Did you know that public procurement takes up a significant portion of government spending? In the United Kingdom, for example, public procurement accounts for almost £379 billion in 2021/22 – a 7% increase from the year before. Given the large role, it’s no surprise that there is a growing interest in using public procurement to create social value.
In recent years, there has been an increased focus on social value in public procurement. This means governments are increasingly looking for ways to procure goods and services. Specifically, those that create positive social outcomes.
In this blog post, we will discuss social value and how it is applied in public procurement. We will also explore some of the benefits of incorporating social value into procurement decisions.
Keep reading to learn more about social value in public procurement!
What Is Social Value?
Social value is defined as the additional benefits that an activity generates over and above its direct economic impact. In other words, social value is how a program can improve the lives of those it serves.
There are many ways to measure social value. Some common methods include cost-benefit analysis. There’s also social return on investment (SROI), and multi-criteria analysis (MCA).
In public procurement, social value is often considered alongside price and quality. This allows governments to make procurement decisions. Choices that will have the greatest positive impact on society.
Why Is Social Value Important?
There are several reasons why incorporating social value into public procurement is important.
Public procurement is a process by which the government acquires goods and services. It can be used to meet a wide variety of needs. For instance, healthcare, education, transportation, and more.
First, it can help to ensure that government resources are used in a way for benefits. This is especially important in areas where there is a limited amount of funding.
Second, social value can help create transparency and accountability in the procurement process. This is because decision-makers must be clear about why they choose the supplier.
Third, taking social value into account can help to build trust between the parties. When citizens see that their tax dollars are being spent in ways to help them, that’s the goal. They are more likely to have confidence in government institutions.
Finally, focusing on social value can lead to more innovative procurement decisions. This is because decision-makers are encouraged to think outside the box. They must consider a wider range of options.
What Are the Benefits of Social Value in Public Procurement?
There are many benefits associated with incorporating social value into public procurement. Some of the most notable advantages include:
Improved Social Outcomes
When social value is considered, governments are more likely to procure goods and services that create positive social outcomes. This can lead to improved health, education, and economic outcomes for citizens.
Increased Accountability & Transparency
As we mentioned earlier, considering social value can help to create accountability in the process. This is because decision-makers must be clear about why they make certain choices.
Greater Trust Between Public & Government
When social value is a priority, citizens will see their tax dollars being spent properly. This can lead to greater trust between the government and the public.
More Efficient & Innovative Procurement
Focusing on social value can encourage decision-makers to think outside the box and consider a wider range of options. This can lead to more innovative and efficient procurement decisions.
As you can see, there are many benefits associated with social value in public procurement.
By taking social value into account, governments can better use resources. They can create more transparency and accountability, and build trust with the public.
Additionally, focusing on social value can lead to more appropriate decisions in procurement.
How to Do It Right?
When incorporating social value into public procurement, it is important to do it in a way that is fair, transparent, and effective. Below are some tips on how to do this:
Use Multi-Criteria Approach
When considering social value, it is important to use a multi-criteria approach. This means considering a variety of factors, such as price, quality, and social impact.
Be Clear About Objectives
Before beginning the procurement process, it is important to be clear about your objectives. What are you hoping to achieve by considering social value? Once you have answered this question, you can develop criteria that will help you to choose the right supplier.
Make Sure All Stakeholders Are Involved
When making procurement decisions, it is important to involve all stakeholders. This includes citizens, civil society organizations, and government officials. By involving all stakeholders, you can ensure that the decision-making process is fair and transparent.
Use Evidence to Your Advantage
When considering social value, it is important to use an evidence-based approach. This means basing your decisions on data and research, rather than personal preferences or biases.
Be Flexible
Flexibility is critical when incorporating social value into public procurement. This means being willing to reconsider your criteria if necessary. It also means being open to new ideas.
Social Value: The Right Way
When the social value fits the criteria in procurement, it allows governments to make decisions. These will have the most significant positive impact on society.
There are many benefits associated with incorporating social value into public procurement. For instance, improved social outcomes increased transparency and accountability.
There’s also a greater trust between the government and the public. This leads to more innovative and efficient procurement decisions.
When done correctly, social value can be a powerful tool for positive change.
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