Social value is proving to be an ever-increasing part of corporate social responsibility within the procurement process. 

The Public Service (Social Value) Act 2012, was introduced to transform how public money was spent, calling those who commission public services, such as public sector revenue contracts or capital projects, to consider how wider social, economic and environmental benefits could be secured.

The Act placed a legal requirement on commissioners to award public sector contracts based on cost, prior experience, and how they could deliver additional social value to the communities they serve.

8 years on, we see the evidence of the growing importance of social value, now accounting for around 20% of bid and tender evaluations.

Whilst the new policy does not make it compulsory for local clients and businesses it does, however, emphasise the importance of social value-driven projects and calls for local clients to start getting serious about delivering real social value in partnership with communities to “build back better’. 

Sarah Coughlan, Chief Operating Officer here at SPC says that this new policy is an ‘opportunity for local businesses and communities as well as governments to take seriously and do good in communities, especially locally.’ 

New measures as we enter the new year

From 1st January 2021, new rules will be put in place for procurement in relation to social value. A joint team from Cabinet Office and the Department for Digital, Culture, Media and Sport (DCMS), and Voluntary, Community and Social Enterprises (VCSEs) have designed a social value delivery model for central government buyers drawing on examples of best practice in local government. 

Currently, social value is only required to be ‘considered’ in central government procurement. However, with the new measures coming into force at the start of the new year, social value should now be ‘explicitly evaluated’ where the requirements are related and proportionate to the subject-matter of the contract. 

Sarah Coughlan believes this is a big move forward in embedding social value in procurement on central government contracts. She commented, ‘we await the detailed guidance, but look forward to seeing central government move towards standard award criteria, delivery objectives that describe ‘what good looks like’, and metrics for contract management and reporting. 

What good looks like

This new government model inspires people to adopt a renewed focus on ‘what good looks like’ in the policy note. The new model has a focus on COVID-19 recovery improving work conditions and helping those unemployed due to the pandemic which in turn increases social value generated.

Social value is often met with the suspicion that the numbers aren’t completely reliable as it is oftentimes unclear how the figures are calculated. This new policy, however, signals a real opportunity to develop better-defined data, therefore creating a clearer understanding of the social value delivered and its statistics. There are now also more widely accepted benchmarks endorsed with historical data, forging an opportunity to build more trust among clients and contractors alike. Something we have seen repeatedly from our clients is a sincere desire to “positively disturb” the way that pounds-and-pence figures are applied to the social value of a project.

As the policy note suggests “consistency means the process for defining social value will be standardised. It provides a clear, systematic way to evaluate these priority policies in the award of a contract.” This is vital for the whole industry. 

The new policy also fits in with the wider government agenda as Boris Johnson says he has a mission to unite and ‘level up’ the UK, improving the construction part of the agenda. This will also play a key part on the agenda since the big hit to the construction world due to COVID-19. 

Keeping social value local

The policy note also stresses that clients will be free to target their social value requirements to the communities they reflect. In order to make the most of this, clients and constructors alike will need to renew their focus on engaging with local communities to deeply understand their real, rather than perceived needs, which will allow them to recover from COVID-19 together. 

Without this engagement, the risk is that social value is reduced to just a box-ticking exercise and not a factor that will actually help create a strong sense of social purpose with the potential to enhance community resilience. 

Targeted social value programmes should become the new industry standard in order to grow social value and truly make an impact to unite and level up the country while keeping local communities and businesses firmly at the heart of the recovery. 

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FOLLOWING a sustained period of growth, Social Profit Calculator has announced the appointment of Sarah Coughlan as chief operating officer. 

Social Profit Calculator is the only UK software platform accredited by both Social Value UK and Social Value International. Led by a team of experts, the organisation provides a range of services to help businesses and public sector organisations accurately measure the social value they generate.

Sarah joined Social Profit Calculator in 2018 as a front-end developer working on the technical development of the organisation’s products and has since worked her way up to head of development. In her new role as chief operating officer she will be working with industry leaders on integrating sustainable methodologies for social value into built environment practices. 

