Government needs to use the Social Value Act to support its partner better: but what is Social Value and why is it so important to public service delivery?

We all want to see local communities come together to solve local issues. During good times and bad, local people are at their best when they are working, or celebrating, together. A strong local community is an end in itself.

But voluntary and community sector organisations, the invisible infrastructure in our local communities, are also partners with government in the delivery of local public services.

Because of population growth and demographics, government is struggling to meet the demand for quality local public services. The voluntary, community and social enterprise sector, or VCSE, often picks up the slack.

The elderly who are isolated and lonely. Those who have recently arrived in the UK and have no support around them. Vulnerable children and young adults who haven’t been lucky enough to have benefited from a stable family unit. Giving them a supporting hand, helping them engage with the wider world, working with them so they can, in turn, contribute to their local community. This is what your local VCSE does, with little fanfare, day in, day out.

For government the VCSE deals with local problems. Before they become intractable. Before they become an expensive. Before they snowball and land in the lap of government.

This is the ‘preventative agenda’ — a bulwark of government policies across a number of recent administrations. And it’s why the VCSE is such a fundamental part of public service delivery in the 21st century.

And it’s not just demographics and population growth that have created this pressure on public services: local government is in a double bind. An increase in demand for local services has come at a time when budgets have experienced historic cuts. Things are getting worse… to quote Kevin Mitchell, ‘crisis is on the edge of a bell curve and some of the most talented people in local government and the VCS are working round the clock to keep that crisis at bay.’

And, of course, there is now the cost to local government of the response to the Covid-19 pandemic.

But for many, the crisis is already here. It’s a rare week when we don’t hear about the NHS being in crisis. Or a council under serious financial pressure. Or the police unable to deal with rising youth crime.

This is why our customers in local government are so interested in Social Value.

What is Social Value?

The Social Value Act is the legislation that allows government to ask their suppliers to give something back to the geographic areas in which suppliers are delivering services, goods or works on behalf of the government. It’s relatively new — dating from 2013, and woefully underused.

Each year, government spends hundreds of billions of pounds on private sector suppliers. During the government buying process, government is able to ask suppliers to submit proposals as part of a competitive bidding process. Proposals to win contracts are evaluated in terms of price and quality and, following the legislation coming into effect, Social Value.

That’s right — the government now has the legal basis to ask suppliers to support their local communities. And many suppliers have a corporate social responsibility strategy and budgets, so government is pushing at an open door…

When we came across the Social Value Act we saw an opportunity. We saw straightaway that a marketplace approach could work. We were inspired by ‘sharing economy’ businesses — whose marketplaces use tech and data to create matches between those who have excess capacity and those that need it. Have a look at Nesta’s ShareLab programme for some examples (including the Social Value Exchange) of how ‘sharing economy’ principles are being applied to create positive social impact.

The Social Value Exchange matches supplier resource with community projects

We match up community organisations with suppliers in the procurement process, creating a win-win-win for community, supplier and government. We’re working with some of the most high profile councils in the UK and some of the biggest housing associations. We’re helping government spend its money in a way that puts something back into our local communities, that supports thriving, connected and strong communities, and that could potentially improve the quality of life for millions of people across the UK who need our help.