A process evaluation of social value in procurement
Organisation: East London NHS Foundation Trust (ELFT)
Location: East London, Luton and Bedfordshire
Populations served: 1.8 million people
A process evaluation of the implementation of social values in procurement at East London NHS Foundation Trust.
ELFT recognises its significant role and responsibility as an anchor institution to support the health and wealth of the communities it serves. In 2020, its Council of Governors voted and agreed on five social value priorities to embed in our procurement processes:
Ensuring our suppliers pay the Real Living Wage set by the Living Wage Foundation
Investment to grow and retention of spend in local economies
The creation of equal employment and training opportunities for local people, people with protected characteristics, service users, and groups hardest hit by the COVID-19 pandemic
A commitment to sustainability, including a reduction in carbon emissions
Support for young workers, school leavers and apprenticeship schemes
We commissioned a process evaluation of our implementation of these social value priorities in the procurement and delivery of two key contracts; with Big Blue Door (a SME) to develop a new intranet and website, and with OCS (a multinational corporation) to provide soft facilities management.
Impact of the programme
The focus of the evaluation was on learning around processes; (a) how well social value priorities were applied in procurement processes, (b) how suppliers are implementing social value priorities in practice, and any barriers to implementation that exist for purchaser or suppliers, and (c) how to measure social value outcomes more effectively.
Qualitative research was undertaken to explore the perspectives of ELFT as a commissioner, our suppliers and our service users (as intended beneficiaries of social value implementation). Three key themes emerged from the findings, outlined below.
Social value implementation & measurement
Quote from ELFT supplier: “…having prescriptive requirements in tenders does make it difficult to offer social value.”
There is a need for greater clarity and understanding among suppliers of how to implement ELFT’s social value principles in practice, including clearer guidance documents and earlier dialogue within the marketplace.
A lack of understanding of how to implement social value priorities in practice is a factor in the difficulty that smaller suppliers can experience in signing up to and understanding a social value approach to procurement - larger suppliers are more likely to have experience from other contracts across the public sector.
Social value concepts are more visible and better understood by suppliers in relation to environmental sustainability (net zero) and anti-slavery initiatives than in relation to addressing health inequalities and barriers to employment.
In relation to the two contracts considered, the process for identifying social value KPIs consisted either of adopting existing supplier metrics and/or adding ELFT principles to existing social value measures rather than explicitly and transparently co-creating a joint set of new measures.
There was consensus for greater flexibility in the definition and operation of KPIs and an expectation that ELFT should maintain an approach to performance measurement that is not overly restrictive.
An adaptive KPI process could help to measure formative approaches to implementing social values over the contract duration, not just for performance snapshots. It could allow KPIs to be adapted to evolving client needs, and for the capture of additional actions and activities that suppliers undertake in parallel to the contracts, such as community workshops, engagement events and linked training, to provide a fuller picture of their impact and added value.
2. Operational considerations for social value implementation by ELFT and its suppliers
Quote from ELFT service user, “They don't just provide the core thing that's actually required…they actually bring more than just the provision of the service that they're being paid for.”
Suppliers highlighted the potential usefulness of a single toolkit or support document for social value procurement and a consolidated community of practice within the organisation (or through partnerships) to help share early successes and wider knowledge. Such a toolkit might outline key objectives, intended outcomes, proposed modes of operation (how principles might translate into practice) and communications guidance for the bidding process.
Suppliers reported that there is a need to ensure investment in additional staff resource to manage their social value responsibilities.
ELFT has limited staff resource to support its social value priorities – participants suggested that greater impact could come from creating discrete social value roles rather than adding the social value dimension to existing roles. However, this may introduce a risk that social value expertise becomes more concentrated rather than more widespread.
Data access and data sharing acting as continuing constraints between suppliers and the Trust, inhibiting real-time assessments of need, clearer targeting of services, and business development using shared systems. Some of these barriers sit outside of ELFT’s direct control.
Currently, there is no systemic or unified approach to social value across the wider North East London Integrated Care System (NEL ICS) despite the procurement activity within ELFT’s catchment areas.
3. Marketplace development needed for small suppliers
Quote from ELFT contracts & procurement team member, “Social value requirements are going to be ever changing…in five years’ time there might be new things that we need to consider. So I would expect them [suppliers] to be very flexible.”
There is a need for ELFT to more actively address the circumstances of suppliers who are new to public sector procurement (including in the voluntary sector) in the market engagement and bidding processes.
Smaller organisations can lack the resources to support or further develop their social value proposition - suppliers with a dedicated staff resource have clear bidding advantages in terms of data analysis and strategy development.
ELFT’s procurement portal could be clearer for those outside of the public sector and those unfamiliar with social value as a concept, including smaller businesses and start-ups. This might include an explicit indication of the resources required to both research and complete a bid.
There is a risk that ELFT’s approach to social value procurement has the unintended consequence of leading to the Trust working only with a small cohort of larger companies over time given their scale benefits.
