What is Social Value
If you’re a supplier and on this page, you’re probably hearing the term social value being actively used more throughout your day to day. You’re also probably asking yourself, “what is social value?”, and “How does it affect me?”.
Well, in this blog we’re going to give you a breakdown, specifically for subcontractors, material suppliers and professional services on what social value is, why it’s important, how it affects you and how you can benefit from it.
At Compliance Chain, we view ‘social value’ in construction as a cornerstone for building projects that resonate with the community. One way of looking at social value in construction is by looking at the advantages a project can deliver to both the local community and the broader society. Social Value tracks the diverse benefits of these projects from immediate job creation to long-term environmental sustainability. Furthermore, other benefits include:
- Generating employment opportunities and fostering long-term job growth
- Prioritising ethical practices and low-carbon options in supply chain management
- Collaborating with non-profits, community groups, and charitable organisations
- Strengthening community identity and fostering social cohesion
How does social value affect suppliers in construction?
For suppliers in the construction sector, social value brings a host of positive benefits. Regulatory frameworks are increasingly mandating social value considerations in procurement processes, now making it key criteria in helping to winning projects when bidding.
In the bidding process, contractors typically dedicate between 10% and 12% of the total project value to social value initiatives. For a £10 million project, this translates to an investment of £1 million to £1.2 million in the local community. This approach not only supports the local economy by engaging suppliers within a 30-mile radius but also benefits non-profits, community organisations, and other groups, ensuring that local suppliers receive opportunities that might otherwise go to suppliers further afield.
3 Benefits of implementing Social Value for suppliers
Win more work
Many clients, especially in the public sector, now require contractors and suppliers to demonstrate how they will deliver social value alongside their services. This could include creating jobs, offering apprenticeships, reducing carbon emissions, or engaging with local communities. Suppliers that can show a strong commitment to these values are more likely to win contracts. Salford City Council serves as an example among local authorities in highlighting to businesses that, “Social value is a business opportunity.”
“Build social value into your bid – that’s the message being given to local companies and organisations which want to do business with Salford City Council.”
Salford City Council encourages local businesses and organisations to bid on their contracts whilst giving extra weight to bids that include social value initiatives.
These initiatives could include things like paying the Real Living Wage, using local suppliers, and creating jobs and apprenticeships. The council hopes that this will help to boost the local economy and reduce poverty. By tracking your social value you can stand out from competitors by showing the value you create for your local community.
Financial Incentives
There’s a tangible financial upside to prioritising social value. Governments and organisations often offer incentives, such as tax breaks or grants, to businesses that contribute positively to society. Moreover, being recognised as a socially responsible supplier can lead to preferred partnerships with like-minded companies, potentially leading to more lucrative contracts.
Here are some links to UK grants and tax reliefs that are also considered social value if you where to implement them in your business or organisation, you can leverage this for your advantage and also document as part of your social value contributions in your tender applications:
Apprenticeships
Employing veterans
Charity donation
Seconding employees
Strengthened Relationships
Finally, investing in the community and environmental initiatives helps build stronger, more meaningful relationships with various stakeholders, including local communities, governments, and clients. These relationships are invaluable, fostering a supportive network that can aid in business growth and sustainability.
Why track your Social Value
You now know what social value is, why it’s important and the benefits of implementing social value – let’s dive into why you should track it.
Here’s why you should start tracking your social value:
The Public Services (Social Value) Act (2013) requires all public sector organisations and their suppliers to look beyond the financial cost of a contract to evaluate how the services they secure and purchase can enhance the economic, social, and environmental prosperity of a region.
In short, you need to track the social value you create if you want to work with public sector organisations such as councils, government etc. If you want to open yourself up to new work opportunities tracking social value is essential.
How to track your social value
Here at Compliance Chain, we’re all about delivering social value management solutions. But we are also here to deliver some good news –
You’re probably already delivering social value without even knowing it!
Chances are, you’re already contributing social value without realising it, whether it’s through sourcing materials from local suppliers or offering apprenticeship opportunities. This all contributes to social value you just need a way of tracking and demonstrating all of this activity. That’s where our Social Value Management solution comes in.
Understanding the impact of your social value initiatives can be complex. Compliance Chain’s social value solution simplifies this process, we offer a user-friendly tool to track and report on your contributions effectively.
Our platform not only helps in measuring your efforts but also in communicating them transparently to clients and stakeholders, reinforcing your commitment to making a difference.
Contact us today to learn more about our Social Value solution.
Beth supports users to optimise solutions, ensuring the success of clients’ projects. She actively listens to industry feedback, contributing to the ongoing development of software solutions.
