Key Performance Indicators - options for social value
In addition to outlining specific measures, contract managers may choose to include a KPI in their contracts as a means of managing progress on social value delivery overall. Listed below are two options that can be used as social value KPIs, the choice of which would be determined by contract managers to best suit their contract.
Option 1: Target-Based Performance Measurement
This method measures social value delivery against a pre-defined set of targets within an agreed timeline. It requires contract managers to agree social value commitments before the contract is awarded.
Example: If a supplier sets targets for 10 Social Value measures and is on track with all of them, they receive a ‘Good’ rating. If they meet only 7 out of the 10 targets, that’s 70% delivery, which results in a ‘Requires improvement’ rating.
| Contract objective | KPI | Good | Approaching target | Requires Improvement | Inadequate |
|---|---|---|---|---|---|
| Overall delivery of social value commitments | % of social value commitments on target or delivered (YTD) | 95% | 91 - 93% | 86% - 90% | 85% or below |
Benefits
The benefit of this approach is that buyers and bidders agree on clear targets before the contract is finalised. After the contract is awarded, it’s easy to check whether the supplier has met the social value commitments they promised.
Disadvantages
Lower impact measures are weighted the same as those that provide the most value, which could allow suppliers to distort their published scores. A possible fix is to use a weighted scoring system, but this could introduce extra complexity and potential disagreements.
Option 2: Value-Based Performance Management
This solution uses a value based method to manage performance, where financial values are assigned to a set of measures (as listed in the Council's social value measures) as agreed during the tender. This allows performance to be tracked based on the total proxy value the contractor committed to in their submission.
Example: If a supplier commits to a £300,000 social value target for the year, the KPI is £300,000 and is used to check whether the target has been met. For example, if the supplier delivers £290,000 (97%), they will receive a ‘Good’ rating. If they only deliver £75,000 (25%), they will receive an ‘Inadequate’ rating.
| Rating | Rating Description | Suggested Range |
|---|---|---|
| Good | Performance is meeting or exceeding the KPI | Over 90% |
| Approaching target | Performance is close to meeting the KPI | 70% - 90% |
| Requires Improvement | Performance is below the KPI | 30% - 70% |
| Inadequate | Performance is significantly below the KPI | 0% - 30% |
| other | Performance cannot be described as good, approaching target, requires improvement or inadequate |
Benefits
This methodology is easy to calculate and encourages the delivery of the ‘big ticket’ social value measures that are important to Bradford Council and our communities.
Disadvantages
This method relies on all social value measures having a financial proxy attached to them, which is the case for Bradford Council. However, an alternative option is to give different weightings to each social value target based on how important it is.
