Plenary Session - Social Value vs Value for Money

Transcription

1 Plenary Session - Social Value vs Value for Money Neil Whittenbury - Head of Neighbourhoods (Midlands) (neil.whittenbury@midlandheart.org.uk) National Housing Federation Social Enterprise UK 23 rd April 2013

2 Format Personal Introduction and why I am here PLENARY SESSION TITLE Midland Heart The Procurement The Outcomes Handover for a Successful SE s perspective Keith Burgess -Head of Oakleaf & Support Services

3 Plenary Session Social Value is part of Value for Money NOT VS they don t conflict! VFM = Financial, Environmental, Social What weighting do you give to each?

4 Midland Heart Operate in over 50 local authority area s Approx 32,000 homes OUR PURPOSE - Housing, Care and More

5 The Unknown - Environmental Services Grounds Maintenance/ Cleaning Window Cleaning Approx 2.5m per annum Contract end 30 th November 12 1 Contractor provided 99.9% of services 27 local authority Previous tender Many contractors eliminated Bartering process between 3 national contractors

6 Step 1 _ internal perceptions Procurement Complex tender more work Finance Multiple Companies _ Multiple Invoices Exec and Board More Companies, efficiencies, higher cost

7 Step 2 Customer wants Quality Price Contractors is based locally Employ local people Contractors takes on local apprentices Good staff training levels Environmentally Friendly

8 Step 3 _ The Procurement How do we attract more suppliers? How do we level the playing field for smaller contractors? Identifying barriers Identifying what they are good/ weak at Design Procurement Process Accordingly

9 Outcomes _ Social Saved Customers 1.75m over 5 years Mix of social enterprise, family business, and large contractor awarded work Employ Local Labour Apprenticeship Schemes Partnership Approach to Worklessness Improved Customer Satisfaction (early days)

10 Outcome - Environmental new cut and drop system, nutrients into grass, no disposal etc Pure water, no chemicals for window cleaning. Van s recycle and heat water on board for cleaning Reduced carbon footprint

11 Keith Burgess Head of Oakleaf & Support Services Wyre Forest Community Housing Limited (Part of The Community Housing Group)

12 Midland Heart Grounds Maintenance Tender Tender Grounds maintenance contract 3 year + 2 year option Fixed price contract years 1 to 3 (RPI years 4 & 5) Tender assessed on 70% quality & 30% price Quality assessment including KPI s & Social Responsibility Targets Setting the Scene Who are Oakleaf Grounds Services? Our philosophy & approach to the tender

13 Oakleaf Grounds Services Oakleaf is a brand name for the grounds maintenance operation, we re-branded in 2009 Part of Wyre Forest Community Housing Limited (WFCH) & The Community Housing Group, based in Worcestershire WFCH, a social housing provider with 5,500 homes, the Groups subsidiaries include: Worcestershire Telecare Wyre Forest Sheltered Housing, Care Services Vestia Limited (with responsibilities for training and social enterprise) Plus Property Services (former DLO) Group turnover circa 27m, with the objective of providing quality homes and local job opportunities

14 Oakleaf Grounds Services Brand Formally part of the repairs & maintenance section of Property Services, with a turnover in 2009 of circa 1.6m Employed approx. 55 staff with one notable external client with a contract value of 0.5m Embarked on an ambitious project to increase turnover by 50% in five years with the aim of creating the corresponding job opportunities Four years later Turnover 2.7m (up 68%), in year five predicted to be at least 2.8m (75% increase on 2009) Currently employing over 80 staff, 21 seasonal staff joined us in 2013

15 Oakleaf Grounds Services Oakleaf Ground Services objectives aligned with the Group s i.e. to provide quality services & to create job opportunities Expanded from one major external client to a portfolio of clients:- Housing Sector Midland Heart, WM Housing, Bromsgrove & District Housing Trust, Castle Vale Community Housing Association, Wyre Forest Community Housing Limited Commercial Clients Worcestershire County Council, Solihull MBC, BAM Facility Management, Galliford Try Facility Management, West Midland Reserve Forces & Cadets Association We regard the housing sector as our niche market

16 Tendering Experience Regularly competing with national companies ( 57m turnover), our Midland Heart competitor boasts a turnover of 14m (5x larger) Our knowledge of the housing sector, our job creation ethos & none for profit status has been a winning formula, especially with tenant procurement panels Understanding the environment of the housing sector & housing related jargon has been a huge advantage

17 Midland Heart Tender Tender divided into 17 lots, we tendered for 6 lots & were awarded all 6 lots Focus of our Tender Target to employ 25% local people from lot areas (TUPE!) Working in partnership with the client & sharing similar values & vision Identifying risk management issues Customer feedback & engagement promises Understanding the contract management framework under which Midland Heart operates Still required to be a competitive tender price (generally grounds is a high volume, low margin industry)

