Environmental, social, governance (ESG)

Measurement: A double-edged sword for social value

We’re all positivists now. Although there are a few ‘heretics’, generally, it seems that the march of the measurers has been a successful one. Nearly every charity that I speak with is interested in measurement and finding ways to report on its impact, though most are held back by the lack of time, resources or experience. Overall, this is a step forward. But we should also be cautious.

Measurement is inherently idiosyncratic given the diversity of the sector and vast range of different outcomes that they are trying to achieve. This is not merely diversity by issue, but also diversity by size. There can be no measurement approach that fits all. So my eyebrows were raised slightly when I read about the government’s desire to develop a methodology for commissioners to assess the additional value provided by a social value contract and set standards for measurement in Lord Young’s Social Value Review.

Of course, commissioners need support in measurement – but not through standards and one-dimensional measurement methodologies. The Social Value Act’s purpose was to try and break down one monolithic measurement structure (the price mechanism), not to build a new one. Social value commissioning should be primarily be about forcing an end to ‘easy’ commissioning where bidders merely come forward with everything neatly packaged in price. It is about encouraging commissioning bodies to engage with their local communities to consider a much bigger question: What is valuable locally? The truth is we often don’t know because we don’t bother to ask.

Voluntary organisations and social enterprises are, I believe, best placed to deliver social value because they take the first step of asking what the local community needs and then build themselves around that. That is because they are more connected with end-users and they encourage an open dialogue with their communities (at their best). Private businesses, particularly when it comes to service delivery, tend to assume that the commissioner knows what they want and it is just a question of delivering the biggest outputs for the lowest possible price. If we drive towards standardisation of social value accounting, then we are going to cut down these conversations before they begin. It is no surprise that in the review we find that “big businesses told us they wanted better measurement of social value to help them progress this further.”

There is a real danger that focus on standardising measurement will merely help big organisations who can game the system, in the same way that big business games the current public service market through competition on price. Big organisations will encourage commissioners to focus on outcomes that they can easily provide, even if they are not particularly valuable. In order to support social value, we don’t need measurement standards and methodologies. We need something more like a ‘meta-tool’ – a tool for creating bespoke standards and measurement methodologies for commissioning areas (a dry term, sorry). An apprenticeship in London is not the same as an apprenticeship in Liverpool. Improved green space in Birmingham is not the same as improved green space in Bristol. We need to accept this and embrace this.

A very limited survey (although still insightful) by the University of Birmingham in May 2014 highlight the growing gap between commissioners that focused on ‘hard’ economic outcomes in comparison with voluntary organisations which are focused on ‘soft’ social outcomes. Unless measurement is a conversation between commissioning bodies, the voluntary sector and social enterprises and communities, there is a danger that social value will not lead to greater sector delivery and it will lead to one-dimensional focus on apprenticeships or work experience placements. Commissioning will continue to be a closed loop and we will not tap into the wealth of knowledge and capital in our communities. This would be a missed opportunity.

Decision making is also linked to the development of robust local commissioning strategies, rooted on consultation with communities on their view of their needs (that is the only way that public service delivery can remain a democratic process). The report does not touch upon this significantly, and it is a gapping lacuna. This creates a challenge of course. How do commissioning bodies find the time and resource to do this? How do voluntary organisations balance their producer interests with the needs of communities? How do we engage local communities in strategy building? How do we ensure a balance between economic outcomes and other, no less important, environmental and social outcomes? These are big challenges but if we don’t move quickly, the ‘social value moment’ is likely to be lost. PS. This blog doesn’t review the Review, that is because Mr Paul Winyard of NCVO has already done an excellent short blog post on it.

This post was last reviewed on 18 October 2018 at 16:29
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