Manchester city council’s new leader, Bev Craig, announced her ambition for Manchester to become a “Real Living Wage city”, as part of her vision that “social value” be “an approach that we all take” to spending.
The Burnage ward councillor, who became head of Manchester city council last December, was speaking at a conference co-organised by the city council and the Centre for Local Economic Strategies (CLES) on how the city council had worked with the Manchester-based think and do tank to promote social value through its procurement practises. The conference was held on Friday at The Yard in Cheetham Hill, and also livestreamed on YouTube.
“We’ve been working with CLES for 14 years around social value very much as a procurement-driven exercise,” Craig explained. “For those of you who do business with us, you know that as part of our procurement commissioning process we ask for nearly a third of the contract to be contributing to social value.”
“Simply by doing that, we’ve been able to contribute an extra 2,300 jobs for Manchester people, we’ve created almost 630 apprenticeships and we’ve seen over 140,000 volunteering hours, in one year.”
Procurement is one of the five pillars of community wealth building, the signature approach to local economic development promoted by CLES, and described by them as a critical lever for shaping and developing markets in the interests of local people.
CLES analysis, published at the conference, and based on responses to a survey sent to the council’s top 300 suppliers, shows that of the £416m Manchester City Council spent on procurement goods and services with its top 300 suppliers in 2020/21, £247m or 60% was being spent with Manchester-based suppliers, an increase of 51.5% compared to 2008/09. Of that £247m, small and medium enterprises (SMEs) received 50.9%. In 2021 SME’s received 46.6% more in procurements spending from the council than they did in 2014/15.
Community wealth building – find out more
The most well-known Community wealth building approach was adopted in Preston and is often referred to as the Preston model. This utilised a range of large influential anchor institutions in Preston which included Preston City Council, University of Central Lancashire, Community Gateway Housing Association and Lancashire Constabulary. Using the principles of progressive procurement, which were pioneered in Manchester, the Preston Model increased the amount of spending with companies which were based in Preston, or had branches in the city, allowing more money to circulate within the local economy rather than being extracted out of it. Manchester also saw efficiency savings of £65 million through following progressive procurement policies.
Progressive procurement is just one of the five pillars of CWB. The other four are:
- Democratic ownership of the economy
- Making financial power work for local places
- Fair employment and just labour markets
- Socially productive use of land and property
To find out more about CWB, check out the Community Wealth Building Centre of Excellence.
Craig used the conference to lay out her vision of the city, where social value would be embedded in everything the council and large local anchor institutions did when it came to spending money.
“We want to talk about social value … not just as a tool of procurement, but as an approach — an approach that defines what it is that we’re about here in Manchester … It has to be about the approach that we all take. It has to be about what we ask of each other in the city, in terms of the contribution that we want to see.”
One way of achieving this would be for Manchester to pay a Living Wage, Craig continued. “We want to be a Real Living Wage city … A Real Living Wage for homecare workers, and we’ve made the decision to bring forward the rest of that for the care sector.”
Craig illustrated the need for social value by looking back at the history of the city over the last 25 years. In a nod to Sir Richard Leese, her predecessor, Craig praised the “vibrancy” which had characterised the development of the city, saying: “When I walk around Manchester – I came here in 2003 for university and like many stayed around, made it my home, I loved this city so much that I wanted to help make it even better — I see the vibrancy of what we’ve done in the city over the last 20 to 25 years. A big post-industrial city, and taking it into a city that really thrives”
Craig also raised big issues still faced in Manchester. “When I also think about some of the challenges that still remain, when I look at some of our communities where we have in some areas half of our children living in poverty, where we saw at the beginning of the pandemic the number of people claiming Universal Credit jump by 90% in those first two months, where we see more than 23% of residents in the city earning less than the Real Living Wage, and thinking about those UC claimants actually, almost 40% of those claiming credit in the city are in work.”
Against this backdrop of growing inequality it was crucial to promote social value, Craig argued.“I think it’s the context of all of these factors, alongside the disparities within our communities, that really does make the importance of social value something we really want to shout about going forward.”
It was critical to promote social value through all areas of the council’s work, and to encourage organisations in other sectors to do the same. “It has to be about the approach that we all take. It has to be about what we ask of each other in the city, in terms of the contribution that we want to see … it’s an approach, an ethos, a principle that we must demand of all of ourselves.”
What is social value?
Sarah Longlands, chief executive of CLES explained to the conference attendees that social value was about delivering real benefits to people’s lives. “It’s about how the economy can deliver for and work in the interests of people in a city like Manchester,” Longlands told The Meteor. “That can include having a decent job, having enough money coming in to heat your home, having a home in the first place, and also about having opportunities to live a life that you’ve got a reason to value.
Social value should be something that runs through the work of both the public and private sector, Longlands argued. “From procurement’s point of view, one of the things that’s happened over the last ten years, as austerity has hit, is that we’ve become more appreciative of the fact that what we do have in the public sector must work harder. We’ve got an obligation to ensure we’re not just evaluating what we have in terms of the bottom line, but looking at the triple bottom line if you like — the wider social, economic and environmental outcomes.”
Reflecting on the analysis of council spending produced by CLES, Longlands added: “The story of today, of this analysis, is that 14 years ago CLES and MCC sat down together to try and think about how they could look at the future of the city differently.
“That was about thinking about how you could use the public spend, the money that was already going into the city in all sorts of different ways, how could you use that money even more deliberately, to make it work harder, to see it as a lever to really unlock opportunities in terms tackling things like long term unemployment and climate change?
Will social value really help?
Despite experiencing twelve years of cuts (Manchester council has lost £419m of annual funding over the last decade) England local authorities’ core spending power will be £53.9bn in 2022-23, according to the government’s provisional local government finance settlement in December 2021.
“It’s not just about what happens in councils,” Longlands also pointed out to The Meteor. “It’s also about what happens in local hospitals for example, organisations which build roads and which run railway stations. When you start to think of it that way, the potential is massive. With everyone thinking with this social value hat on it could be really transformative.”
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