Developing trends in Management Accounting.
We talk regularly about how Management Accounting isn’t just about financial information, non-financial is also very important.
With contracts now requiring consideration of social value we had better be able to measure and report on our impact on social value too.
New focus on social value in central government contracts
United Kingdom November 23 2020
Public bodies must now take account of social value in the award of central government contracts following the publication of Procurement Policy Note 06/20 – taking account of social value in the award of central government contracts (PPN 06/20) (24 September 2020). Published alongside the government’s response to the Social Value in Government Procurement consultation (on which, see the table for more detail), this latest PPN provides a new evaluation model to deliver social value through the government’s commercial activities.
Effective from 24 September 2020, PPN 06/20:
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- applies, from 1 January 2021, to all new procurements covered by the Public Contracts Regulations 2015 and to all Central Government Departments, their Executive Agencies and Non-Departmental Public Bodies (In-Scope Organisations);
- requires social value to be explicitly evaluated in all central government procurement rather than just “considered” as currently required under the Public Services (Social Value) Act 2012;
- requires In-Scope Organisations to be familiar with the evaluation model (at Annex A of PPN 06/20) and to ensure that relevant employees undertake specified e-learning; and
- requires commercial teams to select objectives that are relevant and proportionate to their procurement and apply a minimum weighting of 10% of the total social value score in the procurement (or higher where justifiable).
The themes covered in the evaluation model are: COVID-19 recovery, tackling economic inequality, fighting climate change, equal opportunity and wellbeing. Delivery objectives are set out to show “what good looks like” such as the scope to create opportunities for entrepreneurship and help SMEs grow. Application of the model is compulsory and detailed guidance on how it is to be applied will be published shortly to ensure consistency of approach and a standardised process for defining social value. Consequential updates to the Growth Balanced Scorecard (PPN 09/16) are also expected.
PPN 06/20 is intended to promote new jobs and skills, encourage economic growth and prosperity, tackle climate change and level up the UK. SMEs and social enterprises will be better able to demonstrate the full extent of the value they would generate. “Value for money will still be paramount, but a bidder’s social value score will be incorporated into assessment of contracts” (see the press release).
This article was first published by Construction Law magazine on 3 November 2020 and accompanied the “State of Play 254“.
Original posting on website here.