Eight months ago, the Public Services (Social Value) Act came into force. In a nutshell, the Act obliges public sector commissioners to consider questions of wider social and environmental value when they are commissioning any public service.
A few weeks ago, the trade body for social enterprise, SEUK, and CAN Invest brought together public sector commissioners, private companies, charities and social enterprises from Bristol and beyond. Together we explored what impact the Act is having, from commissioning for social value, impact measurement, social enterprise supply chains, the shift from policy to practice, and more.
Despite the differing perspectives, there were some resonating themes throughout the day.
- Social value is going mainstream Tweet
- Impact measurement is increasingly important Tweet
- More collaboration and competition with the private sector Tweet
- Who owns social value? A mission statement is not enough Tweet
Read on to find out more about each...
Theme 1 – Social value is going mainstream Tweet
All governments since Thatcher, be it Labour, Conservative or Coalition, have more or less continuously furthered the idea of a ‘mixed economy’ for government provision, with private and non-profit providers playing a greater and greater role in the delivery of an increasing number of public services. In line with this evolution, the State has moved from being deliverer to commissioner and now increasingly, co-investor in public service.
For much of this decades-long evolution, the ideas of ‘efficiency’ and then ‘value for money’ were driving principles. Now, the Social Value Act is heralding a new agenda: the mainstreaming of social value. If it lives up to the ambitions of its sponsors and supporters, the Act will ensure that social value is increasingly central to all commissioning and procurement.
In other words, a whole range of actors are joining the social value movement in increasing numbers. This includes an increasing range of for-profit businesses that dwarf many charities and social enterprises in the size and scale of the impact they can potentially deliver.
One interesting example from the Bristol event is the Landmarc, a contractor for the Ministry of Defence that manages the lands and estate used for military training purposes. In partnership with SEUK, the £90m-turnover corporation is looking to incorporate an increasing number of social enterprises and SMEs into its supply chain, and deliver an increasing level of social and environmental impact to augment its primary job of managing the National Training Estate.
We will see more examples of for-profit businesses following in the footsteps of Landmarc. This ‘mainstreaming of social value’ is to be lauded as a positive for UK society. It also brings a range of challenges and opportunities for the Third Sector.
Theme 2 – Impact measurement is increasingly important Tweet
As social value becomes ‘mainstream,’ a clear understanding of what social value is, and how social impact is measured and communicated, becomes vital. Vital to commissioners for identifying and meeting the needs of different communities; vital to ensuring procurement and monitoring frameworks are both robust and appropriate; vital to reporting and most importantly to enhancing the social value of outcomes and impacts being delivered.
This is a task facing all participants in this space, including commissioners, providers, other supporters, and even end users.
The growing recognition of this task has lead to a couple of trends. First, there has been a near explosion in the number methodologies and techniques available to measure social impact. This is due to the proliferation in purposes for measurement (e.g. from monitoring, to evaluation and now understanding and enhancing impact), as well as the audiences (e.g. grant funders and general supporters, to commissioners and now social investors).
Second, and conversely, there is a gradually emerging consensus on some common principles in good impact measurement and reporting. These include transparency and verifiability, proportionality to the size and complexity of the intervention, and engaging stakeholders in both measurement and also measurement design and reporting.
Theme 3 – More competition and collaboration with the private sector Tweet
Many participants at the conference noted that, when it comes to public sector commissioning, the Social Value Act does not prioritise any one type of service provider when it comes to public sector commissioning, such as non-profit or social impact-led organisations.
Rather, the Act is blurring the previous distinctions between ‘commercial’ procurement on the one hand, and ‘social impact’ procurement on the other. As a result, an increasing number of for-profit businesses are becoming very serious about delivering social value.
In other words, social value is no longer the sole preserve of the Third Sector. Rather, it will bring increasing competition to the Third Sector.
That said, there are many businesses that are genuine about partnership and collaboration for the benefit of all. The participation of some for-profits at the conference proves this. It is up the Third Sector how it responds. This brings us to our final, overarching theme.
Theme 4 – Who owns social value? A mission statement is not enough Tweet
Many charity and social enterprise leaders believe that the Third Sector is uniquely placed to deliver social and environmental impact for a range of beneficiaries in need of support, and assume that the Third Sector in general is the traditional provider and owner of social value.
In contrast to these assumptions, recent joint research from CAN Invest, E3M, Baker Tilly and Big Society Capital suggests that public sector commissioners and social investors believe they own the social value created by the charities and social enterprises they fund. Meanwhile, for-profit businesses are responding to the Act by updating their social value credentials and bringing new perspectives and activity to this space. The likely result will be increased debate on the question of who ‘owns’ social value.
The upshot is that charities and social enterprises are less likely to uniquely deliver impact for local communities and marginalised groups. As a result, a mission statement is no longer enough to commanding a ‘right’ to public support.
To maintain or grow its share of the ‘market’ in social impact, everyone in a social purpose organisation, from Trustees and Directors to the frontline will need to do more to show that they are truly held accountable for the impact they deliver for stakeholders.
It may be a while before the Trustees of most organisations set social impact KPIs for their organization as par for the course, and publicly report on progress. But the sooner organisations work toward this, the better.
Thanks to everyone who joined us for the Bristol Social Value Conference and contributed to this ongoing debate. We welcome comments on the themes and issues we’ve highlighted above and look forward to continuing the discussion.