A co-operative model to improve local outcomes for local people

Why do we need a Share Social Value Vision?

In this report an Alliance Manchester Business School MBA team uncover that 75% of the Rochdale Borough public service institutions interviewed by them had no specific social value priorities.  Institutions included covered: housing, education, leisure and health as well as the local authority.  The report also shows that 80% of the suppliers of public institutions interviewed wanted more training and guidance in order to properly understand social value.

The Social Value Act, passed in 2012, requires public service providers to deliver social value when delivering public service contracts.  However the Alliance Manchester Business School (AMBS) findings above align with those of a 2015 Government review of the effectiveness of the Social Value Act. Together they demonstrate the Act is only having a fraction of the effect it was originally intended to have.

Rochdale Stronger Together (RST) is an ambitious whole community approach to transform Rochdale Borough by forging a good local economy and spreading community wealth.  Sat uniquely at the heart of community and public service organisations it wants to leverage its position to address the above issues.  It commissioned an AMBS MBA team to develop a social value brokerage model with RST acting as the broker; the aim – to bring together public service providers, their suppliers and community organisations to streamline and improve social value delivery through procurement in the Borough.  A Shared Social Value Vision for Rochdale is the team’s proposed solution.

Missed opportunities…

As mentioned above, the Public Services (Social Value) Act 2012 requires public service organisations to deliver social value when procuring goods or services.  This means considering how what is proposed to be procured might improve the economic, social and environmental well-being of the local area.  The AMBS findings however and those of the 2015 Government commissioned review by Lord Young found shortcomings in the Act’s implementation.  The review found:

  • low levels of incorporation of social value in procurements across the public sector;
  • lack of understanding of how to define social value and include it in procurement;
  • a need for commissioners to be better able to measure and quantify the social outcomes they are seeking to embed in a procurement process.

These findings aligned with those found by the AMBS team in Rochdale.  The MBA team found:

  • a lack of understanding of how to deliver social value through procurement by the public service institutions with the legal duty to do so;
  • the suppliers who prepared bids for procurement opportunities with those institutions did not know the needs of the community and struggled to deliver projects that added value and weren’t simply a bolt on cost or afterthought;
  • communications between Rochdale public service organisations regarding operationalising the Social Value Act were largely ad hoc and informal.

Opportunities to systematically co-operate and collaborate were being lost and with that the chance to share knowledge, create a unified local social value vision, and maximise impact through co-ordinated effort.

This lack of collaboration and failure to implement the Social Value Act as it was originally intended has led to community wealth creating opportunities for local people being lost.

To try address this, RST commissioned an AMBS team to develop a business model to fix the issues.

A Shared Vision for Rochdale

The Shared Vision for Social Value for Rochdale Borough solution puts the onus on collaboration of the RST anchor institution partners. These are the public service institutions which have come together since 2016 and are partners of the RST initiative.  They are large-scale employers, purchasers of goods and services in the locality and controllers of large areas of land or fixed assets.  Reaching across the housing, education, leisure and health sectors, as well as the local authority, the anchors are rooted in the communities they serve.

The AMBS Team broke the problem down into three deliverables before finding solutions for each one:

Deliverable 1 – A process to create a shared vision amongst the partner organisations and drive the social value agenda for the Borough.
Solution – RST initiates the collection of social value priorities of each anchor partner on a six monthly basis using a bespoke questionnaire aligned to the National TOMS social value framework priorities. Following this a half day facilitated workshop will be held to bring the anchors together to discuss and finalise the social value themes and priorities.  Progress made against the priorities from the previous six months would be reviewed as well as changes to circumstances considered before then setting the objectives for the next six months.

Deliverable 2 – A solution to allow suppliers to visualise the social value priorities of the Borough and guide their selection of a social value package for inclusion within their bidding processes.
Solution – A website then showcases the shared social value vision identified in deliverable 1. The website will have 4 components (some of which are optional):

Mandatory

  • Component 1 – A page which showcases the social value priorities identified in deliverable 1. A possible way of doing this is shown below.
  • Component 2 – Information to aid the understanding of social value. AMBS primary research found 80% (4) of the suppliers interviewed were not clear with regards to what is social value and why it’s needed.

