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NEPO & Social ValueDiane NielsenDiane Nielsen

Deputy Director, NEPODeputy Director, NEPO

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Who / What is NEPO ?

Established in 1976 as a “purchasing” organisation

In early 2011… re-branded new business model new priorities new governance retrained staff

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Local Government Spending• £3bn spent by local

authorities in the NE region in 2011/12 (on goods & services)

• £1.83bn (61%) to NE businesses

• £1bn (55%) to NE SMEs, Social Enterprises or Third Sector

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Local Government spend in the NE

Middlesbrough3%

Gateshead8%

Newcastle28%

NorthTyneside3%

Northumberland12%

SouthTyneside5%

Stockton6%

Sunderland9%

Darlington3%

Durham18%

Hartlepool2%

RedcarCleveland3%

How the regions £1.83bn spend is apportioned across the NE…

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SOCIAL VALUE ACT 2012

� From January 2013 - requires public authorities to consider how the procurement of a service may improve the social, economic & environmental well-being of an area.

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Changing Landscape…

“… local authorities and other big commissioners should ensure the contract requirements they put in place are not too onerous for smaller social enterprises to fulfil. Requiring three years' of accounts or a £2m turnover, for example, could rule out new social enterprises that might otherwise be able to use the benefits of the contract they win in the local economy…

... There are numerous hurdles within the current procurement process which really restrict social enterprises…

Unless we really upskill SMEs [small and medium enterprises] we will have the big boys coming in and the small ones being squeezed out."

Guardian, 7 Nov 2012Guardian, 7 Nov 2012

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NEPO’s Social Value Principles� Influence the design of procurements� Work with potential suppliers � Reduce hurdles / complexities� Be specific about “added value” or “social

requirements”- “Outcomes” not “Outputs”

� Live contracts - work collaboratively with suppliers

� NEPO′s role is to help make sustainable savings by encouraging authorities to buy collectively…

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Things to consider by “buyers”…� Appropriate turnover & insurance requirements� Min. requirements on contracts below EU threshold

(£173,934) � no or limited use of PQQs

� Divide contracts into ‘lots’� Community Right to Challenge considerations� Develop & shape new markets� Engagement with NE supply base

� early dialogue with potential deliverers of services� support for suppliers

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� How do you communicate what your social enterprise is - how it works, its governance, its impact? You might have a fabulous social purpose, but how do you

demonstrate that? It can be through SROI or more personalised case studies –

really it’s a range of info that tells your story. Research Council / regional Objectives

� For smaller social enterprises - develop partnerships… identify partners to join forces with & play to your own

strengths pre-bidding “informal” arrangements already discussed / in

place in principle that can be formalised as and when required is becoming a more common approach; sometimes stipulated

within contracts

Things to consider by “suppliers”…

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Social Value in the NE Region

Proactive approaches to the Act: Middlesbrough:

Whole Life Costing model Newcastle:

Flexible Framework Living Wage

North Tyneside: New Procurement Strategy

Reinforces approaches to ‘sustainable procurement’ considerations

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Durham County Council The council was flagged up by The council was flagged up by Social Enterprise UKSocial Enterprise UK last year last year

for its best practice in mapping & engaging with all social for its best practice in mapping & engaging with all social enterprises in the area with a view to modernising its enterprises in the area with a view to modernising its commissioning approach.commissioning approach.

"Sometimes social enterprises need to change their mindset and realise they might not be able to go for contracts on their own. But getting them to bid together can be difficult… we've worked with them… and seen their bids improve. We do try to put social clauses into every contract now…

"Talk to us, read our policies, understand our strategies. Some social enterprises, like Acumen, have engaged in active dialogue with us to learn about what we want.

"There can sometimes be the impression that we should 'gift' work to social enterprises… but a sustainable wealth creation is only achieved by having a mixed economy and trying to ensure all sectors are in a balanced position. This is why we do a lot of work to help social enterprises become contract-ready."

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Where can you find out more?Where can you find out more?