

  1. Central Government should lead by example. In particular, it should:
    1. extend the Social Value Act to cover goods and works as well as services to catch up with existing best practice.
    2. include social value within its Industrial Strategy and other major policy strategies. We welcome the renewed leadership by the government in championing social value, but it is important that the golden thread of social value is woven through all its major policy statements.
    3. merge the Public Value Framework and Best Value Guidance with the Cabinet Office’s emerging Social Value Framework to create joined up “Social & Public Value Framework” and ensure this framework recognises all types of social value.  
  2. In order to drive inclusive growth, social value needs to be considered more strategically at all scales whether that is ward level, within councils or regionally. To achieve this, local authorities should:
    1. convene Regional Social Value Taskforces in order to align social value priorities at the most appropriate level.
    2. specifically state their social value priorities within their corporate plans and strategies for inclusive growth.
    3. assign a senior leadership role specifically focused on delivering social value at both a political and operational level.
    4. have a dedicated training programme on social value, including for councillors and elected leaders. 
    5. produce a “Social Value Budget” alongside the Financial Budget.
  3. Government leaders (both central and local) must create a culture where staff have permission to experiment with social value.
  4. The Local Government Association (LGA) should make social value part of the Peer Challenge Programme.
  5. 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.

About the report

The report, published by Social Enterprise UK with the support of the Cordant Group, Engie, Power to Change and the Lloyds Bank Foundation, is based on in-depth surveys and interviews with council leaders, chief executives, procurement officers and civil servants, looking at how social value is being embedded and used by both central and local government. In total 180 respondents from across local government responded to the survey. The report also features three detailed case studies looking at how social value is being used in Sunderland, Hackney and Suffolk.

It was written by Dr Claire Mansfield, Director of Research at Social Enterprise UK with Nancy Towers and Ross Phillips.