Contractors working for the public sector can meet social value requirements by introducing social enterprises to their supply chains says Beth Pilgrim.
A year ago, the government introduced its Social Value Model. It requires all bidders for public sector contracts to say how they will deliver social value through their work.
This has triggered a growing interest in social procurement, according to Beth Pilgrim. She is chief executive and buyer lead at supply chain optimisation consultant Supply Change.
Social procurement involves buying goods and services with the intention of encouraging companies to generate positive social and/or environmental impact.
The model sets out the government’s procurement objective with a focus on five themes:
- Helping local communities manage and recover from the impact of Covid-19
- Tackling economic inequality
- Fighting climate change
- Equal opportunity
- Wellbeing.
According to Pilgrim, companies bidding for infrastructure projects can achieve some of the expected outcomes by working with social enterprises. These are businesses that put the interests of people and the planet above shareholder gain. For example, the equal opportunity theme includes reducing the disability employment gap and tackling workforce inequality.
“This is an area where social enterprises can deliver real impact,” she says, explaining that many of these businesses employ ex-offenders, people living with disabilities and other often marginalised groups.
Social enterprises can compete on traditional procurement considerations like price, quality and risk
Supply Change has identified a healthy range of social enterprises that can be involved in construction projects.
Pilgrim says that buyers connecting with local social enterprises can benefit from these businesses’ ability to better respond to specific local needs because of their community roots and smaller size.
But will buying goods and services from social enterprises rather than conventional suppliers lead to higher costs for buyers? Pilgrim says it is a common misconception to associate higher costs with social enterprises: “They can compete on traditional procurement considerations like price, quality and risk.”
Social procurement cannot be achieved overnight though. “It does require a clear strategy and implementation process, as well as appropriate resources dedicated to it,” she adds.
It is important for everyone across an organisation to be aware of the social procurement strategy as all employees can have a role in ensuring it is being carried out, says Pilgrim.
Contractors should also make subcontractors understand their social procurement policies.
She adds that it is important for contractors to embed social procurement targets within their subcontracts.
“[With the introduction of the Social Value Model] there’s now this added incentive for the [construction] sector to put its money where its mouth is and show real commitment to working with social enterprise suppliers in their supply chain,” Pilgrim concludes.
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