This document discusses commissioning social services to achieve social outcomes and value. It describes how commissioning is shifting from funding outputs to funding outcomes. Examples provided show how organizations can create social value through their work. The document also discusses challenges in commissioning for social value, such as defining and measuring social outcomes. It provides questions commissioners should consider when evaluating social value. Overall, the document examines how to best commission social services to create social impact.

1. Commissioning and social value
PMPA, 28 November 2011
Professor Fergus Lyon
Third Sector Research Centre and
Centre for Enterprise & Economic
Development Research (CEEDR)
Funded by:
Hosted by:

2. Introduction
• Growing interest in commissioning social
outcomes
• Innovative approaches and value for money-
benefits for the public sector and service users
• Multiple objectives make contributions to a
range of public sector goals
– economic, social and environmental
• How to commission for social value and
innovation?

3. Commissioning social value
• Social value
– Measure of worth, wellbeing, above and beyond
benefit of goods and services
• Commissioning services of social value
• From commissioning outputs to commissioning
outcomes
• Best Value and beyond CCT
• Social clauses
• Limited by applying EU directives unnecessarily

4. • Hill Holt Wood
– Education for excluded
from schools
– 14 acres self sustaining
woodland using
traditional craft
– Council trained staff and
helped set curriculum
– Reduces antisocial
behaviour and costs
– Diversifying

5. Social value in the coalition
• Payment by results
• Right to bid to run local services
• Public sector worker cooperative spin outs
• Social impact bonds
• Big Society Capital
• Where will support come from?
• The Bills
– Open Public Services, DH,
– Public Services (Social Value) Bill

6. Spin outs
• Cultural, technical and
legal changes
• Uncertainty under
previous government and
current coalition
• What types of
innovation
• Claims of a Trojan horse for
privatisation?

7. Social Impact Bonds
• Organisations raise finance from private or
charitable investors
• Contracts to deliver public services and
investors paid by results
• But how to set payment, when to pay,
what indicators, how to avoid cream
skimming and can the government borrow
more cheaply

8. Measuring impact
• External pressure from commissioners and
funders ( reactive)
• Proactive decision to sustain or grow activity
– To win contracts
– To break an image
– To create a new image
– As a sign of change of character of organisation
– Provide an evidence base to find new funding
– To be professional and businesslike

9. London Early Years Foundation
•Socially inclusive fee structure
•Focus on poverty and
disadvantaged areas
•Intergenerational programmes
•Quality of provision
•Training, apprenticeships and
qualification offer
•Consideration of environmental
impact (e.g. procurement)

10. Challenges for commissioners
• Setting outcome indicators that are
measurable
• Which method – benefit, monetised or
distance travelled
• Allowing the cost of measurement in bids
• Balancing setting indicators with innovation
• Encouraging the reporting of smart failure
• Interpreting ( and trusting) the results from
providers ( in bids or PBR)
• Dangers of comparing the uncomparable

11. Six questions
commissioners should ask
1. What indicators?
2. What data and sample size?
3. Who surveyed?
4. How monetised?
5. What counterfactual or deadweight
(what would have happened without activity)
6. What reported ( and what left out)

12. Building capacity in
the Third sector
• Building social entrepreneurial cultures and
helping start up
• Advisory services
– Who - specialist or mainstream?
– Which sector - Public sector, third sector,
community groups or private
– What type- training, coaching, mentoring, on-line?
• Building confidence- of staff and board
members
• Finance

13. Social investment
• Public sector loan funds support TSO
responding to commissioners eg Futurebuilders
• Social impact bonds
• Community shares and bonds
• Demonstrating financial and social returns
• Resistance to loan finance and risk

14. Conclusion
• How to commission for social value
• Support for charities and social enterprises to
start and grow
• Support for commissioners
• Interpreting social value reporting