She said: “The importance of social value has been growing over recent years, particularly within the built environment sector, and we’re of course still feeling the impact of COVID-19 at present, so I’m thrilled to be moving into this new role at what is a really interesting point in time.

“As an organisation, we were really pleased to see the government’s new measures for social value announced last month. In the wake of COVID-19, people will need to see the impact of every pound invested and these new measures will mean that central government will – from 1 January 2021 – need to go further than the Public Services (Social Value) Act 2021 to ensure that all major procurement explicitly evaluate social value, rather than just consider it.

“I’m very much looking forward to getting started in this new position and working with the wider team and organisations throughout the industry to make a real, demonstrable change in how we view and measure social value.”

The organisation’s Social Value Reporting Software calculates the social, economic and environmental impact of a project using a number of government-approved analysis frameworks including Social Return on Investment (SROI), environmental impact, LM3, GVA and asset value. Its database of more than 6,000 outcomes achieves a level of unmatched accuracy.

Executive chairman and chief executive officer Gerard Toplass, who is also executive chairman of national framework organisation Pagabo and software solutions organisation Sypro, said: “Since joining the company, Sarah has shown dedication to our customers, the team and the product development that sets us apart from other organisations, so we’re really pleased to be announcing her appointment as COO.

“I look forward to working closely with Sarah, the board and the rest of team as we look forward and work with the wider industry to embed social value at the heart of all built environment endeavours.”

At the same time as Sarah stepping into this new role, Social Profit Calculator’s co-founder Mark Bolger will be standing down from day-to-day operations but will stay involved in the company as a shareholder and contributor. 

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The fashion industry is a perfect illustration of how embedding principles of social value across the entire supply chain and whole lifecycle of a product can expose both the positive and negative outcomes resulting from their manufacture, from cradle to grave.

Last week saw Oxfam’s drive to create a movement of secondhand shoppers come to a close. The Secondhand September campaign asked shoppers to pledge to only buy secondhand clothing for 30 days or more. Last year’s campaign saw 62,000 people pledge to take part, many of whom have continued their thrifty habit. And, 2020 is set to be a record-breaking year. 

Since 2018, there has been a 404% year-on-year increase in the sale of secondhand clothing in the UK. Over two-thirds of shoppers are now choosing to shop at charity shops or secondhand clothes apps. The COVID-19 pandemic seems to have accelerated this shift in consumer behaviour with eBay UK reporting that there has been a 30% increase in secondhand clothing sales in June 2020 compared to March, and 1,211 % more sales at the same time in 2018. 

But why is this important? 

The social and environmental impact of the fashion industry is eye watering. It’s one of the most polluting industries in the world, producing 92 million tonnes of waste, using 79 billion cubic metres of water and 15,000 different types of often toxic chemicals, releasing 190,000 tonnes of ocean microplastic and emitting 4-5 billion tonnes of CO2 annually. Inefficient trade patterns mean that a cotton t-shirt may have travelled around the globe several times before it reaches the barcode reader at the check-out of your local Primark. And, the drive for cheaper clothing and the need to maintain margins has led to poorly paid, insecure, unsafe and exploitative labour across long, and often opaque supply chains.

Fast-fashion – low-priced, trend-led clothing that relies on impulse buying has led to a 2% growth in global clothing consumption annually. On average a citizen in the US buys 1 item of clothing every 5.5 days. The UK has the highest per capita consumption of clothing and textiles than any other country in Europe. Of the 26.7 kg of clothing bought each year by the average Brit, just 11kg is recycled. In Europe, around 1/3 of clothing stock is sold at full price, 1/3 discounted and 1/3, yes one third is scrapped before its even worn –so-called deadstock. Of all garments manufactured, less than 1% is reused or recycled.

