The act is a year old but what does social value actually mean?

people forming a circle

by Alex Addyman

On 31 January 2013 the Public Services (Social Value) Act, or simply the Social Value Act as it is more commonly known, came into force. The law was a turning point for many organisations, particularly social enterprises, with Social Enterprise UK considering it to have: “the potential to transform the way public services are commissioned, requiring public bodies to consider choosing providers based on the social value created in an area and not on cost alone”.

However, despite being in operation for over a year, the definition of social value remains unclear.

The Act itself made little attempt to define social value the other than by implication: “how what is proposed to be procured might improve the economic, social and environmental well-being of the relevant area”. This in itself throws up another difficult to define term through the use of ‘well-being’. Therefore it is worth turning to other sources to attempt to define the term.

As a term ‘social value’ pre-dates the SVA by centuries. The earliest titular mention, according to a recent WorldCat search was in 1872 in an article exploring the social value of the British Medical Association. For the Social Value Act, finding a definition which is both contemporary and contextually relevant is therefore necessary.

The New Economics Foundation notes the lack of clarity or authority around the term but suggest that many definitions share a common approach:

“There is no single authoritative definition of ‘social value’. Nevertheless, several leading organisations in this field do provide similar explanations of it. These explanations are almost always within the context of measuring social value.”

New Economics Foundation

It may seem paradoxical to attempt to measure something without a clear definition but, in a policy context in which the accountability of public investment through outputs and outcomes is paramount, the need to measure social value is clearly important. Although the actual Social Value Act does not support a particular definition, the research paper that led to it would appear to support Social Return On Investment (SROI) as a definition as does a Demos paper from around the same timewhich suggests social value includes softer outcomes measured by SROI.

Others are more specific in their definitions. Social Enterprise UK, for example, define it specifically in relation to service commissioning:

“Social value” is a way of thinking about how scarce resources are allocated and used.  It involves looking beyond the price of each individual contract and looking at what the collective benefit to a community is when a public body chooses to award a contract.  Social value asks the question: “If £1 is spent on the delivery of services, can that same £1 be used to also produce a wider benefit to the community?”

The NHS North West Social Value Project (2010) is even more limited in its definition, suggesting that social value is “…the value that non-governmental organizations (NGOs), social enterprises, social ventures, and social programs create”.

In contrast there are others who believe that social value is something more intangible and by consequence harder to measure. Dees and Emerson (2001), for example, see social value as the improvement of individuals or society as a whole through various inputs and/or policies. For them it includes things such as cultural performances, enjoying a hike in the woods or living in a more just society.

So what is social value?

The SVA is undoubtedly a welcome move by the government in highlighting that services must show more than just economic impact. However in the absence of a definition or consensus it is increasingly likely that social value will become = social return on investment (or a similar econometric tool) effectively quantifying and monetising investment in social value. In the era of accountability this is perhaps no surprise but surely this misses the point of social value?  As Dees and Emerson note, social value is about outcomes as much as outputs. Only when policy makers and politicians lose their obsession with accountability and ‘bang for buck’ will social value truly show its value.

Recent Information Service articles on Social Value (you must a member to access these links)

Friends with benefits (social value in public services), IN MJ, 16 Jan 2014, p20

Exploring the mixed benefits of outsourcing public services, IN MJ, 19 Dec 2013, pp16-17

Surviving or thriving: tracking the impact of spending cuts on the North East’s third sector – Newcastle study


Dees [n.d.]  “..Taken from a personal email from Greg Dees to Jed Emerson as they debated the nature of Social Value and efforts to describe its essence.”

Demos (2012) ‘Measuring social value the gap between policy and practice’

New Economics Foundation (2014) Our work: Social Return on Investment

Shettle, R., 1872. An Address On The Scientific And Social Value Of The British Medical Association (Article, 1872) []. Br. Med. J. 2, pp. 677–679.

UK Parliament, 2012. Public Services (Social Value) Act 2012, HC Bill 238.

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