The race to the double bottom line
With the public sector remaining under pressure to increase efficiencies and demonstrate value for money, Fusion21’s Chief Executive, Dave Neilson, addresses why now is the perfect time for procurement to measure ‘the double bottom line’.
As a result of operating in increasingly challenging climates, public sector organisations are placing even greater pressure on their procurement teams – with departments tasked to build business resilience by generating savings and demonstrating value for money.
Success of course is assessed on the reporting and measurement of efficiency gains – but since the introduction of the Public Services (Social Value) Act 2012, procurement has gained an added responsibility.
It is now considered best practice to embed social value within procurement activities - and this brings with it a whole host of social, quality, economic and environmental benefits.
Social value programmes are vital to supporting the growth, stabilisation and development of communities, and can offer a variety of positive outcomes – from tackling worklessness and social exclusion in disadvantaged areas; to improving digital inclusion; reducing offending; and removing barriers to learning.
There is now more at stake than just seeking quality, whilst driving down cost and improving efficiencies.
Measuring the performance of social impact alongside efficiency gains, brings a new dimension to the concept of value for money – as this combination enables organisations to focus on generating savings that have a long-term impact past the point of commissioning.
Adopting this method can also increase service quality and lead to cross-departmental savings – in addition to creating opportunities for partnership working, and enhancing relationships with contractors and the supply chain.
At Fusion21, we practice this whole package approach to procurement, and ensure that members accessing our procurement services also benefit from the generation of social value.
Our members are supported to create social outcomes that are tailored to their own procurement projects.
Fusion21 has always remained passionate about transparency and sharing measurable results with our members – that’s why when delivering social value projects we provide members with auditable outcomes, which are captured and measured against clearly defined objectives.
In addition, our members benefit from receiving the calculated social return on investment achieved by their procurement projects. (In 2014-2015 Fusion21 generated £13,901,647 of social return on investment for members – in addition to £13,243,226 in efficiency savings.)
In the face of continued scrutiny – and amid ongoing cuts to budgets and services - securing sustainable and long-term savings will remain a high priority for the public sector.
The ability to report and measure efficiency gains alongside social impact has boosted the overall value of procurement - and I’m sure you’ll agree, the race to the double bottom line makes our jobs a lot more interesting.