Social value commissioning: towards an effective implementation

Our first regional spin-out camp (Manchester, 29^th March) hosted a discussion on the theme of Commissioning and procurement with social value based on the set of questions for debate outlined in the Transition Institute’s draft paper circulated prior to the event. The packed audience of extraordinary delegates that accompanied us on the day gave us some thought-provoking and challenging feedback and further research was conducted to feed our final publication which is now being artworked and getting ready for print. The aim of this blog post is to highlight the main findings and recommendations of such publication prior to its release.

In line with the Transition Institute mission and values, we place a special emphasis on the current state of social value commissioning and how it should evolve to keep consistency with government’s commitment to opening up public services to a network of diverse and innovative providers that blend the best of the public, private and social economy.

What does a social value commissioning model look like?

Commissioning practices that truly embed social value are still at early stages of development, but it is possible to find examples of good practice such as the outcome-based commissioning model developed by the London Borough of Camden regarding mental health services or the East Sussex’s model of commissioning health, social care and well-being outcomes. It is also possible to find some useful general guidance developed by different organisations such as the National Audit Office, the Social Return on Investment Network or the New Economics Foundation.

The two case studies abovementioned can serve as a guide to others seeking to embed social value into commissioning with a special focus on harnessing third sector and local provision. Some features of these models of best practice (such as stakeholders’ involvement) are further analysed below.

How do we ensure social value is captured throughout each stage of a procurement process?

In our draft paper, we refer to the Work Programme as an illustration of a procurement exercise that did not capture and reward the potential wider social impact of the services being contracted. Its payment-by-results financial structure required a considerable amount of capital investment that made it largely inaccessible to a range of small socially driven organisations.

If government is to fulfil its commitment to opening up public services in a way that enhances the role of third sector organisations and small local businesses and maximises social value, service users and both current and potential providers should be heard and involved at the very start of the commissioning cycle, before service and contract specifications are defined. A small local provider might not have a figure to prove its impact to commissioners, but instead it might have an extraordinary track record of delivering social value within the community that could be captured, for instance, through consultation with service users and other local stakeholders.

How can commissioners and practitioners work jointly on this agenda?

There have been a variety of tools and methodologies developed by a range of organisations to measure value in different contexts, as well as different outcomes-based commissioning models applied. However, jointly developed approaches in which both commissioners and providers balance their views and expertise around social value are the key for success.

Linking provision to commissioning through social value

• Needs assessment | Impact on needs:

Individual organisations are part of a wider system of public services where different interventions can contribute (positively or negatively) to the same outcomes for the same target group (e.g. disabled people, young people, etc.). Where possible, commissioners seeking to maximise social value should try to develop commissioning frameworks based on system-wide needs assessments.

Needs assessment should be informed by consultation with relevant stakeholders including service users, current and potential providers. This is easier said than done and can be seen as a resource-intensive process, but local authorities have a rich track record in developing community engagement structures and several mechanisms are already in place which should be harnessed – e.g. joint strategic needs assessments (JSNA) aimed at developing health and well-being local strategies, which are in turn used to inform local commissioning.

Harnessing existing and/or new statutory mechanisms is especially relevant in the current economic climate to optimise resources invested in the commissioning process itself.

• Outcomes:

Once needs have been identified and priorities agreed, it is time to articulate the associated outcomes. Those outcomes will inform service design (from the provider point of view) and tender specifications (from the commissioner’s perspective) in order to deliver/buy positive social change rather than outputs counted.

Outcomes have to be translated into indicators by which providers will report and commissioners will evaluate whether the specified targets have been achieved. Again, the process of linking outcomes to indicators should be jointly developed, tailored to local needs and priorities. Social value is not easily objectifiable and there is a lack of common standardised indicators to be used. This is not just because we are at early stages of development, it is also due to the inherent complexity, diversity and subjectivity of such value. However, proxies and indicators are needed when commissioning services and there are several resources which might help to go through the process:

The JSNA core dataset and indicators developed by the Department of Health and the Health and Social Care Information Centre.

WikiVOIS is a new online open resource, led by the SROI Network, which aims at developing a database of Value, Outcomes and Indicators for Stakeholders.

Better Care, Better Value Indicators developed by the NHS Institute for Innovation and Improvement.

• Outputs and services:

Commissioning for outcomes that seek to maximise value for the community has the extraordinary advantage of allowing continuous improvement in service planning and design. It should enable innovative supply solutions to flourish as well as better understanding and rewarding what works. Therefore, the commissioning climate has to be ready to think about needs and outcomes and give voice to providers in devising how services could be better shaped to meet those needs and achieve those outcomes.

How can we look to longer term impacts that will only be achieved after projects are completed?

Social value is multi-dimensional. It can have a variety of components and some of them will only produce quantifiable impacts in the long term. If commissioning processes fail to take into account these long term effects when allocating resources, the public service market will be discouraged from providing preventive interventions such as early years support. Such programmes are highly valuable both in social and economic terms. When carrying needs assessment and setting outcomes, a social value commissioning framework needs to consider those impacts.

Traditional commissioning processes could also be combined with the use of innovative tools for social investment, e.g. social impact bonds. Social impact bonds link investments by commercial investors or foundations to a programme of actions to improve the prospects of a target group, so that future payments will be made based on the outcomes achieved. Its application was first piloted in England in funding prisoner rehabilitation at HMP Peterborough. The programme is being run by a coalition of third sector organisations led by Social Finance. Investors will receive a return on their investment only if reoffending rates decrease by an agreed target with the Ministry of Justice. Six additional social impact bond projects are now to be launched, supported by the Department of Work and Pensions.