The First Ark Group’s Social Value Procurement Model
Creating social value is at the heart of the First Ark group’s approach to doing business and we are constantly challenging ourselves to generate as much social value we can for the communities in which we work in a whole variety of creative ways – including procurement.
By doing things differently and changing the way we buy goods and services, not only have we realised over £2.3m procurement savings for the Group over the last two years, we have also improved the social value we get from our supply chain – and that’s a real win for our local communities and the people who live and work in them.
Social value is now a primary consideration in all of the Group’s procurement activity, and we’re delighted to be able to share with you some of the key successes we have achieved so far.
Spending our money locally
A key element of our procurement model is to maximise our impact on the local economy by spending our money with local businesses so they can create employment and training opportunities. This commitment will help to retain the Group’s cash within Knowsley, and will inject much needed improved prosperity into the borough by supporting individuals and small enterprises to thrive.
We have recently awarded a 5 year fleet management contract to a national fleet hire specialist, but as part of the contract negotiations we required them to partner with local organisations to deliver the service as much as possible. As a result, the vehicle maintenance, tyres and livery elements of the contract have all been awarded to organisations based in Knowsley. This is one example of where we have been able to retain many of the economic benefits of First Ark’s expenditure within Knowsley.
Another innovative way we are achieving our commitment is through a new social value delivery model within Vivark, the facilities management social enterprise part of our Group. The model achieves a balance between commercial and social activities, and has a clear focus towards local delivery through sole traders and the local supply chain.
Vivark recently held an exciting ‘meet the buyer' event, which enabled Knowsley-based businesses to find out about the model and the opportunities that are available to them. Up to 40 local traders; a mix of grounds maintenance workers, joiners, painters & decorators, plasterers and plumbers; had a great opportunity to talk directly to the contracts team at Vivark and find out more about working with us and how we can help and support them to become ‘tender ready’ and there was a real buzz and enthusiasm at the event.
The local traders who do go ahead and work with us will be supported to put in place any accreditations they need to work with us and meet our quality standards. For example we have put arrangements in place via Fusion21 that will enable them to obtain the necessary Health & Safety accreditations at affordable rates They can then use those accreditations to bid for work, making them more resilient, sustainable and successful in the local economy, generating additional social value from our spend.
Another great example of our social value procurement model in operation is leveraging additional value from our supply chain. The Group’s repairs sub-contractor framework requires that for every £100k of work they receive, the subcontractor must pay back 1% of their turnover, once it reaches an agreed level, as a social levy to the Group. Those levies are used to fund community projects to add even more social value in Knowsley. To date (November 2013) we have received £39,885 in social levies through this arrangement but forecasts show this will grow significantly as the Group grows.
There are other examples of leveraging additional social value too. On the Group’s Investment & Development Programme framework, for every £1million of work they receive, the contractors must provide 52 training weeks to local residents. To date we have received over 1,100 training weeks for local people through this arrangement.
Where we have been unable to find a supplier suited to our needs in the local area, we have worked with suppliers outside of the area to ask them what social value they can ‘bring to the table’ rather than specifying it in a contract. A great example of this is the Group’s staff agency framework, where the suppliers have committed to providing free interview skills and CV writing training for both staff and tenants.
Committing to a Living Wage
We’re really proud that First Ark recently achieved the Living Wage accreditation. This sets a pay floor we will not pay below and applies to all our employees (over 18 and excluding apprentices). The Living Wage is an hourly rate set independently and updated annually, based on the cost of living in the UK. Currently, 47% of First Ark staff actually live in Knowsley, so our commitment to paying the Living Wage directly increases the disposable income and spend in local economy.
First Ark is the first housing organisation within the Liverpool City Region to gain the Living Wage accreditation - showing how much we value our people who work across the Group. It also demonstrates our commitment to our corporate values – being pioneering, bold and fair.
But because we are so passionate about it, our Living Wage commitment goes beyond our own employees. We have also made the commitment to only working with suppliers and contractors in the future who meet our Living Wage requirement. We want our supply chain to buy into our ethos which means our social value objectives can have a much wider impact. To this end, we have written to all of our contractors and suppliers to tell them of our plans; we are delighted that some of our suppliers have written back already to tell us that they will be implementing the Living Wage immediately in their organisation as a result.
As part of the Group’s social value proposal, all on-going tender activity will incorporate the ‘Living Wage’ requirement, where appropriate, starting with the Group’s recent office cleaning tender and we are eagerly awaiting further impact of this commitment over the next 12 months.