Social and economic value policy (HTML)

Introduction

Lancashire Combined County Authority (LCCA) encourages organisations to operate and provide works, goods and services in a way that maximises social, economic and environmental benefit to Lancashire residents, communities and businesses.

Aligned with the LCCA Vision and objectives, we will frame social value as a principle that informs our approach to delivering lasting value for our people and places. Through social value, the LCCA has an opportunity to work with partners to:

• support new jobs in the priority sectors of the Lancashire Growth Plan such as cyber security and energy
• make sure our young people and existing workforce have the right skills to take advantage of these opportunities
• enable greater co-ordination of our collective expertise, priorities, and investment opportunities
• provide a boost to business, organisations and people across the region

This policy ensures that every pound spent by the LCCA contributes directly to local priorities, aligned to the strategic vision and themes of the LCCA, in addition to key strategic plan documents (Lancashire Growth Plan, Lancashire Transport Plan and Get Lancashire Working Plan).  

The Public Services (Social Value) Act, 2012 places a requirement on public bodies to consider social value when undertaking commissioning activity. LCCA will go further by embedding social value as a central principle in both procurement and commissioning.

Furthermore, we will maximise the impact that social value can play in supporting local people and communities by using additional levers to generate social value.

What is social value?

Social value seeks to deliver wider community, environmental and economic outcomes, and evidencing the value this creates for the wellbeing of local people, communities, economies and wider society. We can do this in several ways; through the procurement of goods, works and services, or more broadly through how we operate. 

Social value can contribute to reducing inequalities, levelling up, place-making, and creating long term legacies and impact. In short, it can lever in support which can contribute to LCCAs long term strategic priority areas: 

• economic growth
• transport
• skills and employment
• clean growth and sustainability
• culture and tourism
• digital and cyber
• housing and land

(Source LCCA Vision and Objectives)

By embedding social value, our chosen delivery partners will not just be expected to deliver the core services and projects that we are paying them for, but they will also be expected to provide additional benefits to maximise the impact of our spend with them as part of their contract award. This additional value is secured by structuring procurement in a way that means that social value is part of contract delivery, ensuring that value derives to local communities at no additional cost.

Scope

This policy applies to all procurement and commissioning activity undertaken by or on behalf of the Lancashire Combined County Authority (LCCA). It is relevant to:

• all LCCA departments and services engaging in procurement or commissioning of goods, works, or services
• all contracts, frameworks, and purchases involving third-party suppliers, regardless of value, with mandatory application for contracts exceeding statutory procurement thresholds
• all delivery partners, suppliers, and contractors who are expected to embed social value into their service delivery and contract performance

The policy also covers non-procurement related social value in relation to: 

• LCCA-led projects and investments, including those funded directly or redistributed from external sources
• elements of LCCA operations, including our role as a service provider, employer, investor, and strategic leader

Purpose

This policy sets out how LCCA, its partners and suppliers will generate additional positive contributions which meet the needs of our people and communities. 

To do this the LCCA Social and economic value policy will: 

• provide a flexible framework to embed social value into procurement and commissioning, that maximises the local impact of public spending and activity
• ensure a consistent and transparent approach to measuring and reporting social value across the procurement and contract management lifecycle
• define clear methods for assessing social value in tenders and managing supplier performance in delivering social value commitments
• promote a whole-organisation approach to social value, integrating it into how LCCA operates and collaborates across Lancashire
• frame social value as a mechanism for benefitting local people and communities, through small changes in the way that we think and operate
• develop more ways of generating social outcomes beyond our statutory requirements aligned to procurement, but which are proportionate and relevant
• build on, and bring together, existing commitments made around social value through current strategies and documents 
• identify and mobilise the various parts, roles and functions of LCCA in maximising social value

Social value in procurement

The National Procurement Policy Statement (NPPS) is clear that applying social and economic value requirements in procurement can have a significantly positive impact by broadening the public benefits that are delivered through the life of the contract. In line with the NPPS, social value will be a consideration in all LCCA procurement activity. 