Optional

  • Component 3 – is a platform for suppliers to provide periodic updates on delivery of their social value commitments. This component would consist of frontend and backend elements.  The frontend being used by suppliers to input data on their delivery of social value. The backend being used by anchor partners and RST to view the reported social value KPIs and monitor delivery.
  • Component 4 – a template for suppliers to use during the tender process to help structure and submit the social value element of their bid.  This component will help with the quality and consistency of supplier proposals.

Design of the mandatory components of the website were quoted to cost £1,800 whilst optional components would cost an additional £5,000.

Deliverable 3 – A business plan for how the model could be implemented.
Solution – The Team provided an analysis of the resources necessary to deliver and sustain the social value brokerage model.  A low budget marketing plan was also established to assist with the implementation. Several options were established for implementation and their associated costs estimated. £4,877 of the costs relate to initial labour required and £4,400 to ongoing labour required.  Given labour is expected to be provided through existing capacity within anchors, the costs can be considered already incurred. Hence below costs excluding labour are also shown.  These represent the additional funding that would need to be found to enable implementation to proceed.

Implementation

Initial / annual costs

Initial cost

Ongoing annual cost

FULL

Total

£16,554

£5,544

Excluding labour

£11,677

£1,144

MANDATORY
COMPONENTS ONLY

Total

£9,555

£5,544

Excluding labour

£4,678

£1,144

By spreading the cost across all partners the costs per organisation would be substantially reduced.

Other solutions…

Other solutions were considered as part of the team’s benefit analysis, including the possibility of employing someone two days a week to deliver the brokerage service.  Whilst this was found to be cheaper in the first year, in future years the cost would be £6,456 per year greater than the team’s proposed solution.

Elsewhere in UK whilst there are a number of innovative social value developments for measuring and monitoring social value delivery, no previous example was identified for collaboratively developing and delivering a place specific vision for social value as per the proposals within the report.

If proved successful the Shared Vision for Social Value in Rochdale model could be replicated in other geographic areas across UK.

Conclusion

The benefits to be gained through implementation of A Shared Vision for Social Value in Rochdale are substantial:

  • Creation of an organised forum for all anchor partners to come together and build relationships and share ideas to deliver social value,
  • Creation of a shared social vision for the Borough which all anchor partners have had an input into and will help to align their thinking and actions,
  • The process will give anchor partners an increased knowledge on the social value act, how to effectively implement it and how they can further help the people of Rochdale Borough,
  • The model will help to increase suppliers understanding of social value and help them deliver projects that address the needs of the Borough as determined by the anchor partners.

As a result of the above benefits,  local people who will get:  more social value delivered, social value which is better meets their needs, and social value which is of better quality.

The cost of full implementation of the AMBS proposal (including already incurred labour costs) is £16,554 with £5,544 ongoing annually.  Implementing mandatory elements of the model only and excluding labour costs would require new funding of £4,678 with £1,144 ongoing annually.  Splitting the cost across all anchor partners, would substantially reduce the cost for each contributor.

Rochdale Stronger Together anchor partners are already clear of their duty to deliver social value through procurement and willing to do so.  Members of the public interviewed during the project saw a clear need for more social value within the Borough.  A Shared Vision for Social Value in Rochdale now provides a much needed, practical, low cost way forward. One which:

  • overcomes the knowledge and resource challenges that local institutions and their suppliers are facing,
  • addresses known issues with social value delivery through procurement, and
  • offers Rochdale Borough an opportunity to continue its reputation for pioneering co-operative social action.

Read the full copy of the AMBS report HERE.  Please consider giving your feedback and support through the comments section or via Rochdale Stronger Together social media – see links below.

Report Authors: Adivignesh Pathi, Kathryn Hobbs, Mi Mi  KhaingTomoharu Tanaka, Zhao Lim.

The MBA Team stood in front of Alliance Manchester Business School accompanied by Edward Carpenter from Rochdale Stronger Together.

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