5 June, 2024

Make it impactful: the future of social value and assurance

Executive Summary

The social value sector is still relatively young and relatively immature. Those working in the sector recognise that there are issues about credibility, about veracity and about how it is sometimes used primarily as a public relations tool. For social value to be truly valuable, we need to raise it out of the numbers game, set aside the glossy reports and think about how we can incorporate non-financial reporting into business decision-making.

Assurance can play a critical role in overcoming this credibility gap. To achieve this, we need to be ambitious, evolving the use of social value and wider non-financial reporting into genuine business critical information so that it can be used on a par to financial information.

Too often, however, we see these disclosures and reports displayed as a return on investment, to reflect the financial focus that organisations have within their decision-making processes. Without the required consistency, evidence, and assurance processes, this approach will not be enough to deliver this ambition.

The controls that organisations have in place around their financial disclosures such as balance sheets, profit and loss, and annual accounts are evidenced with rigour internally, as required by investors and regulators. We need to develop the same approach to our non-financial reporting.

If we get it right, there are multiple potential benefits from social value assurance:

• confidence that the reported information can be relied upon

• to inform business decision-making

• to increase trust and credibility

• to avoid potential legal and regulatory consequences

• to improve stakeholder satisfaction

• to secure funding, at preferential rates

• to provide assurance of the procurement process

The assurance of social value in procurement is needed at all stages. For major multi-million pound contracts in areas such as regeneration, construction, asset management, and facilities management, this is even more crucial. Contracts can be won or lost on a social value offer, particularly when weighted at 10% plus.

An option to resolve this could be to look to the expertise and discipline of Quantity Surveying as a key way to cost a robust social value programme and also ensure it meets contractual and quality standards? We might also start to put abnormally high social value offers under scrutiny in the same way we would when assessing an abnormally low price.

Greater transparency and assurance in these areas would go some way to alleviate the doubts that exist around how sustainable social value programmes are and whether the social value offers and credentials of bidding organisations are robust.

Our vision is that social value – alongside other non-financial reporting – is part of a verified and recognised assurance process by 2028. We know that this will take time to establish and there will be some challenges along the way. We want to achieve this vision with practitioners, professionals and partners from across the social value sector – and beyond.

As a starting point, working alongside Forvis Mazars, we have developed a roadmap to assurance readiness for organisations to follow:

Subject matter and criteria:

• Establish the social value information that you want to assure – organisations need to establish their own golden loop of social value, building on the theory of change that they have developed.

• Map your social value against current reporting requirements.

• Consider how it will be reported in line with your organisational KPIs.

Information governance:

• Assign a senior executive to have oversight of your social value information.

• Establish which teams are responsible for collating social value information and how frequently they report to the senior executive with oversight.

Processes and controls:

• Implement processes for the effective collation, storing and monitoring of social value data, as well as monitoring changes in the criteria against which it will be assured.

• Assign responsibility for maintaining these controls.

• Clearly document the processes and controls in place.

Evidence collation:

• Establish how the evidence for each social value metric will be collated.

• Collate it in a format or through a platform that can be easily delivered to or accessed by the assurance provider.

Assurance provider:

• Liaise with the assurance provider about their expectations, evidence requirements and timelines.

• Ensure alignment on the type and quality of evidence to be provided at the outset of the engagement.

Where organisations can implement these steps early, they will be ahead of the curve. By taking these steps and embedding them, it will be easier for them to adapt when new legislation or regulations are introduced. We will continue to develop social value solutions for the built environment and local partners that meet the evolving needs and challenges set for organisations operating in these areas.

By taking the steps set out in this paper and demonstrating its commitment to assurance, the sector can demonstrate that it supports the view that social value can deliver longterm transformational impact within our communities, at a time when it is needed more than ever.

Publication download

Download the full white paper

PUBLISHED: June 2024

AUTHORS: HACT

Get in touch

HACT can help your organisation take the next steps in social value assurance and ensure you are delivering meaningful and transformational impact.

Complete the form to get in touch with our team of experts for an informal chat on how we can help.

Social value services form
I'm interested in

By submitting your details, you agree for your information to be held by HACT and for us to get in contact with you with information you may be interested in from time to time. You can opt out of receiving communications from HACT at anytime.