The Public Services (Social Value) Act 2012 became law on the 8th March 2012 and went live 31st January 2013. Public sector now have to consider social value as part of any procurement. Not just value for money (cost and quality). So now you may have to respond to social value tender questions when bidding for public sector contracts.
What is Social Value in Tendering?
The Act requires authorities to make the following considerations at the pre-procurement stage:
- How what is proposed to be procured might improve the economic, social and environmental well-being of the “relevant area”
- How in conducting a procurement process it might act with a view to securing that improvement
Some tenders have method statement questions on what social value you will provide. Others have social value calculator Excel spreadsheets to complete (see below).
Some public sector tenders completely ignored social value when tendering! But the Government’s latest measures (below) reinforce the need to include social value in tender evaluation.
Some tenders weight social value as high as 10-30% of the total possible score! So, there can be a lot at stake.
Social Value Tender Questions
Social value tender questions can appear daunting at first. But once you start to understand social value, they become a lot easier. These types of tender questions can also help local businesses to score higher than non-local competitors. The reason is that they are already contributing to their local “relevant area”. For example:
Economic – employment, training and work-experience opportunities for local people.
Environmental – local staff, local suppliers and local work reduces your carbon footprint.
Social – supporting local community initiatives e.g. charities, local amateur sports teams etc.
Many of the terms used by councils and government can be confusing: “social integration and community cohesion” and “community development and engagement“. But in fact most of it is common sense. Here are some typical areas for social value and how you might respond:
Relevant Area
This simply means that what you offer must be in the area covered by the contract. For example, a company in London bidding on a Birmingham City Council tender must provide social value in Birmingham not London.
Economic
- Local jobs created and sustained
- Apprentices
- Work placement schemes for schools and colleges
- Local school and college visits e.g. careers talks and mentoring, safety talks, curriculum or literacy support
- Training opportunities e.g. your own staff, work-experience and customer staff
- Taking people out of unemployment
- Reducing the disability employment gap
- Employing veterans
- Tackling workforce inequality
- Providing career advice and/or mentoring
- Using local suppliers, voluntary groups and agencies
- Promoting social value in your supply chain e.g. using suppliers who operate apprenticeship schemes, have ISO14001, tackle modern slavery etc.
- Supporting COVID-19 economic recovery
Environmental
- Reducing carbon footprint/pollution and improving air quality e.g. electric cars, reducing mileage, energy-efficient equipment
- Decreasing congestion e.g. car-sharing and cycle to work schemes
- Minimising waste e.g. re-use and recycling
- Using environmentally friendly goods
- Saving energy and resources e.g. energy efficient lighting and equipment, saving water etc.
- Sustainability e.g. FSC timber products
- Operating an ISO14001 environmental management system or similar
- Helping improve public spaces e.g. parks
Social
- Supporting local charities
- Helping local community groups (e.g. amateur sports clubs or social groups) – financial or any other support
- Ethical suppliers e.g. Fair Trade
- Community engagement e.g. involving local residents
- Promoting social integration e.g. work opportunities for disadvantaged people
- Supporting local culture and heritage
- Hosting community events
- Volunteering
- Supporting a healthier community e.g. promoting staff well-being, flexible working policies for staff
- Helping vulnerable people to live independently
- Supporting local crime reduction
- Helping to reduce homelessness
- Helping communities recover post COVID-19
These are only some examples of social value. You can expand this list to hundreds more similar activities.
Involving your supply chain in providing social value can also help you gain more points when answering tender questions.
Social Value Developments
Some public sector tenders completely ignored social value when tendering! So, the Government set out to remedy this.
New Social Value Model
On the 24th September 2020 the Government announced new measures to reinforce the need to include social value in tender evaluation. As opposed to “consider”, authorities must “explicitly evaluate” social value (if reasonable and proportionate for that procurement). See Procurement Policy Note 06/20 (PPN 06/20). This applies to all procurement covered by the Public Contracts Regulations 2015.
For central Government department tenders, Social value must have a minimum weighting of 10% to ensure ‘heavy enough score to be a differentiating factor’. It can be higher if justified. I’ve now seen it as high as 30%! I’ve also noticed that all other public sector tenders (council etc.) now include social value weighted at least 10%.
