Local councils are increasingly using procurement as a way to drive higher economic growth, according to a new report by Social Enterprise UK, the membership body for social enterprises in the UK.
The organisation is now calling on central government, local councils and other public bodies to do more to utilise social value, putting it front and centre of decision making.
Based on in-depth research across local government, the report shows a growing use of social value – making spending decisions not just on financial cost but on the economic, social and environmental impact.
82% of local councils believe that spending public money focusing on social value, rather than just focusing on the cheapest product, generates higher levels of growth. Sunderland, one of the case studies referenced in the report, was one of the fastest growing cities in the UK in 2018. Two-fifths of councils also believe that a social value approach can reduce inequalities.
With the benefits of social value and using public money strategically increasingly recognised by local councils, the research calls on more to be done to embed social value into all aspects of decision making, using it as a driver of inclusive growth. The report also asks for more support to be given to local councils to measure and report on the value that they are creating, so that there is a consistent pressure to drive better performance.
Commenting on the report, Peter Holbrook Chief Executive of Social Enterprise UK said:
Necessity is the mother of invention, and the squeeze on public resources that austerity caused has forced everyone to think differently.
What we have seen in many parts of the country is strong leaders utilising every tool to boost local economies and spread growth across communities.
Social value has been critical to this change, creating new jobs and new opportunities.
It is having transformative results on the ground. Now that we have proven that social value works, we must place it front and centre in the way that we run our economy.
Paul Streets OBE, CEO of Lloyds Bank Foundation who co-funded the research added:
As this research recognises, there are countless opportunities for greater use of social value to drive growth and strengthen local communities.
We know that small and local charities in particular deliver high levels of social value for individuals, the economy and communities and with budgets stretched and demands high, it is critical that government recognise the full value of investing in these charities.
It’s promising to see the importance of social value gaining momentum at a local level but much more needs to be done by government at all levels and with leadership from the top to fully grasp the opportunities that social value offers – we hope this research will help encourage and catalyse this to happen.
The SEUK report comes as the government begins to analyse feedback from its consultation into social value in government procurement.
We welcome the government’s renewed focus on social value because we need to do more to ensure that taxpayers’ money delivers a better society and a sustainable planet.
There are many frameworks already in existence where social impact is given scant regard. This needs to change and there must be a cultural shift within government at its widest level to embrace social impact through its suppliers.
Photo: London City Hall, Maciek Lulko, licensed under Creative Commons