How to mix social purpose with effective procurement
Social purpose, the idea that business should benefit society in some way, is an ethos often at the core of social housing provision.
The arrival of the Social Value Act (2013) backed this up, with the Government expecting people who commission public services to think about how they can secure wider social, economic and environmental benefits.
Although finding a social value outcome from procurement is still important to many social housing providers, this has been well and truly tested in recent years.
After social housing providers were asked by government to make annual 1% rent cuts, the decision on whether to stay true to their social purpose or adapt business models to the new cost-cutting regime, became a hot topic.
Some housing associations said they believed affordable housing was no longer viable and were developing alternatives such as shared ownership, market rent or outright sale. Others, including Hyde Housing, continue to describe themselves as social businesses that want ‘to provide great quality homes for those left behind by the market’. Brendan Sarsfield, chief executive of Family Mosaic, has spoken about balancing a commercial business with a social purpose, rather than choosing between the two.
So where does this leave social housing procurement, particularly where organisations want to keep looking at social value but keep costs down at the same time?
One answer is making best use of existing procurement resources. This could mean identifying and removing excessive administration and duplication of effort. If these unnecessary costs are taken out, there may well be less need to compromise on product and service quality and more room to focus on social value.
By also making the way you work with supply chain partners more efficient, or asking them to propose better ways of working, there is more chance procurement will be able to continue to use budgets to reflect social purpose.
Areas to look at could include supply chain consolidation and finding socially focussed partners who can also offer one account, one delivery and one invoice across a range of categories.
Find socially compatible partners
Working with the right supply chain partners doesn’t just help to optimise available resources, but can also ensure they work with you to keep eyes on the ball when the pressure is on in your business.
Whether it’s ensuring you’re kept informed about new products and services that support social value, or new ways of working to grow ethical practice, partners who can do this with you are ever important.
Social value can be embedded throughout the procurement and commissioning cycle from pre-procurement to contract management, to ensure that your organisation continues to uphold its values.
Get the balance right
There is every benefit to be gained from sourcing suppliers that will work with you to deliver social value, but this capability should be weighed equally alongside the supplier’s ability to deliver services and products. Neither strength needs to be compromised for the other.
Social awareness and commitment can continue to be at the core of social housing providers’ business models, but it’s essential to ensure that the fundamentals of an excellent supply chain are there. Goods have to be available, there needs to be the choice and flexibility for your business and deliveries have to be on time.