The vitality of local economies and high streets and people's health and wellbeing are closely linked. The government's levelling up white paper points out the link between regional and local disparities in productivity and economic growth, and health outcomes for people living in the same areas. The NHS can invest in local economies through social value procurement, prioritising local spending, and commitment to ethical practices, such as paying fair prices, ensuring contractors pay the real living wage, reducing environmental impact and spending money with businesses which commit to local employment and equal opportunities.
The Public Services (Social Value) Act (2013) requires those who commission public services to consider how their procurement practices can positively impact the wider social, economic and environmental conditions of their community. In March 2022, NHSE introduced a mandatory 10% weighting for social value in all NHS procurement, in order to meet its net zero carbon targets and achieve its wider social value priorities of reducing health inequalities, better environmental performance and delivering more value from procured products and services.
East London Foundation Trust (ELFT) has embedded social value into their procurement processes, and is working with its suppliers to support them to understand and embed social value into their business practices.
Case study
East London NHS Foundation Trust
ELFT provides community health, mental health, and primary care services across a wide geographical area, serving over 1.8 million people in some of the most deprived communities in England. The trust has a strategic objective to contribute to improved population health. This has helped it maintain a strong focus on its work to address the wider determinants of health and reduce health inequities.
As part of this objective, ELFT is embedding social value into its procurement and contract delivery processes and aims to ensure all suppliers contracted by the trust are supporting local communities served by the trust. In 2020, it asked service users and its council of governors what they would like to see in contracting, and developed five social value principles based on the feedback they received:
- ensuring suppliers pay the real Living Wage
- investment to grow and maintain spending in the local economy
- equal employment and training opportunities for local people, people with protected characteristics, service users, and groups hardest hit by the Covid-19 pandemic
- a commitment to sustainability support for young workers, school leavers and apprenticeship.
In 2022 the trust, supported by The Health Foundation and The Strategy Unit, undertook a learning review of this approach by looking at two of the trust's contracts in detail: its facilities management contract and a smaller individual website design contract.
Evaluation of these contracts showed that by applying these social value principles to its facilities contract, the average wage of cleaning staff contracted to work at the trust has increased by £197 per month. There is a focus on local employment and employing people with lived experience of mental health and veterans. The trust has also awarded over £1 million available to local voluntary and community organisations to tackle inequalities and work with communities facing disadvantage. ELFT has also increased the percentage of companies it contracts with who pay the real Living Wage from 22% in 2019 to 62% in 2022. Building relationships with suppliers has been crucial to the success of this work, and to navigate potential push back from suppliers. The trust is also supporting small and medium-sized enterprises (SMEs) to better understand how they can meet requirements around employing local people, and what this means in practice. ELFT is now refining its metrics for social value, and beginning to review other contracts to apply what it has learned so far.
As part of The Health Foundation review, ELFT is planning to develop a toolkit for social values in procurement, mainly to help smaller businesses. This will help to reduce the risk of inadvertently increasing inequalities given it is often easier for larger businesses to comply with new or changing social value requirements.
ELFT is partnering with the Institute of Health Equity to pilot Michael Marmot's guiding principles on reducing health inequalities – the anchor agenda is intrinsic to building and bolstering this work through addressing the social determinants of health inequity.