**London**: Michael McLaughlin of LHC Procurement Group discusses the new Procurement Act’s impact on procurement strategies, advocating for the integration of social value to enhance community outcomes. Emphasising collaboration with local authorities and SMEs, he highlights the significance of this shift for addressing pressing social issues in the UK.
Michael McLaughlin, the group social value manager at LHC Procurement Group (LHCPG), has provided an in-depth overview of the evolving landscape of procurement in relation to the new Procurement Act, highlighting its potential for creating meaningful social impact. His insights are particularly relevant in the context of the increasing interest in social value among public, charitable, and commercial sectors, driven by both legislative changes and a growing recognition of the importance of these initiatives.
The introduction of the new Procurement Act this year mandates public sector buyers to transition from awarding contracts based solely on the Most Economically Advantageous Tender (MEAT) framework to the Most Advantageous Tender (MAT) approach. This legislative shift marks a significant pivot in procurement strategy, aiming to integrate social value more thoroughly within procurement practices. As McLaughlin notes, historically, procurement has been overly focused on merely exchanging goods and services. However, this new legislation is expected to solidify social value as a crucial component of procurement discussions and decisions.
In particular, the recent Chancellor’s Budget underlined social housing as a critical element of the UK’s built environment. Despite its potential societal benefits, social housing is often mischaracterised as a financial burden. To counter this perception, there is a pressing need for social value objectives to be embedded into procurement frameworks, ensuring that the focus extends beyond mere housing delivery to also enhance the quality of life for residents.
The challenge of generating impactful social value goes beyond statistical benchmarks, as outlined in HACT’s white paper, “Make it Impactful: The Future of Social Value and Assurance”. McLaughlin emphasises that social value must be treated as a business-critical metric, necessitating robust governance and clear metrics to ensure that outcomes meet the actual needs of communities.
One of the main challenges associated with social value delivery is maintaining the credibility and transparency of outcomes. McLaughlin pointed out that social value metrics often lack the same level of scrutiny applied to financial reporting, fostering scepticism regarding their reliability. He references HACT’s white paper, which highlights the necessity of addressing this credibility gap, particularly in high-value contracts.
LHCPG advocates for procurement strategies that go beyond traditional cost-saving measures. The group’s frameworks are designed to enhance social, environmental, and economic wellness. To ensure clarity in their operations, LHCPG actively works to incorporate assurance practices into their frameworks, establishing transparent processes for measuring and reporting social value. This commitment is aligned with the “golden loop” principles recommended by HACT, where insights from past initiatives inform future strategies.
The group’s regionally tailored frameworks, aligned with their social value strategy for 2024–2027, also place emphasis on locality, focusing on the distinctive needs of communities across England, Scotland, and Wales. In pursuit of maximising social value, LHCPG fosters collaborations with small and medium-sized enterprises (SMEs), thereby facilitating local economic resilience.
McLaughlin elaborated on the partnerships formed with local authorities to address pressing issues such as food and energy poverty, while also promoting social mobility and generating local employment opportunities. Social value remains central to the frameworks being developed by LHCPG, including the Retrofit & Decarbonisation (N9) and Roofing Systems (RS5), which are designed not just to fulfil procurement needs but to deliver long-term environmental and social benefits.
Additionally, LHCPG operates as a not-for-profit entity, enhancing their social impact by reinvesting in community initiatives through projects such as their Community Benefit Funds, which are directed by regional committees aimed at delivering substantial positive change. The organisation’s commitment to social value is further reinforced through staff engagement initiatives, including dedicated volunteering days that empower employees to contribute meaningfully to community initiatives.
Moving forward, LHCPG aims to set a benchmark in the sector with their socially conscious frameworks. Since joining in 2024 as the first dedicated social value manager, McLaughlin has collaborated closely with various teams to maintain an unwavering commitment to transparency, collaboration, and measurable outcomes. Through these efforts, LHCPG seeks to demonstrate the transformative power of procurement, positioning it as a tool for fostering thriving, resilient communities across the UK.
Source: Noah Wire Services
