Guest blog: VCSE organisations in Greater Manchester and ‘social value’ – it’s what they do
In this guest blog, Anne Lythgoe, Director of the Social Audit Network, highlights how Greater Manchester’s VCFSE organisations embody ‘social value’ as their core purpose.
While the 2012 Social Value Act aimed to achieve broader social outcomes, its focus on metrics has often sidelined the sector’s intrinsic contributions. Anne calls for a strategic approach that values the role of VCFSE organisations in fostering wellbeing, environmental improvements, and community benefit, moving beyond transactional models to deliver meaningful change.
People don’t buy what you do; they buy why you do it. And what you do simply proves what you believe.
― Simon Sinek, Start with Why: How Great Leaders Inspire Everyone to Take Action
‘Social value’ is a broad term coined in the 2012 Public Services (Social Value) Act which introduced the concept of public services having regard to securing wider social, environmental and economic outcomes beyond the core service, work or product being bought.
The implication from the Act was that ‘social value’ was something new and something extra (and something that could be ‘bought’) – and this very short piece of legislation led to a proliferation of social value measurement and procurement support tools aimed at making it easy for public bodies to buy social value.
More than 10 years on and the motivations for the Act, beneficial societal outcomes, which drew cross party support at the time, have been forgotten in the race to force ‘social value’ into a spreadsheet cell for counting or assigning it a £value.
I have 3 major concerns about where the Act has taken us:
Public authorities are discriminating against some suppliers.
If ‘social value’ is seen as a bolt-on addition in the public sector procurement function, then that surely discriminates against all those charities, social businesses, co-ops, social enterprises etc, for whom ‘social value’ is why they exist and what they do?
This fact has been academically proven – Hamilton[1] finds that the TOMs™ model fails to account for the inherent social value embedded in public-purpose organisations and that financial proxy values are being strongly contested. Put simply, voluntary, community, faith and social enterprise (VCFSE) organisations are losing opportunities because their inherent social value does not fit within the standardised TOMs™ measurement system used by many public sector organisations.
In a less rigorous experiment, I looked at the Greater Manchester Social Value Framework and could easily see that ‘social value’ is absolutely part of the day-to-day work of the VCFSE sector. Fairer talks about volunteering, community projects, tackling poverty, and many more actions which could be part of the core purpose of a VCFSE organisation (but not necessarily a private business). Greener talks about environmental improvements, planting trees, creating community gardens, community energy generation and recycling – with many of the links provided going direct to a VCFSE body. More prosperous includes skills and good employment, as well as payment of the Real Living Wage, all of which are often key principles used in the running of a VCFSE organisation.
As the Charity Commission Guidance[2] points out –
“Public benefit is what makes charities different from other organisations. If ‘social value’ includes people’s wellbeing, then I would argue that public bodies cannot achieve this without the intelligence, insight and partnership of VCFSE organisations which are actively supporting people in diverse communities across GM”.
Public authorities are missing the point by thinking of ‘social value’ as something that is purely transactional.
Thinking about ‘social value’ at the procurement stage of any project or programme is too late to achieve real lasting benefit. Too often I have been asked to discuss ‘our approach to social value’ with commissioning colleagues when what they mean is ‘how should we phrase the social value question in this contract?’
At the time of the Social Value Act, local authorities had what was known as the ‘wellbeing power’[3] (sadly now withdrawn for most), which enabled Councils to incur expenditure, provide staff, goods or services to any person, enter into partnership arrangements and carry out the functions of other bodies to secure ‘wellbeing’ for the area under their authority. This power was replaced by the less specific ‘General Power of Competence’, which allows them to do ‘anything that individuals generally may do’.
By forcing ‘social value’ into a specific and measurable part of procurement, we have lost the more principled, outcomes-based approach that was originally envisaged, which embeds social value in place-making and strategy.
Public authorities aren’t consistently using their own guidance in the way it was intended.
The 2022 version of the Treasury’s Green Book, which provides guidance on how public authorities should appraise, monitor and evaluate their programmes talks about ‘social value’ in these terms –
‘The appraisal of social value, also known as public value, is based on the principles and ideas of welfare economics and concerns overall social welfare efficiency, not simply economic market efficiency’
The Green Book describes a process of appraising programmes and projects before a decision is made to implement. Appraisal is a process of assessing the costs, benefits and risks of alternative ways to meet government objectives. It helps decision makers to understand the potential effects, trade-offs and overall impact of options by providing an objective evidence base for decision making. Understanding the likely social value (public value) is a key part of this appraisal, which is done before a decision is made on how to implement a proposal.
So, I am now musing over the following conclusions:
- Instead of always being ‘additional’ can ‘social value’ be embedded into the main subject matter of the contract specification? (and therefore, NOT a blanket percentage of a tender score)
- If ‘social value’ is additional, can it be better prescribed / specified for a specific contract – rather than left to the provider to make an offer?
- If the contract is aimed at a market of VCFSE providers, then does a social value question need to be asked?
Adopting a strategic approach to ‘social value’ could also open the door to the work of the VCFSE sector, reducing the likelihood of their work becoming marginalised and discriminated against in procurement exercises. If ‘social value’ includes people’s wellbeing, then I would argue that public bodies cannot achieve this without the intelligence, insight and partnership of VCFSE organisations which are actively supporting people in diverse communities across GM.
And there’s also a message that needs to go out to VCFSE organisations.
“People don’t buy what you do; they buy why you do it. And what you do simply proves what you believe”.
In other words, have confidence in the value of what you do – and find ways to actively ‘sell’ the story of what you do and the difference that it is making.
[1] 2024 PhD Thesis University of Manchester
[2] Charity purposes and rules – GOV.UK (www.gov.uk)
[3] 2000 Local Government Act
Thank you Anne
Find out more about the work of the Social Audit Network.
Find out about 10GM’s Social Value work
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