Social value in procurement needs assurance process to boost credibility, says HACT

Social value in procurement needs to be part of a “verified and recognised assurance process” carried out by a third party, The Housing Associations Charitable Trust (HACT) has said.

HACT believes that an assurance process would increase credibility in social value and ensure it can deliver “long-term, transformational impact”. It has recommended implementation of an assurance process by 2028. 

Social value in business refers to the environment and social impact that a company produces through its decisions and activities.

A HACT white paper published on Wednesday (5 June) said  that the social value sector recognises issues around the credibility of social value, noting that “it is sometimes used primarily as a public relations tool”.

The report titled ‘Make it impactful: the future of social value and assurance’, adds that “within procurement, tender submissions are often judged purely on the amount of social value that is being promised, rather than on whether this figure is realistic, achievable and based on the needs of the relevant local community”.

HACT highlights that without a transparent process and evidence base supporting social value reporting, “the fear is that there is too much focus purely on the numbers and how it looks on a glossy report”.

According to another interviewee in the report, “the ambiguous nature of social value over the last 10 or so years has troubled the commercial profit sector because they don’t understand how to communicate it”.

The Public Services (Social Value) Act was brought into law in 2012, requiring public sector organisations to consider the economic, social and environmental well-being of an area when they commission and procure services.

HACT suggests that independent assessments conducted by assurance service providers can help companies demonstrate the credibility of their reported environmental and social impact.

In auditing, one form of assurance is limited assurance, where an assurance practitioner may provide a negative conclusion if there’s a perceived risk that misinformation could impact crucial decisions made by stakeholders.

Reasonable assurance provides a more in-depth look into an organisation’s information and expresses a positive opinion on whether its non-financial reporting is being fairly and accurately presented.

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The white paper was produced with Forvis Mazars, a firm specialising in assurance, tax and consulting.

In 2020, HACT launched a roadmap to help the built environment sector use social value information to improve services, enhance decision-making and “increase its transformational long-term impact”.

Following the publication of this white paper, HACT says it will continue to develop social value solutions for the built environment sector and local partners.