18 Oakleaf GS working with our own Vestia Training Brand Employment focus for the tender included: Oakleaf worked closely with our subsidiary Vestia Ltd, who provided resources & expertise Experience of the Backing Young Britain Programme (18-24 yr. olds) Using the Employability Skills Programme which includes work experience placement & a guaranteed interview Our work experience offer included coaching on interview skills, application form completion & communication, all linked to a City & Guilds accredited qualification Employment was targeted initially at people on our estates, but will be expanded to our clients 6 lots & estates Offering apprenticeship opportunities in - IT, Finance, Marketing, Horticulture & Building Trades

19 Summary Rapidly growing business competing with national & far larger companies The re-branding exercise has been successful & has helped us focus as a commercial business, while retaining our links as a social housing provider & landlord We have created job opportunities in both our own areas & in our clients areas, where job opportunities are less than plentiful We have provided an alternative to clients in offering much more than simply grounds maintenance & horticultural services We have not compromised on quality & service through the journey (ISO accreditation & membership of trade associations) Embracing social enterprise has been a winning formula for us

20 Procurement and Social Enterprise- Does social value equal value for money? NHF / SEUK Social Enterprise Conference Gayle Monk 23 rd April 2013

21 What will I cover? The core legislation on social value in procurement What does the Social Value Act say? Applying the Social Value Act to: o o achieve value for money procure from social enterprises

22 Core Legislation Procurement Consolidated Directive (2004) UK implementing Public Contracts Regulations 2006 Updated Directive (2013) Social Value Public Services (Social Value) Act 2012

23 Public Services (Social Value) Act 2012 The Act: covers public service contracts (including service contracts with a works or goods element) and frameworks for such contracts applies itself to the pre-procurement stage of the commissioning process requires that contracting authorities should consider how to improve the economic, social and environmental well-being of the area served by them through procurement and how to undertake the process of procurement with a view to securing that improvement requires that contracting authorities consider whether to undertake any consultation as to these matters Section 1 - Contracts of relevant authorities Section 2 - Relates to local authorities specifically provides that genuinely urgent situations do not require this exercise

24 In force Now! 31 st January 2013 It s time to think about: updates to policies and procedures any new policies needed this year s procurement exercises: what s on the cards?

25 Guidance Cabinet Office Procurement Policy Note: The Public Services (Social Value) Act 2012 advice for commissioners and procurers: Information Note 10/12 20 th December 2012 SEUK Guidance: Implementing the Public Services (Social Value) Act:

26 Key points on social value Policy is critical to social value being embedded in procurement Early scoping so the subject matter of the contract is clear greatly reduces any bases for challenge Provided that all evaluation criteria are properly disclosed to bidders, the use of economic, social and environmental requirements is entirely acceptable Don t use specified labels - technical specifications used should instead describe the underlying requirements A combination of contract conditions and award criteria are the best way forwards for social requirements Social requirements in contract specifications must be verifiable and tangible and clearly within the within the scope of what is being paid for. Including social and economic requirements in procurement is nothing new, but had a renaissance at the beginning of the century when new clarity developed around the ambit of the EU procurement rules, and the relaxation of local government rules on noncommercial considerations.

27 The Social Value Act and Value for Money Value for money: the optimum combination of whole-of-life costs and quality (or fitness for purpose) of the good or service to meet the user s requirement Or Maximising the difference made to people s lives

28 Not added value additional benefits secondary considerations Remember the importance of: Whole life costs, not just price Quality The user s requirement what you need, and what service users need

29 Sustainable procurement The Sustainable Procurement Task Force s definition of sustainable procurement is: a process whereby organisations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis in terms of generating benefits to society and the economy, whilst minimising damage to the environment Considering the whole life costs of a contract, including its social, economic and environmental impact. So social value is value for money

30 Social Value is Value for Money Choosing what you buy to maximise the impact of the money you spend o after suitable consultation to help you decide what to buy Don t look at social value as an added extra it is part of what you buy Be willing to pay for what you purchase if it s genuinely important to you But do look at ways of measuring outcomes, not outputs, to demonstrate the combined economic, environmental and social value for money of a contract

31 Procuring from Social Enterprises You can t restrict who bids for an EU procurement to social enterprises You can think about how you commission to maximise opportunities for social enterprises: o o o o o o Exceptions to the Regulations Part B Services, below threshold contracts, reserving contracts to Social Firms Pre-procurement consultation with the marketplace, with the community, with service users or tenants, with leaseholders? How and where to advertise the contract Prequalification sensible use of financial selection criteria that don t rule out social enterprises; keeping PQQs relevant to the contract rather than total reliance on a standard Tender stage offer a fair contract that balances risk keeping in mind that there may not be scope to negotiate Manage delivery in a spirit of partnership. Maintain and develop relationships with potential future partners - e.g. social enterprises that have been unsuccessful, but might be able to deliver in the future

32 If you have any queries or comments in social value or equalities in procurement please contact Gayle Monk of Anthony Collins Solicitors LLP on or