Reinventing Corporate Social Responsibility in Local Communities Through Small and Medium Enterprises (SMEs)
In the last three years, social value has become a significant factor in public procurement, and SMEs are now required to demonstrate how they can deliver on government social value priorities to win government work.
Aligning with Procurement Act 2023 Requirements
The Procurement Act 2023 emphasizes long-term public benefit, and authorities are mandated to set at least three social value Key Performance Indicators (KPIs) in contracts over £5 million. SMEs should prepare to demonstrate their commitment to these targets, ensuring their social value propositions are clear, specific, relevant, and measurable.
Utilizing Standardized Measurement Frameworks
Tools like the Social Value TOM System™ help SMEs quantify and report social impact with third-party validation, delivering credibility and clarity to their social value claims in bids. This complements the Social Value Model used by government buyers to evaluate tenders.
Focusing on Local and Community-Specific Impact
SMEs should articulate how their social value activities directly address local community needs, leveraging examples such as environmental improvements, supporting charities, work placements for disadvantaged groups, or community outreach programs. Concrete actions with timelines and measurable outcomes are crucial.
Building Internal Capability and Processes
Investing in staff training around social value, creating systems to track commitments and results, and possibly collaborating with social value experts can increase an SME’s ability to deliver on promises and report effectively.
Preparing Social Value Collateral and Evidence
SMEs should curate evidence of past social value delivery, gather feedback and scores from prior bids, and embed social value in their corporate priorities to demonstrate sustained commitment beyond a single contract bid.
Pricing Bids Competitively but Realistically
While price remains a key evaluation criterion in public contracts, SMEs should avoid undercutting to preserve legitimacy and ensure they can deliver promised social value initiatives without budget overruns.
The National TOMs Framework: A Useful Resource
The National TOMs framework is a resource that SMEs can use to measure and maximize social value. It helps businesses provide evidence and verify their social value efforts, allowing for data-driven decisions to be made to increase social value.
Social value is more than just a figure on a page; it is a commitment to create an impact in everything a company does and the difference its work has on individuals and communities. The importance of providing concrete evidence of a company's commitment to social value in order to win government work cannot be overstated.
Tangible, defined activities, delivered with local partners, are key to providing concrete evidence of a company's commitment to social value. Under the social value model, a minimum of 10% weighting is given to social value delivery when awarding central government contracts.
Recording all social value activities a company does, such as upskilling employees, supporting local heritage and culture, promoting sustainable practices, or supporting volunteering, can help businesses understand their impact and align with public sector organizations. The National TOMs framework allows for data-driven decisions to be made to increase social value.
Social value is designed to ensure that the needs of the community and environment are considered, alongside other values such as financial and productivity gains. As social value becomes more important, all must learn to embrace it. Last year, one in three Gen-Z workers rejected job offers due to an employer's social value commitments not aligning with their own, highlighting the importance of this shift.
By following these strategies, SMEs can strengthen their public sector contract bids by clearly demonstrating how they will deliver genuine and measurable social benefit to their local communities, thus aligning with contemporary procurement expectations and increasing their chances of winning contracts.
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