PPN 06/20 introduced 5 new social value themes:
| Theme | Policy Outcome |
| COVID-19 recovery | Help local communities to manage and recover from the impact of COVID-19 |
| Tackling economic inequality | Create new businesses, new jobs and new skills Increase supply chain resilience and capacity |
| Fighting climate change | Effective stewardship of the environment |
| Equal opportunity | Reduce the disability employment gap Tackle workforce inequality |
| Wellbeing | Improve health and wellbeing Improve community integration |
It’s worth looking at PPN 06/20 to see Annex A – Themes and Outcomes. It gives good examples of delivery objectives and what good looks like.
In December 2020, the Government introduced The Social Value Model. This sets out more guidance on how to answer social value questions.
National Procurement Policy Statement
In June 2021, the National Procurement Policy Statement was published by the Government, PPN 05/21. It states:
Contracting authorities should “consider” the following social value outcomes alongside any additional local priorities:
- Creating new businesses, new jobs and new skills in the UK
- Improving supplier diversity, innovation and resilience
- Tackling climate change and reducing waste.
These reflect the UK Government’s legally-binding target to reduce greenhouse gas emissions to net zero by 2050 and the need for post CV-19 recovery. Whilst this is separate to social value, the three themes are covered by social value. So, we will see these in some social value tender questions.
The procurement law team at Mills & Reeve have a good post explaining the changes.
TOMs, Social Value Calculators and Measuring Social Value
Many Councils and public sector bodies have started to use a more formal way to assess bidders’ social value impact. These are called “TOMs” which stands for Themes, Outcomes and Measures.
Typically, the tender will include the authority’s published social value aims and you will be asked to state exactly how you will support these locally. In addition to general activities, you will need to commit to firm numbers. For example, how many man-hours of attending local schools or colleges to deliver career talks or advice.
Tender submission documents can include a table or social value calculator (spreadsheet) which has a detailed list of social value activities. Against each category, there will be a financial value. You then add the amount of commitment to any activity that you can support. This calculates your bid’s social value in monetary terms. For example: 3 weeks of work placement for a local student at £100 per week = £300.
TOMs is run by the Social Value Portal which has lots of free information.
Social Value in Salford also has some useful information on measuring and evaluating social value.
Preparing for Social Value
Use the above lists and/or TOMs to measure what social value you currently offer. Then use those to assess what more you can do for the authority’s tender you are bidding on.
Research your prospect and understand what social value elements are most important to them.
Download their social value policy. Look at any social value news or procurement social value requirements on their website.
Attend any supplier engagement events. These will help you understand if the Authority has any social value preferences e.g. employment, apprenticeships etc.
If you do not have a live tender but plan to to bid for a contract in the future, start thinking about what social value you can provide. And how. There is no guarantee what your next tender will ask for (there is so much variance between ITTs). But you will have done some of the work without the pressure of a deadline.
For example, you may consider implementing a Carbon Reduction Plan (CRP). See the Cabinet Office’s PPN 06/21 Taking Account of Carbon Reduction Plans in the procurement of major government contracts. It has a template for CRP. Or you may look at gaining ISO14001 for your environmental management system.
Answering Social Value Tender Questions
Initially, social value questions asked about what social value initiatives you have undertaken. The Social Value Model changed this. Nowadays, buyers are looking to understand what specific social value you will provide for their contract / region and when. They also want to know how you will measure and report on whet you are doing. The TOMs Social Value Calculators above are a good example of this.
The recent Government updates (above) are confusing. They are confusing some public sector buyers too! But the new ‘themes’ still mean economic / environment / social. So, just answer the questions(s) in the tender using the following approach.
When answering social value tender questions make specific commitments and explain:
- What you will do in the authority’s ‘relevant area’
Explain each different activity you are offering.
If appropriate, explain impact of each different activity. - How much you will do
What quantities / values are you offering?
- Over what time period
When will the activities be delivered / achieved?
Per annum? Over the contract duration? - How you will measure achievement
How you will prove that you have met your targets?
Who will be responsible for ensuring this? (e.g. social value champion)
Corrective actions if not on target. - How you will report this
What format, period etc. are you suggesting?
