Level with us: Lords told social value must be 100% objective

The House of Lords has been exploring how public services can be bolder in ‘levelling up’ communities around the UK. Three experts told the Lords Public Sector Services Committee why 15% 'added value' isn't good enough.

Is it possible for public services to be commissioned on the basis of social value rather than simply lowest cost?

The UK already has a Public Services (Social Value) Act, which goes some way in compelling commissioners to consider the wider social, economic and environmental benefits of their purchasing decisions. Following Brexit, which released the UK from the EU’s procurement directives, the government now intends to introduce a Procurement Bill to make the UK’s public services commissioning regime simpler, quicker, more innovative and better able to meet the country’s needs. But will it also encourage commissioning to be more ‘purposeful’?

And could pandemic-inspired strategies such as the ‘levelling up’ agenda bring a fresh, ‘social values-led’ approach to the way in which commissioning across UK public services is driven?

An influential committee in the House of Lords has been exploring these issues with a range of ‘expert witnesses’, examining how the social value element in commissioning can be bold, robust and effective – and how the sense of purpose many feel should drive our public services might be measured, quantified and replicated.

Among those giving evidence to the committee recently were three experts who now share their thoughts with Pioneers Post readers: lawyer Julian Blake from Stone King, who has 30 years’ experience in social enterprise and public service reform; Ed Wallis, director of policy and engagement at Locality, the national network of community organisations, and Mat Ilic, chief development officer at Catch22, which has been designing and delivering public services for over 200 years.

Ed Wallis picEd Wallis: Locality

Locality, the national membership network for community organisations, recently published its Keep it Local manifesto highlighting the work it has been doing to bring together councils and communities, as well as transforming local partnerships.

“It harnesses the learning from our Keep it Local councils and their community partners, and shows how the powerful partnerships have charted a way through the coronavirus crisis and, crucially, provide a blueprint for recovery,” says policy and engagement director Ed Wallis.

“Our manifesto makes a series of policy recommendations and shows how central government can support this growing movement and make it a key means of realising its ambition to level up the country.

 “The answers we need to many of the complex problems we face can be found in local communities. But too often, bureaucratic commissioning and big outsourcing contracts prevent the power of community being unlocked. That needs to change. The forthcoming Procurement Bill can lead the way by making collaboration, not competition, the guiding principle of public services and support local authorities to commission high-quality services in their local communities.”

Too often, bureaucratic commissioning and big outsourcing contracts prevent the power of community being unlocked. That needs to change

Julian Blake picJulian Blake, Stone King

Julian Blake, from law firm Stone King, has specialised in social enterprise, charity, responsible business and Public Service Reform and Innovation for over 30 years.

He says it’s important to recognise that social value isn’t something new, but rather something charities and social enterprises have been practising for many years.

“Social value was not invented by the Public Services (Social Value) Act 2012,” he says. “As with many cases where the status quo catches up with the progressive, the bright light dims, as the established system absorbs the novelty.

“The problem for (not with) social value is intangibility, to which a general reaction is to try and translate it into something familiar. How does it monetise? Or be measured? But the intangibility is, properly understood, real world complexity.

This meaning is well-captured, at the macro-level, by Professor Mariana Mazzucato in The Value of Everything in which she advocates public policy led by ‘public value’. Explaining its meaning she asks: ‘What is the value of universal free state education?’. She answers (to paraphrase): ‘We know the cost precisely, from Treasury figures and we equally know the value is immense, multi-dimensional, exponential and immeasurable.’

“Social value, currently, is mainly seen as ‘added value’ – for example, an apprenticeship added to a construction contract; 15 per cent of a tender score; a selection from a list of possible offers, each with a generalised monetary value. Added value is good, but limited,” explains Blake.

 

 

“It misses the inherent social value in realising the core purpose of a public service: to meet a personal need; thereby to support a community; thereby to contribute to socio-economic advance.

“The 2012 Act successfully introduced ‘social value’ into common currency. This has led to every local authority having a ‘social value policy’, some of which are excellent, and now to government adopting the phrase.

“The Social Value Portal has become the source-book, through impressively detailed work that has gone into its National Social Value Measurement Framework, comprising ‘Themes, Outcomes and Measures’. But this product slots too easily into a conventional procurement process and the entrenched failings of UK public procurement too easily take over.

In public services social value is not a 15% element; it is the 100% objective. It needs a whole new commissioning methodology built around it

“Procurement of a service contract is only one commissioning tool,” argues Blake. “Commissioning of public services is a multi-faceted, complex, professional discipline.

“Commissioning can reach for multi-sector, multi-stakeholder community partnerships, driven by the purpose of optimising services. In public services social value is not a 15% element; it is the 100% objective. It needs a whole new commissioning methodology built around it.

“Social value imperatives should be the pre-requisite of any organisation being a provider of Public Services: is purpose central to the provider? Are the individuals engaged in the service dedicated, energetic and well-managed? Is pricing based on fair, reasonable surplus, not extractive profit? Is there a collaborative spirit and an essential focus on the best interests of service recipients?”

Mat Ilic photoMat Ilic, Catch 22

Catch22 is a not-for-profit business with a social mission that has designed and delivered services for over 200 years.

“As charities and mature social enterprises have increasingly taken on the delivery of public services, they’ve had to compete, with commercial businesses on very unlevel playing fields,” says chief development officer Mat Ilic.

“We’re delivering in a highly competitive marketplace with thin margins and often without the backing or trust that is so often placed in the corporate sector. The pandemic has demonstrated the agility, flexibility and ultimately the ability of voluntary sector organisations to deliver effective public services without being burdened by the bureaucracy and inertia which so often inflicts the public sector or the drive to extract value which often underpins the motivation of commercial providers.

“Now is absolutely the right time to be re-assessing the way public services are procured and delivered – to ensure high quality provision that has intrinsic social value which delivers a sustainable return on investment.”

Now is absolutely the right time to be re-assessing the way public services are procured… to ensure… a sustainable return on investment

Ed Wallis of Locality agrees: “Local authorities we have spoken to recognise they might not have always placed appropriate value on community power in the past – but they certainly do now after the experience of the pandemic. We’ve heard over and over again how councils are looking at communities in a different light, with increased respect for their work and understanding of their skill. Their role has changed from being the commissioner and controller of activity, to being its convenor and supporter; plugging in resource to things that are already working well and helping them go further and faster.

“What’s more, councils know the local partnerships that have developed are not just critical to their ongoing crisis response, they are fundamental to what comes next. Indeed, what we have seen, in effect, is levelling up in action: local areas working creatively to harness the skill, innovation and talent they know exists in their communities to drive their neighbourhoods forwards.”

What we have seen is levelling up in action. Councils know local partnerships… are not just critical to their ongoing crisis response, they are fundamental to what comes next

 

The evidence session with the Lords Public Services committee took place in June. Stone King will this week host a webinar looking at how successful public and private sector partnerships can be forged, as part of a series of initiatives by E3M, a ‘leaders club’ which supports the growth, impact and influence of mature social enterprises in delivering public services.

Public Benefit Partnerships for Children’s Services takes place on July 8, and will explore alternative ways of developing service provision to provide better services and better value for the public purse. It will look at the groundbreaking Children’s Innovation Partnership created by Leicestershire County Council and Barnardo’s and the work of Kibble, one of the UK’s most successful social enterprises. See here to book or for more information.