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Since the Social Value Act was introduced in 2012, public bodies have had the legal obligation to consider and demonstrate the value they are delivering to the communities they operate in when procuring. The question of how to measure this value is undoubtedly complicated. A number of frameworks exist to help with the process. If you are working on social value for a public sector body, then picking the right framework for your organisation can add another layer of complication. Each framework has different advantages depending on your goals. Ultimately, the choice of social value measurement frameworks depends largely on a public body’s reason for measuring and the needs of the community it operates in.
Reasons for Measuring Social Value
Assessing which social value framework is most suitable for an organisation is always a tailored process. It depends on their goals and motivation i.e. why does your organisation want to measure social value? Some of the most common goals for an organisation to measure social value include:
Maximise social value in communities they operate in
Accountability of social value commitments of the organisation and their suppliers
Guide to better decision making around community investment
How to measure — Attributes of Frameworks
It is also important to understand and consider the different attributes that measurement frameworks have. We have identified four main attributes among common social value frameworks:
Project-wide / Organisation-wide: Project-wide frameworks are designed to evaluate one-off projects. Most organisations, however, aim to measure social value at an organisation-wide angle.
Evaluative (looking backwards) / Forecast (looking forward): In the context of procurement bids, social value assessment is often forward-looking. For organisation-wide measurement, evaluative-oriented frameworks are more commonly used and applied on a regular basis (e.g. quarterly evaluation, annual evaluation).
Non-monetary / Monetary: Non-monetary indicators are closer to the data collection output and therefore easier to process. However, when comparing metrics, monetary values can be useful.
Sector-specific/General: Some sectors have had dedicated social value frameworks developed, which are tailored to the needs of the industry. However, not all sectors are privileged with a dedicated social value framework measurement. In which case, a sector-specific framework will be transposable to other sectors, or a general framework can be chosen.
What to measure — What are your community’s needs?
“We mean ‘value’ not in its narrow [financial] sense but in its true sense — recognising the importance of social, environmental and economic well-being across our communities and in our lives.” Chris White, MP behind the Social Value Act, NCVO (2019)
Social value can be understood as the need for both the purchaser and community it operates in, to gain value. In order for a public sector body to create social value, it is essential to determine what challenges the community is facing, and what’s needed to overcome them.
In order to do this effectively, public bodies should integrate non-traditional procurement team members such as community needs assessors so there is expertise capable of determining these needs.
Including the community’s needs can spark questions like what should we measure and to what extent can we demonstrate our responsibility for a given impact?; What kind of timescales are we working towards so we can measure effectively? Which time markers are relevant as references to evaluate in hindsight or forecast for the future?
For public bodies, value creation “occur[s] at the end of the value ‘chain’, e.g. when people’s lives improve (outcome rather than output), potentially many years after the policy was enacted.” Mazzucato and Ryan-Collins, 2019
Having a cross-functional team can provide answers to these questions.. Taking a look at the current practices and frameworks (which are mentioned a bit later) gives us inspiration on what should be measured. Generally, five themes of community needs emerge from existing social value frameworks:
Health and wellbeing (including physical and mental health needs)
Inclusiveness (relating to gender, disability, ethnic minorities)
Engagement with the local community (through employment opportunities, working with local suppliers, being involved with local associations)
Respect for the natural environment (usually labelled as “environmental impact”, generally related to waste management)
Security (including addressing issues of modern slavery and cybersecurity)
“Social value is the quantification of the relative importance that people place on the changes they experience in their lives. Some, but not all of this value is captured in market prices. It is important to consider and measure this social value from the perspective of those affected by an organisation’s work.” Social Value UK (2019)
Where to start and what is out there?
In order to understand which framework works best for your organisation, it’s worth looking at what’s already out there. Social value measurement frameworks currently widely used are:
Social Value Portal / The National TOMs Framework
The HACT Value Calculator
The Cabinet Office frameworks, from the March 2019 consultation
The Social Return on Investment Framework
Social Profit Calculator
Each of these frameworks is suited to different goals. For instance, the National TOMs are predominantly more suited to generic goals and needs, while the HACT Value Calculator provides better metrics for environmental concerns, Supply Change recently teamed up with the OR Society and Operational Researcher, Solène Huynh, from the University of Strathclyde to gain a detailed understanding of the key things organisations should consider when choosing a social value framework.
If you would like a more detailed comparative understanding of the four frameworks mentioned in this blog, you can view the report here.
Need help picking a social value measurement framework? We can help. Get in touch with the team for an initial assessment.
Or if you are interested in working with Supply Change on other social value research projects get in touch on hello@supplychange.co.uk”
Author of report - Social Value Measurement Framework for Public Procurement: A Comparative Analysis
Solène Huynh
After obtaining a double MSc in Management in France and in the United Kingdom, Solène is now pursuing a PhD in Operational Research to investigate how decision-makers’ interpretations of uncertainties orientate organisational learning. Prior to this, she participated in the development of a start-up dedicated to community value creation through corporate volunteering programmes, and worked as a consultant at IBM.
When she is not studying for her PhD, Solène is interested in the way social value concepts are defined and operationalised, reads philosophy, plays board games and impressionist music.
After registering with the OR Society Pro Bono programme, Solène came to know Supply Change and their mission to support procurement teams in choosing suppliers that foster social value.