Fair work: A critical opportunity for social value?

February 10, 2020

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by Dr Deborah Harrison, Carnegie Associate

Speaking at the January 2020 National Social Value Conference: Time to Act! on the topic of ‘The Future of Public Sector Procurement,’ was an uplifting experience. Since the introduction of the Public Services (Social Value) Act 2012, public sector organisations have been required to consider ‘economic, social and environmental wellbeing’ in the awarding of public service contracts. Public sector procurement represents an annual spend of over £200 billion in the UK – 10% of total GDP.

A focus on social value has enabled public sector commissioning and procurement teams to utilise their spending power in new and novel ways, to lever positive outcomes for local communities. Benefits have included the provision of apprenticeships and work placements, alongside initiatives to encourage local supply chains and promote environmental and ethical business practices. Many organisations are developing creative and innovative approaches, yet as the conference title (Time to Act!) implies, there is more to be done if the potential of social value is to be fully realised.

I was invited to the conference to talk about our research in the North East of England, which looks at the (actual and potential) role of public procurement in supporting better work. From this perspective, there are two crucial missing pieces in the social value puzzle. Firstly, the absence of consideration for fair work in current policy and practice illustrates an untapped opportunity to improve the lives of local residents on the lowest incomes. A shifting labour market, which has led to a loss of skilled jobs alongside growth in low-paid and ‘gig economy’ work, has spurred increasing acknowledgement that it is not just the availability of work that is important, but also its quality. Improving opportunities for good work is one of the biggest challenges faced by our local and national economies.

Despite this, our research highlighted that aspects of work quality – such as pay, contract types, training and progression, terms and conditions and worker representation – are usually absent from social value considerations. Our study illustrated several reasons for this, pointing to the need for a clear definition of fair work and an accessible evidence base, alongside strong political leadership to drive these issues forward. Our findings also highlighted the importance of future investment into developing our understanding on a range of specific process issues, including mechanisms to measure and monitor good work outcomes.

Our research demonstrated mixed views and a series of tensions related to social value, including the potential for unintended negative outcomes. The emphasis on apprenticeships for example may disadvantage smaller suppliers if they feel unable to make such long-term promises. Apprenticeships also risk being cut short when attached to short-term contracts, leaving the young person without a qualification. Particular problems arise in fragile markets such as construction and adult social care, which are characterised by issues such as tight profit margins and vulnerable payment structures. In such markets, there is a risk that the cost of delivering social value outcomes can only be factored into supplier finances by being passed down to workers or down through the supply chain. Social value is often referred to as a mechanism to ‘unlock’ additional value at ‘no extra cost’ to the procurer – yet the cost is inevitably borne out somewhere along the supply chain. Addressing such tensions must form a crucial part of the evolution and future development of social value.

This leads to a second missing piece in the social value puzzle. There appears to be a lack of publically available independent, external evaluation of existing social value practice. This prevents us from collectively obtaining a full, balanced picture of its implementation – warts and all. Many of the tensions and unintended consequences identified in our research are yet to appear in current discussion around social value, due to an apparent emphasis on what is working well rather than what needs to be adjusted. While sharing good practice is central to illustrating the ‘art of the possible,’ radical transparency (as it was described in our conference session) requires us to hold up a mirror to current definitions and implementation. The route to meaningful improvement is through constructive, critical and continuous evaluation. A crucial first step in this is to involve a wider group of stakeholders in the debate, including suppliers (at all supply chain levels), external researchers and representatives of our local communities.

To unlock the full potential of social value, we must take a step back from the detail and go back to basics, to re-ask ourselves the bigger questions from which the movement started. What positive change do we want to see in our communities through social value, and how do we know if we are achieving it? The importance of asking these questions is emphasised in our Guide to Supporting Better Work through Procurement, which provides a framework for public sector organisations to address work quality issues through the public procurement system. There is no ‘one size fits all’ approach to social value, which is why we believe that frank discussion about challenges and enabling factors is so crucial to moving forward.

This is our time to act.

 

~Notes~

Please get in touch if you want to share learning about social value practices and evaluation, or to discuss more about our research into good work procurement.

Contact:

Dr Deborah Harrison, Carnegie Associate, [email protected]

Gail Irvine – Senior Policy and Development Officer, Carnegie UK Trust, [email protected]

 


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