Monitoring Social Value
- Meeting of Finance Panel (Panel of the Scrutiny Committee), Tuesday 25 February 2020 6.00 pm (Item 13.)
Nigel Kennedy, Head of Financial Services, Anette Osborne, Procurement Manager (ODS) and Kay Allsop, Contracts and Procurement Specialist will be available to present a report on The Social Value Act 2012 and Social Responsibility in Procurement. The Panel is asked to consider the report and make any recommendations accordingly.
Nigel Kennedy, Head of Financial Services, Annette Osborne, Procurement Manager and Kay Allsop, Contracts and Procurement Specialist addressed the Panel in regards to the report on Monitoring Social Value.
The Council agreed to implement a 5% weighting on social value within contracts above £25,000 in May 2019. The requirements of the Social Value Act for local authorities is simply that service contracts above c. £590k are required to include consideration of social value; the Council was shown therefore to be committed to embedding the principle more deeply.
Having implemented the concept less than a year previously the Council was still having to learn and manage a number of issues. In particular, one of the aims of considering Social Value was to provide support for Small and Medium Enterprises (SMEs). However, it was proving to be challenging to find a balance between a meaningful monitoring of social value and one which did not overburden SMEs with bureaucracy, thereby precluding them from contracts through the very things which were brought in to support them. The Council was working hard to bring SMEs alongside and ensure a level playing field, but work with SMEs is often best at a personal level, which is very resource intensive.
Owing to the need not to be overly-bureaucratic the Council also faced challenges relating to issues reliant on a level of bureaucracy: measuring the impact of various social value interventions, being able to evaluate the relative value of different interventions, and tracking that promised undertakings were indeed acted upon. Whilst the Council had some measure of the first, it was subjective and certainly would not allow for a comparison between the benefit of two different types of intervention. Monitoring of the latter required embedding through training and systems in contract management relationships. The Council was currently looking to the leaders on implementing social value – Manchester, Croydon, Bristol and Portsmouth - for ways to manage these challenges.
Despite the challenges recognised, it was also recognised that the Council is a long way ahead of many, many Councils both nationally and locally in terms of its grappling with the challenges and implementation of the requirement.
A number of issues were raised in relation to the report presented. In particular:
- The suggestion that the social value weighting was only applied to non-OJEU contracts rather than bigger contracts. It was confirmed that this had taken place at the very commencement of implementation, but the social value weighting had been extended shortly after.
- The recognition that not all responses to questions on social value are recorded in a central location. Whilst desirable for data purposes, it was not possible to record all offers of social value due to an alternative process, purchase orders, being available for contracts of less than £25k, which would not have records made centrally.
- How to be more exacting in ensuring social value benefits are realised when assessing tender documents. In light of the challenges faced by SMEs and the need to maintain a level playing field it was suggested that a diversity of approaches would be required to suit the diversity of contract-types and potential contract-fulfillers. A single policy would either not draw out the maximum benefit it could from monitoring social value, or else it would overburden and exclude smaller businesses.
- Whether it was possible to require minimum standards for certain criteria, such as paying the Oxford Living Wage. Though desirable, the idea had been explored and the Council’s legal team had issued advice that to require payment of the Oxford Living Wage would not be legal. This was an issue of frustration because it meant that companies paying less to their staff could offer better prices, but the social value weighting was not able to offset this.
- Whether the Green Procurement Policy could be included within the Council’s redrafting of its Procurement Strategy. It was confirmed that the Green Procurement Policy was already included within the draft Procurement Strategy.
- The desirability of increasing weighting for social value within contracts to 10%. It was noted that it certainly was desirable to improve social value impacts through weightings for contracts, there were issues yet to be identified on how to achieve this. Specifically, whether increasing the percentage weighting for social value would risk diminishing the percentage available for key competencies for a contract to such a point that it was detrimental to the overall contract, and how social value requirements would interact with - and potentially be covered by - other policies being developed by the Council, such as the Procurement Policy and the Sustainability Strategy.
The report was NOTED and it was AGREED to make the following recommendations:
- That the Council underwrites an event for social value similar to that run by Fraud Prevention, which brings neighbouring Councils, support service providers and experts together to improve overall standards.
- That the Council benchmarks its spending with SMEs against other councils nationally.
It was AGREED that a further update would be provided to the Finance Panel in September 2020.
- Social Value Act 2012 and Social Responsibility in Procurement_17Jan20 (003), item 13. PDF 862 KB View as HTML (13./1) 106 KB