Insight

NHS suppliers:

Improve sustainability performance or risk being left out

By Katie Smart,

Associate Director

Earlier this year the NHS raised the bar on sustainability procurement asking its 80,000 suppliers to step up performance and measurement of social value and carbon emissions.

From 1st April 2022, all NHS suppliers are required to adopt the Government's Social Value Model and include a minimum of 10% weighting on net zero and social value into tenders. Furthermore, to support the delivery of net zero carbon across the NHS, the Social Value Model theme of ‘Fighting Climate Change’ will be included in all NHS procurement tenders.

And it didn’t stop there, through its net zero carbon roadmap, the NHS has clearly indicated which suppliers it is willing to work with going forward. According to the roadmap, by 2027 the NHS will no longer purchase from suppliers that have not aligned with their trajectory towards net zero carbon and requires all suppliers to publicly report emissions and publish a carbon reduction plan aligned to the net zero NHS target, for both their direct and indirect emissions.

So, the message is clear: improve sustainability performance or risk being discounted in the future.

Some NHS suppliers will be ahead of this game, but for many the next 5 years will be a time for setting new carbon goals and devising social value strategies to remain in the running.

Why now?

The NHS is responsible for 5% of the UK’s total CO2 emissions. 60% of those emissions are embedded in the NHS supply chain. Climate change and health inequalities are inextricably linked. This approach to procurement signals to all stakeholders that delivering net zero carbon and social value is urgent and important to the NHS.

Social Value in public procurement isn’t new and it should be taken seriously by suppliers. To put it bluntly, it could be the differentiator that wins the contract. Throughout the NHS, employees are being trained on social value and how it can support the overall corporate strategy. It’s now up to suppliers to deliver the goods.

Submitting a winning bid

With the NHS spending around £130 billion each year, the commercial gain for suppliers is significant, but only available to suppliers who submit bids demonstrating how they will deliver social value and net zero pathways.

There’s detailed guides available from the NHS including the road map for net zero carbon and the Government’s Social Value Model to help suppliers understand the exam question. However, the business of social value can be complex and not as straight forward as it might seem. With a minimum of 10% weighting on each contract, it’s a section suppliers can’t afford to get wrong.

Embedding social value in procurement strategies is only the first step for suppliers. More restrictions and tougher supplier requirements will come into force as the NHS moves through its net zero pathway. For example, by 2030 suppliers will only be able to qualify for NHS contracts if they can demonstrate their progress through published progress reports and continued carbon emissions reporting.

At Lexington, we can provide a full service on social value and net zero strategies. No matter where you are on the journey, we can apply our deep expertise and critical thinking to help you write winning bids. Our extensive knowledge of the health sector and expertise in responsible business give us the unique ability to provide integrated consultancy to NHS suppliers of all sizes.

At Lexington, we can provide a full service on social value and net zero strategies. No matter where you are on the journey, we can apply our deep expertise and critical thinking to help you write winning bids.

Here’s our top tips to get you started:

Get to know the Social Value Model and supporting guidance. Lexington can help you understand the full requirements and five themes of social value and what it means for your business.

Understand the key local social and environmental issues impacting the local and regional community. Every locality and NHS department will have different sets of priorities and goals. It’s worth finding out what areas of social value are important to the tender and where the opportunity lies for the supplier to deliver meaningful solutions.

Thoroughly review the requirement. Not all NHS tenders are created equal, but each will have an indication of what the tendering party wants to achieve through social value. The answers are usually in the tender.

Read the evaluation criteria to understand how you will be measured. Measuring social value can be complex so get to know what the measurement criteria is and make sure your plan meets this requirement.

Ask questions. This is new to everyone so there will be questions, your questions might help you understand the requirement better and help the NHS to deliver better tenders in the future.

Be authentic and stick to what’s important and meaningful to your business, while being realistic about what you can deliver. You are probably already doing a lot in the carbon reduction and social value space without even realising it!