If it wasn’t clear before, it should be screamingly obvious now, why the secondhand clothing market is important. The enormous social value of reuse and recycling of clothing is undeniable, based on the environmental impact alone. 

The true cost of water use ranges from 7p to £11.5 per cubic metre depending on the levels of water scarcity, whilst the social cost of carbon is £14/tCO2e (£69/ tCO2e) for emissions covered (not covered) by the EU Emissions Trading Scheme. A simple, back-of-receipt calculation shows us that water use and carbon emissions within the clothing industry destroys £61.5 -£75billion of social value alone.  Here, we’ve used the lowest valuations, only included a fragment of the environmental damage and haven’t even begun to explore the societal impact of supply chains.

The avoided cost of resource use through recycling is clear. But the societal cost of the garment industry has been exposed by the sudden drops in demand over the past 6 months. Whole economies in the global south propped up by the global north’s insatiable appetite for fast fashion were thrown into disarray when much of the global North plunged into a COVID-induced lock-down. The lack of resilience of these economies, communities and workers to changes in demand has been devastating. As one Bangladeshi clothing social entrepreneur stated at the start of the global pandemic, ‘“Poverty is a killer too, and many more people die from poverty than from COVID-19”.

In March this year, Bloomberg reported that about 1,089 garment factories in Bangladesh had orders cancelled worth roughly $1.5 billion due to the coronavirus outbreak. According to Fashion Revolution, in the global fashion industry, brands typically pay their suppliers weeks or even months after delivery, rather than upon order. This means suppliers usually pay upfront for the materials to make the products retailers buy from them. Given that the readymade clothing factories employ more than 4 million people and the industry accounts for 13% of the South Asian nation’s GDP, the societal impact of the sudden fall in demand and cancellation of orders has been staggering. The AWAJ Foundation, a grassroots labour rights NGO, reported that many factories in Bangladesh have been shut down indefinitely. Some workers were given less than a month’s salary as severance and many others have received nothing at all. 

Secondhand September seeks to highlight just how destructive our addiction to fast fashion really is, whilst drawing attention to the urgent need to move towards slow-fashion – where we buy less and reuse more. And, when we do buy clothes, we should expect to pay more. A £1 bikini for sale on a fast-fashion website will not capture the enormous environmental and social externalities associated with its production: the poorly paid, exploitative and unsafe working conditions of a garment worker in South Asia; the material waste, water use, water pollution and carbon emissions associated with its production; the precarious zero-hours contracts of a warehouse employee; and the disposal of the garment at the end of its life. 

Whilst Secondhand September, like most consumer campaigns, places the onus on the consumer to change patterns of consumption, real change will only come about from multiple actors enacting change:  governments, businesses and consumers.

The fashion industry is a perfect illustration of how embedding principles of social value across the entire supply chain and whole life cycle of a product can expose both the positive and negative outcomes resulting from their manufacture, from cradle to grave. The understanding and monetisation of impact using tools such as Social Profit Calculator’s Social Value Calculator software enables the appraisal of social and financial impacts simultaneously, and ultimately support the development of practices and policies that create value for people and planet.

SPC has been appointed to the Crown Commercial Service flagship procurement framework: G-Cloud 12 Digital Marketplace

G-Cloud 12 officially went live on 28 September 2020, the place for public sector organisations and departments to purchase cloud-based computing services from cutting edge suppliers of the latest technology and innovation.

Our appointment is based on our trusted and proven aptitudes in design, development and applications that fully utilize technology with our advanced data analytics capabilities. Our Offsite Award for Product Innovation continues to reassure and help the public sector make informed data-backed decisions when they are making spending choices. 

Selection for the framework means our digital services are available to a wider community of government and public sector organisations that are increasingly embracing forward-thinking cultures.

SPC, Sarah Coughlan comments: “We’re delighted to be added to G-Cloud 12 again this year, following our appointment to the platform for G-Cloud 11. We take pride in offering services that our clients can rely on and we are delighted that our attribution to G-Cloud 12 can represent that.”