Measuring Social Value
The Public Services Act 2012 (more commonly referred to as the Social Value Act) requires "public authorities to have regard to economic, social and environmental well-being in connection with public services contracts". In Wales, the Well-being of Future Generations Act 2015 calls on those responsible for public decision-making to place people and their wellbeing at the centre of what they do.
Our social value approach involves working with you and your stakeholders to understand what has changed and to value those changes. We follow a six-stage process of social return on investment (SROI) analysis which enables us to compare the benefits produced with the relative costs of creating them.
- Identifying key stakeholders: Stakeholders are those who experience change as a result of your activity or programme. Once identified, we consult stakeholders throughout the social value process to ensure that the social value ratio is based on information from those who experience your activity or programme.
- Creating a theory of change: The theory of change identifies the expected changes experienced by participants and illustrates the links between the inputs, outputs, outcomes, and impact.
- Quantifying outcomes: Changes are the outcomes of your activity or programme. We measure these changes using appropriate qualitative and quantitative methods to provide evidence that significant change has taken place. Changes may be positive and negative, intended and unintended.
- Valuing outcomes: We then place a value on your main outcomes by applying wellbeing valuation using the HACT Social Value Insight tool, which monetises outcomes such as high confidence or mental wellbeing, which are often excluded from markets.
- Determining costs: We also measure the costs of running your activity or programme. Categories often include staff costs, equipment costs, administration costs and overhead costs.
- Calculating the SROI ratio: By comparing the average social value per participant with average cost per participant, we can calculate an SROI ratio.