We receive numerous cries of help from clients about social value. What is social value and social value policy? How do we deliver social value benefits and how should we respond to social value questions in tenders? What do service providers actually have to deliver? What is the UK Government’s Social Value Model? What is the NHS Social Value Model? And so on… There is a lot to talk about! In this blog, we provide some simple definitions and a summary of the relevant legislation and how it is being applied in the health and social care sectors.
In our next blog, we will discuss the UK Government’s Social Value Model, which is now mandated on all procurements run by NHS organisations. We will also summarise the advice supplied by NHS England on applying the Model to procurements in the healthcare sector to support the NHS Net Zero Commitment and broader NHS social value priorities .
Defenition of Social Value
Social value refers to the positive impact or benefit that a product, service, or action has on society or the environment beyond its economic value.
Social value policy refers to a set of principles and guidelines that prioritize the creation of social and environmental benefits in the procurement and delivery of goods and services. It aims to ensure that public money is spent in a way that not only meets the immediate needs of the organization, but also contributes to broader social and environmental goals.
What is Social Value?
In the context of healthcare tendering, social value can be defined as the economic, social and/or environmental benefits delivered to a local community through a procurement of healthcare products or services, over and above the core benefits of the products or services being procured.
Examples of social value
An organisation contracted by NHS England to provide school age immunisations within a local community might deliver social value by providing electric cars for its staff to use when travelling to schools. Here the use of electric cars (rather than petrol or diesel vehicles) and the sharing of vehicles would be considered as contributing social value regarding environmental benefit, by minimising local vehicle emissions. In this example, the organisation could not claim that the benefits of immunising children were ‘social value’ because the immunisation programme is the core service being procured and therefore the associated benefits would not be an additional benefit to the local community over and above the service being procured.
The Social Value Act
Since 2013, in England and Wales, all public sector organisations have been legally required under the Public Services (Social Value) Act to consider economic, social and/or environmental benefits (‘social value’) to the local community when procuring services. Social value benefits commissioners are responsible for ensuring that public sector organizations deliver services that have a positive impact on society, including in areas such as health, education, and community development.
Social value questions in tenders
In response to the Social Value Act, commissioners of healthcare services started to include questions around social value in procurements. Typically, these social value questions simply requested a narrative description of how bidders proposed to deliver social value over the course of the contract and the social value component of a submission would account for 5% to10% (maximum) of a submitted bid.
In September 2020, the Government went further and published the ‘Social Value Model’ which provides a framework and guidance for assessing tenderers’ proposals for social value. The Social Value model covers 5 themes and 8 policy outcomes. The 5 themes are:
- COVID-19 recovery
- Tackling economic inequality
- Fighting climate change
- Equal opportunity
In applying the Social Value Model, commissioners must apply a minimum weighting of 10% to social value when tenders are scored and evaluated i.e. if a tender can score a maximum of 100 marks, at least 10 of those marks must be attributed to social value. The remaining marks will typically be split between price and quality considerations. A higher weighting can be applied by commissioners if justified. The Government mandated that the Social Value Model should be applied to all new procurements from January 1st 2021, for ‘in-scope’ organisations, namely Central Government Departments, their Executive Agencies and Non Departmental Public Bodies (NDPBs). Both NHS England and NHS Digital are NDPBs.
The NHS Social Value Model
Since April 1st, 2022, NHS England has required all NHS organisations in England to apply the UK Government’s Social Value Model to the commissioning and purchase of goods and services. This covers most of the healthcare services in the UK, which are now commissioned either by NHS England itself, or by Integrated Care Boards, which are also defined as NHS organisations. In March 2022, NHS England published social value model guidance for NHS procurement teams in an article entitled ‘Applying net zero and social value in the procurement of NHS goods and services’. This guidance sought to build on the broader advice around the Social Value Model provided by central government and to offer healthcare-specific examples to commissioners in the NHS. The guidance also underlined the role of NHS procurement in delivering the NHS commitment to reach net zero by 2045, given that over 60% of NHS carbon emissions are generated by the supply chain. A key stipulation made in the guidance was that every NHS procurement should include the theme of ‘Fighting Climate Change’.
Other Social Value Frameworks
NHS England’s requirement to use the Social Value Model does not apply to social care, whether delivered in patients’ homes or in care homes, nor to public health services, all of which are commissioned by Local Authorities. This includes, for example, 0-19 children’s services (Health Visiting and School Nursing). While the NHS in England is now focusing on the Government’s Social Value Model, there are a plethora of other social value frameworks used by organisations in the UK to understand, track and measure the social value added by projects or services. Many of these were originally targeted at infrastructure projects including in the housing and construction sector e.g. the Social Value Bank developed by the Housing Association’s Charitable Trust (HACT). Some of these are now being more broadly applied. In the healthcare sector, a framework we have seen applied by several Local Authorities, particularly in the commissioning of children’s services, is the ‘National TOMs Framework’ e.g. ‘Number of new hires who are long-term unemployed’.
A methodology is provided to translate each tenderer’s plans into a proxy financial value, in effect a quantification of the social value delivered. From a procurement point of view, social value frameworks offer commissioners an objective and consistent way to evaluate and compare the social value plans detailed in submissions from competing tenderers and are clearly a step forward. Equally clear, however, is the fact that there is some re-calibration required when it comes to applying certain social value frameworks to the healthcare sector. For example, the quantification of social value sometimes pushes providers in directions which simply don’t seem appropriate.
While providers of healthcare services have spent painful decades ‘right-sizing’ services to shoehorn into ever-decreasing budgets, the factor which will typically generate by far the greatest social value on a framework is the hiring of additional staff, which may not be justified or even possible within the defined financial envelope. Given the fact that many Local Authorities are now using third party social value frameworks across multiple sectors, not just healthcare, it seems unlikely that there will be a move to adopt the Government’s Social Value Model. For the foreseeable future, therefore, we think we’ll be continuing to work with a number of different social value frameworks and tools to help commissioners evaluate social value proposals and social value benefits. It will be interesting to see which prove to be the most robust over time!
Talk to Healthcare bids to see how we can work with you when you need social value tender question and social value tender answer examples.