Social Value – what’s in a name? Using the Act to change public services

29^th April 2015

The Social Value Act was born in unusual circumstances. As the former MP Tom Levitt recollects in his book, ‘Partners for Good’, the then new Conservative MP Chris White launched the Bill in October 2010. It gained Royal Assent in March 2012, ‘a feat of patience only made possible by Parliament’s long sitting between one state opening and the next, unprecedented in modern times … Private members’ bills usually succeed, or more often fail, within nine months.’

And it remains a rare piece of legislation, heralded by some as genuinely transformative, by others a red herring, and others still as a sop to the public sector. Certainly, as a policy idea, social value does seem to be a version of the Best Value and Value for Money regimes: how do commissioners get the optimal mix of tangible and intangible benefits from our public services for local communities, whether those benefits be economic, social or environmental?

The current debate has the usual hang-ups. Definitions are important, but the risk is that we obsess over a fixed understanding of what social value is instead of looking for opportunities to use the legislation to innovate.

Another obsession is measurement. A management consultant will say, ‘you can’t manage what you can’t measure.’ We say you can’t measure what you don’t have. We understand why measurement is important. Commissioners need to know whether the benefits of a public service, be they economic, social or environmental, outweigh the costs of the service (moral considerations conveniently placed to one side).

There are several established metrics out there: ask yourself, is the measurement ‘good enough’ or ‘close enough’ to be useful? We shouldn’t settle for simplistic evaluations of impact, or stop thinking about how to improve social impact metrics. But when choosing, consider how sufficiently close we need to get to the ‘truth’ for it to be helpful in terms of your wider strategic aims as a commissioner, policy maker or practitioner. In other words, the metric has to have practical purpose and be proportionate to the job at hand.

Along with worrying less about definitions, at Firesouls we take it as read that government commissioners will settle on the metric that best works for them. We have been looking at how the Social Value Act can support innovation in the funding and delivery of public services. In our mind, definition and measurement are process issues. They won’t, in and of themselves, lead to innovation: they just make the current systems work faster, regardless of how effective they are. They don’t achieve step changes in the way public services are delivered or funded.

For us, what is new and groundbreaking (certainly for public sector revenue funding) is the obligation that commissioners can place on suppliers to create community benefits. We have focused on that aspect of the legislation and it has informed our core idea, which is to create a digital platform to facilitate the trade of resources between suppliers and local community based organisations.

We are helping suppliers outsource their Social Value obligation. Our argument is that local community-based organisations are best placed to create social value – not suppliers. These organisations understand local need, are plugged into the networks and understand local histories – all vital in the terms of community-based solutions. But they are starved of resources. Why not use the Social Value Act to channel ‘community benefits’ – in the form of time, money or materials – to local community-based organisations to solve local problems?

It seems clear to us. And it feels entirely appropriate that a quirk of history has resulted in legislation that could transform the way the public sector is funded. How timely.