ERSA Manifesto Blogs: Dan Ebanks blogs about what the Social Value Act means for the employment support sector

This piece of writing is part of a series of blogs designed to stimulate discussion around the five key elements of the ERSA Manifesto: commissioning, complex needs, skills, employer needs, youth employment. Any opinions represented within this blog are the authors and do not represent the views of ERSA.

Social Value and what it means for employment support services

When I talk about Social Value I am referring to it in the context of the Social Value Act, which was introduced in 2012. Due to the relatively open-ended nature of the legislation, people have, understandably, gotten quite tangled up in the definition of Social Value as a policy idea. For us, Social Value is no different from economic or environmental value… it is all about value for money. Simply put, this could be the increase in numbers of new sustainable jobs from the Work Programme, or the self-esteem and self-reliance a person may experience as a result of gaining sustainable employment. Both have value, but one is much easier to measure than the other. In our view, Social Value as a concept can therefore become a bit of a red herring.

However, the Social Value Act has meant that as a commissioner, government can require its suppliers to create benefits to the community as part of the procurement process. This represents a sea change with massive potential for more innovation in the public sector.

Is Social Value really a big deal? Isn’t it just a sop to the public sector?

We don’t think so. We think there are ways of creating a sustainable approach to leveraging such benefits from providers, keep the contracts viable and maximise the benefits to the local communities in which they operate. It is so important to keep the contracts viable –providers should be able to generate a fair profit as well as generating benefits to the community.  The private sector must be seen as partners in delivering a fair model of social value as we don’t want to kill the goose that lays the golden eggs.  It occurs in planning and infrastructure policy with Section 106 and the Community Infrastructure Levy, so why not make better use of social value in welfare policy.

What does all this mean for the employment sector?

Let’s play out a simple scenario. A local council advertises a contract to provide employment support services over a five year period, and social value is a factor in how the contract is awarded. In other words, social value will sit alongside price and quality when government is deciding who to award a contract to.

Organisations tendering for future contracts will have a number of options. They might offer to ‘donate’ time, money or materials to local organisations that are already embedded in the community delivering employment related services. In crude terms, they might ‘outsource’ their Social Value requirements. As disingenuous as this may sound, it does make sense to build on existing community foundations. However, this may not always work in a less mature market place as  there simply may not be a suitable local organisations working in employment services in that area.

Alternately the provider may simply choose to set up its community investment team in-house, therefore engaging less with the existing community organisations.

The definition of what exactly constitutes ‘community benefits’ is still very much open to interpretation – and imagination. The only guidance from government, particularly from Lord Young who led the recent Social Value Act review, is that the benefits must be linked to the contract. For example, local labour market benefits from an employment support services contract would gain traction from the government department commissioning future programmes.

Social Value – as easy or hard as you want to make it

The Social Value Act has the potential to be transformative, and it is really quite simple. Forget about how we define social value and begin talking about it in relation to specific contracts – how can government as commissioners and providers of a service, ensure community benefits can be generated through future procurement processes? Social Value is a broad canvass, and that’s why it has so much potential.

Dan Ebanks is the co-founder of the social innovation studio Firesouls (www.firesouls.co.uk & @LmbthFiresouls). Dan and his team are currently developing a number of products with social impact for government, community and business.

You can contact Dan at dan@firesouls.co.uk.