Price is no longer the key differentiator for commissioning within the public sector.
There is genuine alignment of social value, operational and commercial drivers for commissioners and suppliers – for example, applying the London Living Wage as a condition in supplier contracts not only serves ELFT’s social value priorities of reducing health inequalities through higher income levels, but also improves the recruitment and retention of staff for suppliers, reducing workforce turnover and associated costs.
ELFT’s Real Living Wage ambition should consider and align with pay benchmarking within specific industries and be more detailed in how this requirement is monitored and maintained.
How the programme was delivered
We commissioned The Strategy Unit, a specialist NHS team in research and analysis, to conduct the evaluation.
Methodology included interviews, focus groups, surveys and document review.
Between June-Sept. 2022, 7 interviews were conducted remotely with social value leads from within ELFT, the two contracted suppliers and a regional stakeholder.
In August 2022, 2 focus groups were held – one with 9 participants from the procurement and contracts teams and one with 19 ELFT service users.
Between June-Sept. 2022, 2 surveys were carried out – one with ELFT service users (n= 6 complete responses and 9 partial responses) and one with suppliers (n= 2 completed responses and 15 partial responses).
What is the future of this programme?
We will embed the learning from this evaluation to improve our implementation of social values in procurement and contract delivery processes by implementing the key recommendations made. These are set out below.
Develop a single toolkit for suppliers for social value procurement - such a toolkit might outline key objectives, intended outcomes, proposed modes of operation (how principles might translate into practice) and communications guidance for the bidding process.
Agree a social value data sharing and information protocol to promote access across the local public sector and its suppliers. This could help to identify real and potential access issues, better enable real-time assessments of need, provide clearer targeting, and promote service development.
Consolidate engagement activity and service user involvement. Building on existing opportunities through service user participation leads within the Trust could help to embed a common approach to service user involvement in sense checking both delivery and outcomes.
Extend market development activities to enable additional organisations to tender for social value contracts, especially those that are local to ELFT, are smaller and/or are from the voluntary sector. This may also help to capacity build an identifiable project pipeline (new projects) for client and supplier alike.
Work proactively with the ICS to formalise social value working beyond networks and loose partnerships and to realise their new role in promoting social value principles, providing education (to suppliers and the wider public sector), as well as in intelligence gathering and providing ‘think space’.
Furthermore, we are embedding a systematic, pan-London approach to measurement of social value outcomes through the use of the Social Value Portal (a social value procurement and reporting tool), and a set of social value KPIs developed by the NHS London Procurement Partnership (LPP) that reflects social value priorities across the five London ICSs.
To maximise the impact of our work to embed social values in procurement, our procurement and contracts team needs to be adequately resourced to ensure that social value KPIs are effectively monitored during contract delivery, and acted upon by suppliers and the Trust.
Advice for others doing similar work
A key lesson learned is to be mindful of the inequality in expertise and resource between small and large suppliers in terms of their ability to fulfil social value requirements when bidding for public sector contracts. Smaller organisations can lack understanding of how to implement social values in practice, whereas larger organisations are more likely to have experience from other public sector contracts, and further may have dedicated staff resource to work on their social value proposition.
This inequality leads to a risk that our approach to social value procurement has the unintended consequence of leading to the Trust working only with a small cohort of larger companies over time given their scale benefits.
To address this inequality, we need to proactively support smaller suppliers, and those in the voluntary sector with less experience of bidding for public sector contracts, so they have a better understanding of how to implement ELFT’s social value principles in practice, and how to develop their social value proposition to better compete in the bidding process.
Key suggestions from suppliers in terms of support we could provide were to develop a single toolkit or support document for social value procurement, and a consolidated community of practice within the organisation (or through partnerships) to help share early successes and wider knowledge. Such a toolkit might outline key objectives, intended outcomes, proposed modes of operation (how principles might translate into practice) and communications guidance for the bidding process.
In terms of measuring the implementation of social values by suppliers, there was consensus that the processes for developing and monitoring social value KPIs should be flexible, adaptive and not prescriptive. Social value KPIs should be co-created jointly by commissioner and supplier. A flexible approach to performance monitoring will allow for KPIs to be adapted to evolving client needs, and for the capture of additional actions and activities that suppliers undertake in parallel to the contracts to provide a fuller picture of their added social value.
We would like to acknowledge and thank James Sandy and David Frith at the Strategy Unit for their work conducting the evaluation. We would also like to thank the steering group members for their participation and support – Thomas Morgan, Paul Binfield and Millie Smith at ELFT, Shona Sinclair, Caroline Chautemps and Kevin Reaney at OCS, and Paul Jenkins at Big Blue Door.
Lead name: Una Geary and Angela Bartley
Contact email address: una.geary2@nhs.net and angela.bartley@nhs.net
For more information about the programme, contact Jenny Garrett at jenny.garrett@nhs.net.