Insight from Laura Wright, Director at Laura Wright Strategy
We all know the rail narrative: it connects communities and business, powers the economy and creates skilled jobs and employment opportunities. Many of us have been telling this story for years, and those of us in the rail community are proud to work in an industry that generates so much social value.
So, when it comes to procurement, that means the social value section is an easy win for rail companies, right?
Wrong.
Social value is no longer a tick box, it’s a commercial differentiator.
Social value has been rising up the government’s policy agenda for several years. Since its introduction into procurement in 2012, it has moved from a principle to be considered to a mandated element of public tenders.
More than that, the government is increasingly committed to using procurement as a tool to achieve its wider policy aims, a direction that is being continued and strengthened under Andy Burnham’s leadership. The government clearly see social value in public procurement as a lever to achieve their wider policy objectives, particularly in the areas of jobs and skills, economic growth, sustainability and health and wellbeing.
In August this year, the Cabinet Office announced that, from January 2027, social value for central government contracts would carry an increased weighting of 20% in central government contracts worth £5 million or more, alongside a new focus on creating local jobs and helping young people into employment. And it’s not just the big contracts that are giving more weight to the concept of most advantageous tender including social value. Any procurement over £100,000 is likely to have a 10% weighting to an offer in this area.
The Cabinet Office estimate that around £49bn of annual spending is influenced by social value offering. Rail – as we transition towards Great British Railways (GBR) – is estimated to make up approximately £10bn of this.
That is not simply a lot of procurement. It is a significant opportunity to shape communities, skills and local economic outcomes through the supply chain.
This social value agenda is also becoming increasingly localised.
The policy of ‘devolution by default’ means the government wants to not only leverage national policy but also local objectives set by devolved nations, and critically, devolved English authorities. In other words, suppliers are increasingly being asked not just what they will deliver, but who will benefit and, crucially, where.
Greater focus on social value, ambitious wider government policy objectives and a desire to leverage these locally are all a big shift for commissioners and bidders.
So why does this all matter for suppliers in the rail industry? Increasingly bids in our sector are being decided on the social value question.
It’s a scored question and a point on social value is worth as much as a point elsewhere in the bid. The topic needs as much thought as you put into your methodology, product descriptions and CVs. In fact, social value may now be one of the few areas where bidders can genuinely differentiate themselves from technically similar competitors.
The rail industry is no longer just asking can you deliver this project, but they want to know what legacy you are going to leave behind.
To stand out social value propositions will need to be creative and different to what your competitors may be considering. Your tender may not be judged on the quantification you give your social value intervention, but the outcomes it achieved. You will need to think about what you can change for people and places, not necessarily about just what you can invest. This is what will differentiate you, possibly more than the quality of your sleepers, skills of your project managers or sophistication of your software.
How can you do this well and win more work? Think national, tailor locally, link to your business.
Any social value commitment needs to map back clearly to delivering a wider government policy goal. More specifically it should align with any current focus of the administration. There are policy goals in housing, economy, skills and environment that could all be addressed, but the current administration has a particular focus on “to provide good British jobs, skills and opportunities in every postcode”. This means it is no longer good enough to just talk about how you are providing jobs and training in delivering your contract. You will have to demonstrate the social value. Your thinking will need to shift from “we are delivering apprenticeships through this contract” to “this is how we are changing someone’s life and local area through an apprenticeship scheme”.
Local focus is the second critical element.
To get more credit any proposal will need to be tailored to the local needs of where your contract is being delivered. Is there a particular skill shortage or underrepresented group in the area? Are young people struggling to access careers in the rail sector? Is a local employer facing recruitment challenges?
A hyper-local approach might involve partnering with a particular school, college, charity or employment service within the project area to address a specific challenge identified by the client or community.
Finally, make the most of your business.
Many bidders forget about unique characteristics, skills or offers that their own business has in delivering social value. What can your business do that nobody else can? Why would the experience and expertise within your business leverage better outcomes than a competitor? The most compelling social value commitments are often those that build on existing strengths rather than creating entirely new programmes solely for a tender response.
You are also probably delivering more social value activities than you realise. And remember, your proposals are proportionate to the size of the contract – if you are bidding for a £100,000 tender some of the work you are already undertaking within your organisation may go a long way to forming an excellent response.
There are plenty of resources out there in the industry to help you. For example, the RSSB’s rail social value tool enables you to quantify your social value impact and track progress. Network Rail has extensive information about how it views and prioritises social value in their Framework . Operators all have social value reports highlighting the kind of initiatives that are being prioritised around the industry.
Working in an industry that inherently generates social value can sometimes create a false sense of security. We assume that because rail benefits society, we will automatically score highly in procurement.
The reality is different. Clients increasingly want evidence of how suppliers will create additional value, targeted at the people and places most affected by their contracts.
The winners of future rail procurements will not necessarily be those with the most impressive social value claims. They will be the organisations that can connect national priorities to local needs and deliver measurable outcomes that leave a lasting legacy long after the project has been completed.
About the author
Laura Wright is passionate about helping those in the transport and logistics sectors to think clearly. She has more than 20 years’ experience working in rail and supports organisations to develop long-term policy and strategy enabling them to take advantage of opportunities arising from legal, regulatory and market change in their sector. Laura also supports the rail supply chain in developing successful bids and win more work.