For example: Number of staff hours spent on school and college visits (e.g. delivering careers talks, curriculum support etc.) per annum, in the locality relating to their contract. Social Value Champion will provide annual reports showing number of visits, names of schools and dates.
As explained in this guide on answering tender questions, you must respond specifically to their questions. Not just give them your preferred social value activities. We’ve seen plenty of social value questions that don’t ask about all 3 aspects of social value e.g. just asking about apprenticeships and employment. Also, do your research on what is important to the buying authority. For example, Bristol has very clear and challenging environmental ambitions so providing an electric car for for your staff to travel around the City may hold more value to the Council than other social value provisions.
We’ve successfully helped 100s of organisations with social value. If you need help with answering tender social value questions, contact us.
Summary
You have to look outside some of the confusing terms. Most businesses are already doing many of these activities and therefore contributing to social value.
Consider what you can do specifically in the buying authority’s local area. Understand what is important to them. Then be clear on what, when and how much you will do if you win the contract. Then explain how you will monitor and report on your activities.
Does anybody have any other ideas or thoughts on answering social value tender questions?
Hello
Good site thank you. I saw some advice for submitting tenders which suggested firms should promote their local presence and therefore local impact to gain a higher score due to the Social Value Act. This is understandable advice as the SVA Act does require an authority to consider the impact on the are they operate in. However the tension in the process is that that the authority cannot discriminate in favour of local firms, a firm from Ghent should (in theory) have as much chance of winning a contract with Durham Council as a firm located in Durham. Therefore the council could not openly score a local firm higher, unless that local firm indicated they were providing higher value independent of where they were located. I think I would just caution against a locally based firm pushing their location as part of the reason they should be contracted with, they would be better to focus on the requirement of the council and how they can add value, leaving the locality as a sort of obvious advantage sitting in the background. Hope this makes sense.
Thanks for this Tom, excellent point.
Just to clarify my thoughts: a business bidding for a contract in its locality should be able to offer decent evidence of social value relevant to that contract e.g. employing local staff, offering local apprenticeships, using local suppliers, supporting local charities etc.
On the flip side, smaller businesses bidding for contracts outside of their local area can find some of these things harder to offer compared to a larger firm (e.g. regional or national supplier) who may already be operating in the area.
You are quite right that being a local supplier means nothing until benefits of being local are demonstrated.
Hi,
Im just doing some research on how best to answer social value-related questions in tenders. I am starting to see them in virtually all tenders received.
We are a medium sized manufacturer in the waste industry in the West Midlands, supplying to the majority of local authorities throughout the UK.
We have no local activity; all our employees are in the Midlands. Our supply chain is widespread including overseas. How do we best answer questions along the lines of how do we support the voluntary and community sectors; promoting local employment and sustainability etc.?
Is there a resource I could go to or training available that could help me with this?
Thanks,
appreciate any comments you may have
Hi Jackie
That’s an interesting question. Where companies face this issue, I normally recommend actively targeting social value activities that the company can achieve. For example, working with schools and colleges to offer talks on manufacturing, helping local voluntary/community sectors and looking for any other things that you don’t do but can. Depending on the size of contract, you may be able to fund local SV initiatives; some businesses pay towards the costs of council’s apprentices and/or fund events.
You also need to re-examine what SV you are doing as some activities will affect each local authority e.g. low-emission vehicles creating less pollution in the borough, do you have suppliers in that borough (or will you seek to engage with them.
Hopefully these examples help. I would expect that most of your competitors face the same issue which might reduce the impact of what seems a weakness.
I’ll email you so you can contact me if you want to discuss this further.
Regards, Tony
Thank
Hi,
Very interesting article. How much should the company invest in social value? 1%3%, 10% of the value of the contract?
Thanks.
Good question but there’s no definitive answer. You need to look at each individual tender and understand the evaluation criteria.
Some tenders don’t even ask about social value whereas others give it a very high weighting.
Really interesting feedback, on a requirement that is been sought after more and more.
I’m struggling to put a method statement together for SV .
Do you have any suggestions or examples.
Regards Joe
Hi Joe
This explains a general approach to writing method statements. Some of it has relevance to SV.
For SV, you need to be clear what you’ll do for them e.g. what, how much, what result and when.
Feel free to get in touch if you require help, we do quite a bit work supporting clients with SV.
Regards, Tony