Achieving Social Value Through Procurement
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1 Achieving Social Value Through Procurement Liz Holford MBA MCIPS Supply Chain Development Ltd CIPS Central London Branch, 5 th March 2014
2 Discussion points 1. Why both public and private sector organisations are being asked to achieve social value through procurement and supply chain management 2. Public Services (Social Value Act) Practical steps to achieve outputs and outcomes that generate social value
3 Drivers to stimulate social value Public Services (Social Value) Act 2012 S 106 planning obligations Client requirement CSR / Reputation Right thing to do
4 Public Services (Social Value) Act 2012: Background Private Members Bill with cross-party support Initially focused on stimulating trade with social enterprise remit expanded and changed Applies to public services contract or framework agreements to which the Public Contracts Regulations 2006 apply - above EU Threshold
5 Social Value Act 2012: Requirements Consideration of the economic, environmental and social benefits of an approach to procurement, to a relevant geographical area to help achieve maximum value from public spend Consideration of consultation with internal and external stakeholders at pre-market stage Identification of potential social, economic and environmental impacts 5
6 Social Value Act 2012: Impact Enhances opportunities relating to other legislation Raising profile of social value and increasing understanding Enabled public bodies to stimulate social value through procurement without incurring additional risk and cost and so encourage others to do so 6
7 Examples of social value outputs & outcomes Support for young people Jobs Apprenticeships & skills Improved economic opportunity Living Wage Diversity & inclusion Labour standards Volunteering pro bono to charity Local, SME and diverse suppliers Health & wellbeing
8 Harrow Council: Housing Responsive Repairs & Maintenance Service Supply value chain analysis and pre-market engagement resulted in going to market with 4 lots 1 lot won by a small, local firm 1 lot won by a medium firm based in neighbouring authority 2 lots won by a national firm Customer satisfaction in excess of 95% (target = 90%) Targets being exceeded for jobs completed right first time 15% savings on prices paid under previous [single] contract Apprenticeships, local jobs and local spend generated Happy residents!
9 Network Rail Thameslink Programme 1. Promoting inclusion in recruitment and workforce management 2. Greening the urban environment 3. School visits re rail and power safety, drug & alcohol awareness, engineering challenges, careers options 4. London Bridge Station Redevelopment (2013 to 2018) 30 previously unemployed people into work to date 27 new apprentices started to date, including; a procurement apprentice new programme of railway apprenticeships CITB-funded Construction Skills Academy established Useful short courses being delivered (Traffic Marshalling, CSCS etc) 9
10 Crossrail 1. Suppliers 1700 businesses have secured work 42% SME & 62% outside London 2. Sustainability Constructing Better Health scheme Considering use of SEDEX and ETI 3. Community Investment Programme 4. Jobs & skills Tunnelling & Underground Construction Academy; training for 3,500 people 260 apprentices already 1858 vacancies via Jobs Brokerage Service Data & image: Crossrail
11 Implementing the Act (word or spirit ) Plan: Business Case Pre-market Warn, warm and consult the market and other stakeholders Identify social, economic and environmental opportunities related to contract delivery
12 Implementing the Act (word or spirit ) Do: Procurement Social, economic and environmental opportunities as requirements within the specification Clear, output / outcome based specifications. Ask bidders to produce SMART action plans to achieve requirements including proposing outputs (e.g. apprenticeships) Promote to appropriate suppliers, regardless of size or ownership Make bureaucracy of bidding, and minimum requirements, appropriate to risk and value of contract
13 Implementing the Act (word or spirit ) Implementation: Contract Award Include scores for SMART action plans in award decisionmaking Meet with the successful bidder and plan with them how they will implement their SMART action plans
14 Implementing the Act (word or spirit ) Review: Business as Usual Contract management Define, collect and analyse performance data relating to social, economic and environmental putputs Collect and analyse qualitative information on progress Work with provider to achieve continuous improvement Report social value outputs
15 Taking a strategic approach British Standard in Sustainable Procurement: BS 8903 ISO coming soon
16 Where contracts have already been awarded Variation / amendment to contract Voluntary agreement to comply with client policy Charter not as powerful as integrating into a procurement process
17 Glasgow s Emirates Stadium & Chris Hoy Velodrome Data & picture: Sir Robert McAlpine Value of tenders awarded to; SMEs m local SMEs and Ses - 6.4m 57 apprenticeships 182 new entrants to construction industry 300 person weeks of work placements Estimated savings to central government from Job Seekers Allowance alone = 654,500
18 Tri-borough Leisure & Library Services Brent, Ealing & Harrow Councils 30m savings over 10 years ms upgrade to facilities and services Target group gyms and inclusive activity to improve health outcomes in hard to reach groups Local jobs, apprenticeships, work placements and supply chain development Photos: Harrow Times
19 Birmingham City Council & Carillion Environment Agency & Skill Mill Ltd Gateshead Council Oldham Council & Barclays Green Deal Programme River Management Support for troubled families framework Banking Services Social Value outputs and outcomes Local SMEs and VCSEs in supply chain, investment in green energy facilities, engaging schools and young people in energy efficiency Rehabilitation opportunities for young offenders reoffending rates down to 36% (from 52% national average) Capacity build local VCS, family mentor volunteering programme, opportunities for volunteers to progress into employment New apprenticeships, work with local schools and colleges to develop employability and money management skills Islington Council All contracts 98% of suppliers now paying London Living Wage
20 Lessons Learnt Ask early for social value and be realistic listen to the ideas of the market Ask for and measure it or you don t get it Social value can be delivered as part of core delivery, alongside cost savings
21 Thank you let s discuss Liz Holford MBA MCIPS Supply Chain Development Ltd info@supplychainfuture.co.uk
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