Social value will be embedded into the procurement process, informed by pre-procurement considerations of commissioners, with the actual approach being both relevant and proportionate to contract value. 

Social value will be evaluated both qualitatively and quantitatively according to scoring matrix based on the extent to which the needs identified in the commissioning process are met. 

To ensure the effective consideration of social value within the commissioning process, followed by effective development through the tender and contracting stages, internal support should be engaged at the earliest stages of project development. 

The LCCA will ensure that social value requirements are proportionate to the nature, complexity, and cost of each contract being procured and that procurement processes are carefully designed. This will prevent imposing overly onerous demands on tenderers that  can only be met by large providers and further ensure, broader alignment with the NPPS.

Social value in commissioning

Commissioning best practice is to establish service users as central to how services are designed and establish the link at an early stage between recipients of services and what third parties can offer. Intelligent and well considered approaches to commissioning will ensure the impact of decisions are understood and the opportunities for added community value are identified at an early stage. Rather than imposing decisions on communities, the embedding of social value at early stages will ensure that the impact of commissioning decisions is understood. This approach will help to identify the most appropriate outcomes that are desirable and achievable from each project the LCCA is delivering and build these specifics into the procurement process.

The LCCA will ensure that social value requirements are proportionate to the nature, complexity, and cost of each contract being procured and that procurement processes are carefully designed. This will prevent imposing overly onerous demands on tenderers that only large firms can meet. This ensures further, broader alignment with the NPPS.

Deciding what is social value

Each tendering opportunity will have specific questions included that seek to identify potential providers’ approach to delivering social value. These approaches will be evaluated by a tender evaluation panel. The questions asked will allow us to determine how providers intend to add value when delivering a contract aligned to the needs identified during the commissioning process. The actual detail and the approach taken will be relevant and proportionate to the nature and value of each of the contracts that are being tendered for. 

Each tender will seek to utilise LCCA’s Social Value Framework, which will set out social value measures aligned with the LCCA’s overarching priorities, ensuring that social value submissions are guided towards activity that will support LCCA strategy.  Procurers are invited to review and include TOMs (themes, outcomes and measures) which are relevant and proportional to their procurement activities. 

The LCCA TOMs measures will be kept under review to ensure that they remain appropriate. Each of the measures behind the outcomes are assigned a proxy value, following detailed analysis by the Social Value Portal, which allows social value tender submissions to be evaluated in both financial and non-financial terms.

There are several benefits to using the TOMs System. By utilising this approach, we can: 

• objectively compare and benchmark social value 
• drive better performance and hold suppliers accountable
• provide a better understanding of where we deliver value for money
• gain a deeper understanding of where social value is being generated 
• utilise a common language (the £) against the positive impact our spending brings to the area, to inform service planning and commissioning

Procurers should also give regard to utilising additional methods to secure social value, such as building social value directly into tender specifications or writing in non-TOM based requirements as part of contract awards. Where applied these should be proportionate, relevant and not raise the overall costs of contract delivery.

Below statutory threshold tenders

Whilst not a mandated requirement to include a social value weighting for below threshold procurement activity, services engaging third parties are encouraged to consider what social benefit can be derived from any third party spend.

As a minimum services seeking quotations must ensure that, where possible Lancashire based suppliers are invited to submit proposals.
Irrespective of the value of contracts that services are awarding, LCCA engagement of third parties should look to adopt certain principles in support of social value:

• encourage submissions from Lancashire based providers
• encourage use of local supply chains
• encourage submissions from SMEs and VCSFEs
• encourage providers to pay their supply chain promptly
• encourage providers to commit to the health and wellbeing of their workforce
• encourage providers to commit to training and skills development of their workforce
• facilitate commitments to working with public funded programmes and projects that provide social and economic benefits for the local area and people (e.g. Lancashire Skills Pledge)

Above statutory threshold tenders

Social value shall have a weighting of 10% of the award criteria of each tender exercise. Tenderers will be required to put forward proposals that set out what social value they will deliver, the metrics associated with that delivery and a method statement for delivery. Tenders will be assessed in both quantity terms – what is the value of the proposal (here it is important to regard the benefits of social value as an investment rather than a cost) and quality terms – to what extent does the proposal align with LCCA identified needs. 

