Supply Change — a practical response to social value in public sector procurement

Orbit, the UK’s leading developer of new homes for affordable and social rent, has invested in a new social procurement startup. Supply Change is part of its ongoing commitment to supporting social enterprises in their supply chain.

In this article, Supply Change’s co-founder Beth Pilgrim, explains how Orbit aims to provide a practical solution to the need for more social value in public procurement and how housing providers can be a key conduit for social enterprise development and growth.

Recent months have seen a concerted effort by the Government to keep the issue of social value in public procurement on the agenda. In August 2018, the Civil Society Strategy laid out plans to strengthen the Social Value Act and in March this year, the Cabinet Office published a consultation on how government should take account of social value in the awarding of central government contracts. Currently public sector procurers are expected to award contracts to the most economically advantageous tender.

These legislative changes aim to ensure that social value is also accounted for, considering the impact of procurement on the well-being of individuals, communities, social capital and the environment.

The policy developments are good news for the UK’s social enterprise sector, businesses delivering goods and services across the country whilst impacting a range of social or environmental causes. This is done through reinvestment of their profits or providing employment opportunities within their own businesses. Social enterprises often face barriers to bidding for and winning public sector contracts, so giving greater weight to social value in the procurement process will strengthen their case.

However, legislative change is only one part of the solution. A shift towards a culture of social procurement will need to be supported by a commitment from public sector buyers to diversify their supply chains, and simple and effective technical solutions to ensure this is carried out in day to day procurement practices.

In addition to a change in policy, social enterprises need better visibility and accessibility to public sector buyers to ensure they can compete on a level playing field with large contractors for government work. This was one of the key findings from an in depth research project carried out by Supply Change in early 2018.

Current procurement platforms and processes are difficult for social enterprises to access and showcase their work alongside larger contractors.

Speaking to over 60 stakeholders across the social enterprise and public procurement sector, we identified that current procurement platforms and processes are difficult for social enterprises to access and showcase their work alongside larger contractors.

Procurement frameworks and portals used by public sector organisations are suited towards larger tenders and are not tailored towards social enterprises. We found that there was a ‘sweet-spot’ of opportunities for social enterprises to deliver small to medium sized contracts that are often not externally advertised by procurement teams and so are hard for them to access without knowing the right people or being on an existing framework.

A change in attitude towards innovation and new ideas is also needed. Whilst many public sector procurement teams are looking more closely at the social value element of their contracts, finding suppliers who can deliver social impact and meet the requirements of tenders can be difficult. There is a gap in the market for a service that can provide public sector buyers with the information and assurances they need to engage with social enterprises.

This is where Supply Change comes in. Our platform aims to showcase verified social enterprises and connect them to public sector contract opportunities. All social enterprises listed on Supply Change have gone through a due diligence process to ensure their contract-readiness for the public sector. Procurement teams can browse the platform to find suppliers by location, service and area of impact. By providing visibility and reducing risk, we hope to unlock the potential social value of public sector supply chains.

Our work has been supported by Orbit from an early stage and this has now been solidified by Orbit investing directly in Supply Change. Alongside financial support this partnership has allowed us to test our product with Orbit’s internal procurement team and is an example of how Housing Associations can be a key conduit for social enterprise development and growth.

Housing providers exist to empower communities and help them thrive, working with social enterprises, many of whom are positioned at the heart of these communities makes perfect sense.

Engaging with local social enterprises can lead to job creation which means sustained tenancies and reduced isolation. Whether it’s through social investment initiatives like CIP, or partnering on regeneration projects, Housing Associations can help social enterprises scale up at a much faster rate than they would otherwise achieve on their own. We believe that Supply Change can be the catalyst to make this happen.

The Supply Change team is looking for founding partners across the housing sector and local government to join Orbit in supporting our work. To find out more, head to www.supplychange.co.uk or get in touch directly at beth@supplychange.co.uk

Beth Pilgrim is the CEO and co-founder of Supply Change