Powering social value through recovery

Yesterday we released our yearly analysis of the contribution that Manchester City Council’s procurement spend makes to the city’s economy and how it can support the achievement of wider social and environmental outcomes. Here, David Burch, lead analyst on the project discusses the findings and the broader implications of progressive procurement.

For the past 13 years, CLES have been working with Manchester City Council to harness its procurement spend and maximise the economic, social and environmental benefit generated for its people, place and the planet.

Our collaboration has helped build a more inclusive economy in the city. The early adoption of an ethical procurement policy, a unique social value weighting of 20% in the tender process and a focus on supplier engagement in areas of deprivation has put Manchester City Council at the forefront of progressive procurement practice.

The pandemic has shone a bright light on how important public expenditure is to all of our lives and livelihoods. It has reinforced how vital a role procurement and commissioning are as a lever for driving social value, changing the nature of the commercial economy by helping to drive public values back into public spending.

“put control back in the hands of local people”

Progressive procurement is one important part of community wealth building: a systems approach to economic development built on local roots. It aims to reorganise local economies to put control back in the hands of local people, with wealth being generated, circulated and held locally. CLES is working with councils, combined authorities and devolved nations across the UK to build community wealth and create good local economies for all.

In Manchester, our work has inspired changes in the behaviour of both procurers and suppliers to realise real impacts for the local economy and its residents. It has also inspired other authorities, institutions and places to think differently about the role of procurement in local economic development. On 11 March 2021 CLES organised a virtual event chaired by Carol Culley, Deputy Chief Executive and City Treasurer of Manchester City Council, where nearly 200 suppliers, buyers and policymakers signed up to learn and discuss the role of powering social value through recovery.

From policy to practice

David Houliston and Peter Norris – Manchester City Council’s Strategic Lead Policy & Partnerships and Work & Skills Specialist respectively – outlined an update on the Council’s social value actions throughout the year, including the priority actions they have undertaken to meet the challenges presented by the economic impact of Covid-19, and further work towards the zero carbon commitment.

Neil McInroy – Chief Executive at CLES – presented our analysis of the economic, social and environmental impact of Manchester City Council’s procurement spend. Our analysis from 2019/20 found that £353m out of a total spend of £511m (with the top 300 suppliers by value of spend) was spent with Manchester based suppliers, a proportionate rise of 17.7% since our work began in 2008.

We also presented our findings on the wider impact of this procurement work (gathered through a survey of the supply chain), in which we found:

These figures are evidence of the power of progressive procurement practice to address local economic, social and environmental challenges facing the city and city region at street level.

Throughout the event, contributors shared practical examples of where the social value agenda is delivering real change on the ground, with particularly timely emphasis on the role that progressive procurement can, and does, have in addressing the fallout from the COVID-19 pandemic.

Going forward

Manchester City Council continues to be at the forefront of progressive procurement policy and practice in the UK.

The next step therefore is to embed social value as a way to address the two biggest challenges we face today: recovery from COVID-19 and the climate emergency.

Making social value central to Manchester City Council’s approach to economic recovery requires it to be deeply embedded into commissioning specifications so that the whole frame of service design aims to maximise social value and towards a demonstration of suppliers’ social value impact as part of contract management.

Manchester City Council has made good process on using social value to tackle environmental issues, but it could maximise its impact by building capacity to use procurement and commissioning to address the climate emergency and tackle carbon emissions by sharing practice within the city through collaboration with anchor institutions.

For the city to make social value a golden thread running through its approach to recovery, all of the Council’s investments must not only power economic recovery but wider benefits for the city, its residents and the planet. Generating, maximising and making the most of every ounce of social value will be absolutely critical for Manchester to thrive beyond Covid-19, address the city’s inequalities and move us towards a green recovery.