On occasion, it may prove difficult to achieve social value from contracts, particularly within certain sectors. Where commissioning services consider that social value is not possible then this should be discussed with the procurement support service. If it is agreed that the 10% weighting applied to social value should be adjusted, then this must be agreed with and recorded by the LCCA’s Procurement function.

Procurers can also consider utilising the tender specification, or contract requirements, to build in additional opportunities to deliver social value. 

Engaging smaller and local business

We will seek to support the involvement of smaller and local (Lancashire based) businesses by removing barriers to participation and creating accessible routes to supply LCCA as a way to amplify our approach to social value and drive local benefit. By tailoring opportunities, simplifying procurement processes and providing structured engagement, we will aim to ensure that local SMEs and/or VCSEs are positioned to compete, contribute and benefit from public sector procurement. This approach strengthens the local economy, enhances community resilience, and ensures that social value commitments are both meaningful and deliverable at a local level.

To enable this, we will explore a range of potential activities such as:

• where appropriate disaggregating larger contracts into smaller lots to make opportunities more manageable and accessible for SMEs
• ringfence specific opportunities where appropriate to increase the likelihood of participation from SMEs and VCSEs
• host “Meet the Buyer” events to improve visibility of upcoming opportunities and build relationships across the supply chain
• signpost local businesses to available business support to increase their resilience
• maintain ongoing supplier engagement, ensuring continuous dialogue, feedback, and early‑market involvement
• provide tailored support and guidance to help suppliers understand, measure and deliver social value effectively as part of their contractual commitments.

Social value measurement

Social value outcomes as a result of procurement and commissioning will be measured through the contract management process. Measuring social value delivery through contracts is important for several reasons: 

• accountability: we need to be accountable to residents and stakeholders – demonstrating how we are achieving social value through contracts 
• intelligent decision making: Quantifying the impact of social value allows the LCCA to prioritise areas for future improvement
• driving improvement: By measuring social value and reviewing what we are doing and how we are doing it, we can continue to review and refine our approach and outcome 
• monitoring impact: measuring social value allows us to track progress, identify intended and unexpected outcomes and demonstrate how providers are making a difference to the delivery of our ambition for our residents

The LCCA will focus on soliciting SMART (Specific, Measurable, Achievable, Realistic, and Timely) commitments from providers which can be tracked effectively through contract monitoring.  

Social value commitments, including KPIs, will be incorporated into contracts and will constitute an integral aspect of ongoing contract management.

A series of social value themes will focus support aligned with the LCCA’s overarching priorities ensuring that the best interests of the whole county of Lancashire derive meaningful benefit. Under each theme targeted social value desired outcomes are identified.

Development of KPIs will be based on the LCCA Social Value Framework, and will be made up from relevant TOMs aligned to LCCA objectives. This set of measures has pulled together existing TOMS adopted by Lancashire County Council, Blackpool Council and aligning Blackburn with Darwen Council social value priorities with TOMs. These will be kept under review to ensure that they remain appropriate.

Each of the measures behind the outcomes are assigned a proxy value, following detailed analysis by the Social Value Portal, and which allows delivery to be reported in both financial and non-financial terms as recommended in procurement policy note. 

The proxy values are a mechanism for comparing social value offers with each proxy value derived from nationally available data and representing the value of a measure. The proxy value should not be confused with the cost of provision of a social value offer.

Contract management

Where a procurement has identified and agreed social value commitments during the tender submission stage, these commitments will become formal contractual obligations. It is the responsibility of individual contract managers to ensure that these commitments are delivered in full and are embedded within the broader contract management approach. This ensures that social value is treated as a core component of contract delivery, not an optional add-on.

Failure to effectively manage and monitor social value commitments can lead to their non-delivery. This not only results in missed opportunities to support local communities and people but also diminishes the overall success and impact of the contract. Active and intentional management of social value must therefore be central to the contract management process, with clear expectations and accountability built in from the outset.

