May 30, 2012

Julian Cox, Matt Bowen and Oliver Kempton reveal how a new model combining existing methodologies could make it easier for organisations to measure social value

In the April edition of New Start, there was a focus on the Public Services (Social Value) Act 2012 and how this could be put into practice. In Greater Manchester, partners have been using cost-benefit analysis to shape how they think about public services and how they might be restructured to save costs and improve outcomes.

We carried out research into how these methodologies can be extended to take full account of social value and have recently published a New Economy working paper entitled Social Value: Understanding the Wider Value of Public Policy Interventions. We hope that through this work we have developed a robust, but proportionate approach to including social value in our decision making.

It was evident from our research and the launch session we held for the paper that there is a real appetite to understand social value from all sectors, particularly as the landscape of public sector spending has changed dramatically in the last few years. Commissioners and providers have faced a series of simultaneous challenges including:

• Substantially reduced public sector budgets. As a result of the financial downturn and the government’s response to budget deficit, local authority and other public sector agencies are contending with budget cuts of over 20%

• A drive for localisation of spending decisions

• An increased interest in the role that the private and third sector can play in the delivery of services.

In light of this, there is a real desire to have tools and methodologies to assist with decision making and to prioritise where to focus expenditure. We believe, and our research corroborated this, that in order to make more informed decisions it is essential to include social value in these processes.