Social value key performance indicators (KPIs) will be monitored as an integrated part of contract management. These KPIs will align with the LCCA Social Value Framework TOMs. All suppliers are required to report regularly on their progress against these KPIs and demonstrate successful delivery. These KPIs will be embedded within contracts and used to track performance throughout the lifecycle of the agreement.

Contract managers are tasked with overseeing the delivery of social value as a fundamental aspect of their monitoring responsibilities. Where suppliers fail to deliver agreed social value commitments, this will be addressed through established contract management processes, ensuring that corrective action is taken and value is protected.

LCCA will support oversight of social value in contract management through the adoption of a contract management framework. This will set out how social value will be embedding, tracked and monitored through contract delivery and support procurers and contract managers. 

To support effective monitoring and reporting, LCCA may also adopt third-party platforms such as the Social Value Portal or Compliance Chain. These tools provide structured mechanisms for tracking delivery, capturing data, and ensuring transparency in how social value is being achieved across contracts.

Wider support

LCCA procurement activity will acknowledge the role it has to play in ensuring barriers that SMEs and VCSFEs can face in being awarded public sector contracts are removed. It is in the interest of the LCCA that a broad and varied pool of suppliers is bidding for contracts and the LCCA should do all within its power to support these sectors to have the skills, knowledge and ability to be successful in tendered processes.

Anchor institutions, such as a local councils, NHS trusts, universities and other large public sector organisations, are deeply rooted in their communities and possess significant resources, influence and long-term commitments to place. By leveraging their spending power, employment practices and physical assets, these institutions can play a pivotal role in delivering social value across Lancashire. When we collaborate strategically, they can support inclusive economic growth, improve health and wellbeing, and strengthen community resilience, making them essential partners to the LCCA.

Applying social value beyond procurement 

In addition to our statutory duties around social value in procurement, LCCA is seeking to maximise the impact that social value can play in supporting local people and communities by using additional levers. 

By taking a broader view of how LCCA can create social value, we can make small changes in our thinking to operate LCCA in a way that provides maximum benefit for local people and communities. A range of objectives are set below by function that highlight additional commitments LCCA will make in driving additional outcomes across the county.

Delivering social value through projects and service delivery

We will seek to further integrate social value as an active component of project or service delivery to enable LCCA to maximise the social value it can create.
To facilitate this, we will seek to achieve more consistency in considering potential social value when selecting, developing and delivering projects. We will seek to include recognition of potential social value outputs or outcomes early in the process of developing projects. Embedding social value into project business cases or building in social value to potential project management frameworks or approaches adopted by LCCA, will enable social outcomes to be identified from the outset, tracked to completion and bring benefits to and for local people.

For example, as part of our existing commitments we will roll out the LCCA Project Prioritisation Framework that captures social and economic benefits to ensure that projects in support of delivering the Lancashire Growth Plan are selected based on their proposed benefits. We will track the success of this approach, and if appropriate, further develop the principle of social benefits informing decision making. 

We have already committed to track the success of the Lancashire Growth Plan using KPIs aligned with the national Social Value TOMs (Themes, Outcomes, Measures) Framework, a common measurement framework for social value. Within this approach we will: 

• develop measurable KPIs that include social value indicators
• align the performance dashboard with social value TOMs
• publish progress reports and gather stakeholder feedback to ensure transparency and continuous improvement

As part of supporting the application of social value across LCCA we will engage each thematic area (transport, skills, economy etc) and seek to identify specific opportunities from within each theme. Any additional activities will be proportionate and realistic to deliver to the scale of the service.

This will seek to embed good practice and create specific ways to achieve social value based on the specific opportunities each theme provides. 

Where new organisational strategies are drafted, in support of LCCA thematic areas, we will seek to reflect social value within them, if appropriate. For example, we will explore the potential role any future Lancashire Spatial Development Strategy can play in supporting the development of social value. 

Where future devolvement of funding or functions takes place, we will actively review and suggest bespoke social value approaches to support early embedding of social value into service delivery. 

Delivering social value through LCCA investment  

Aligned with the LCCA Vision and objectives, we will frame social value as a core value and principle in investment and external funding, ensuring that our work delivers lasting value for people and places. 

Where LCCA provides significant funding, investment or grant agreements, we will explore proportionately identifying opportunities where social value can form part of the approval process, or simply be measured. By doing this we can understand the social value outcomes delivered and more clearly measure the impact of our investments, beyond key deliverables.  

Processes that support investment and funding decisions should consider, where it is practical and proportionate, to demonstrate that social value has been considered and has a plan to ensure it will bring benefits to and for local people. Applicants should be invited to put forward social value commitments that can be embedded within delivery, whilst not raising the overall cost of investment e.g. a commitment to local supply chain or recruitment. 

Where funding or investments have been made with a social value output included, we will seek to monitor outcomes to enable LCCA to fully understand the social impact of the investment made. 

Delivering social value as an employer

We will seek to embed the principle of maximising the impact our workforce, policies and practices play in generating social value. In developing approaches, aligned to the LCCA’s role as an employer, LCCA will use one of its most effective mechanisms in securing additional social value. 

Principally LCCA will create social value through the provision of high quality, Lancashire based employment opportunities. As a tangible step in the delivery of social value, LCCA will seek to support skills development, career progression and opportunities  for local people through the development and application of initiatives such as apprenticeship programmes, mentoring and progressive recruitment. 

LCCA can also play an enabling role in generating social value by providing enabling support for employees to play positive role through initiatives that support Lancashire's many communities. 

LCCA will also aim to create an inclusive workplace that supports fair pay, accessible employment, and opportunities for all. This could include initiatives such as employer accreditations , adopting flexible working conditions to reduce barriers to employment, or the adoption of various covenants or programmes to support groups that experience barriers to work. 

LCCA will also play a role in enhancing employee wellbeing and engagement through the provision of proactive workplace practices and positioning itself as an exemplar employer. This could include delivery of workplace health and wellbeing initiatives or partnering with programmes, such as Connect to Work, which aims to embed support within the workplace for those at risk of exiting the labour market. 

Using our role as a strategic leader and anchor institution to deliver social value 

LCCA can play an enhanced role in supporting social value generation across Lancashire due to the strategic and influential role it will have in steering the socio-economic development of the region. Within this context we will seek to maximise the role social value can play through our position as a growing anchor institution and strategic leader.

We will also seek to continue to engage other Lancashire anchor employers and public sector organisations to gain wider buy-in to social value through initiatives such as Lancashire Social Value Practitioners Group. Furthermore, we will strive to engage different sectors through Lancashire Social Value Network to make it easier for organisations to deliver social value in Lancashire. 

Reporting, governance and oversight

To be successful in delivering the aims and ambitions of this Policy, LCCA will require the capacity to deliver, monitor and improve its approach to social value. Embedding social value into LCCA will take time, effort and support from across the organisation, its leadership and constituent members.

To ensure we have sufficient buy-in, understanding and capacity to deliver on our organisational aims we seek to put in place a range of support to enable this work to be successful. 

As the LCCA develops, we will establish a cross functional LCCA social value steering group, seeking to gain representation from across LCCA and key corporate functions e.g. procurement. As part of this process, we will seek to use the steering group to help maintain momentum and focus, coordinate activities, and integrate social value. We will identify objectives that will be owned and overseen by the steering group to support delivery. 

We will also review the activities and outputs produced by the social and economic value policy through a reporting process that compiles the outputs created across the broad scope of the policy and identify any improvements that can be made in future years. 

It is proposed that this is reported through LCCA’s Skills Advisory Board, with this body making recommendations to LCCA Leadership on future amends or directions in which activities aligned to the policy should be taken. The Lancashire Business Board will also be supported to play an important role in advocating for the role of social value across Lancashire. 

Constituent councils of the LCCA have worked together to ensure this policy reflects the needs of the whole county. It will be kept under review to ensure it remains relevant and contributes to positive outcomes.