Social value reporting: An integrated approach John Maddocks – CIPFA

cipfa.org.uk Why Social Value?  Public Services (Social Value) Act 2012 Pre-procurement - Consider how what is being procured might improve the economic, social and environmental wellbeing of an area  Improved effectiveness and efficiency through a more rounded understanding of an organisation’s (or programme’s) activities and their impact on people and communities.  Improved decision making?

cipfa.org.uk A working definition for reporting social value … Performance in terms of contribution to economic, social and environmental wellbeing

cipfa.org.uk Range of value creation … User/ customer Service/ programme Organisation Policy Community Value for a population Value for individual, programme, service or organisation

cipfa.org.uk Measuring social value … many models and methodologies  New Economy Cost Benefit Analysis model  HACT Social Value Bank and Value Calculator  Adult Social Care Outcomes Toolkit (ASCOT)  Big Society Capital Outcomes Matrix  Value added statement  Sustainability reporting (eg GRI G4)  Social accounting  Social return on investment  Integrated reporting  GECES approaches to social impact measurement

cipfa.org.uk Challenges of measuring and reporting  Variations in quality of measurement & reporting  Differing definitions  Variations in content and format  Assessing the contribution of a service to particular outcomes  Achieving balance (positives & negatives)  Deciding on what is and isn’t relevant  Comparability  Cost  Providing concise, clear, decision useful information

cipfa.org.uk GECES – impact & outcome reporting characteristics …  Explanation of the process applied  Clear account of the effects of the intervention  Explanation as to how that happened  Identification of any third parties having a role in the effective delivery of those outcomes and impacts  Appropriate and proportionate evidential underpinning  Identification of stakeholders whose interests are measured  Well-explained, proportionate, indicators  Explanation of social and financial risk (where helpful)

cipfa.org.uk Integrated Reporting - The goal  The goal is a more coherent and integrated explanation of an organisation’s ability to create and sustain value  Potential benefits include improved effectiveness and efficiency through a more rounded understanding of an organisation’s activities and its impact

cipfa.org.uk Draws on developments in …  Global convergence of accounting standards  Sustainability reporting guidance including sector specific guidance  Non-financial reporting including social accounting  Discourse on the evolving nature of financial reporting  Existing work done on integrated reporting eg South Africa  Work on governance eg King III

cipfa.org.uk Sustainability reporting Influences on reporting approach? GRI A4S Payment by results Outcomes Impact reporting IIRC Governance Narrative reporting Financial reporting

cipfa.org.uk ‘Capitals’  Creation of ‘value’ through the use of ‘capitals’:  financial  manufactured  intellectual  human  social and relationship  natural  Relationships between capitals, business model, external factors and strategic thinking  How these capitals, the business and society are impacted through the process of value creation.

cipfa.org.uk Integrated reporting

cipfa.org.uk Challenging current practice  Integrated thinking - thinking outside of silos and recognising the complexity of value creation process  Stewardship - accountability for financial capital, but also of the other ‘capitals’  Focus - connects past performance with strategic objectives and ability to create and sustain value  Timeframe - short, medium and long term, avoiding excessively short term perspective.  Trust - emphasises transparency  Adaptive - identifying what is material  Concise – only the most material information  Technology enabled – use new technologies to link information in the report to further detail elsewhere

cipfa.org.uk IR guiding principles … A.Strategic focus and future orientation B.Connectivity of information C.Stakeholder relationships D.Materiality E.Conciseness F.Reliability and completeness G.Consistency and comparability

cipfa.org.uk Relevance to current landscape  Can enhance strategic planning and consideration of the long term fiscal, social and environmental performance and sustainability of an organisation  Opportunity to study and take account of the ‘connections’ in complex service delivery  Can assist in clarifying goals and identifying preferred outcomes  Can support a service user/’customer’ focus  A broader way to look at social value  Compatible with outcomes/impact reporting

cipfa.org.uk Some questions …  Is the IR language right for your sector?  How do you understand ‘value’ and ‘social value’?  Can IR provide a single place for stakeholders to can gain a more complete picture of your organisation and its performance?  Can IR help deliver a more concise/focused approach to reporting?  Can integrated thinking be applied internally and if so how?

cipfa.org.uk Consider what types of social, economic and environmental value are relevant to your organisation …

cipfa.org.uk What to report on …  Agree definition of social value  Clarify the purpose of reporting  Identify the intended readership  Decide on scope of qualitative & quantitative content; and what is and isn’t relevant  Decide how to capture value including relevant measurement where applicable  Decide if useful to monetise value  Seek a balance (positives/negatives; benefits/costs)  Ensure transparency  Does it provide decision useful information?  Review, learn and improve

cipfa.org.uk Information on IR and GECES … IR Framework nal-ir-framework/ GECES – impact measurement =en&pubId=7735

cipfa.org.uk Further info from CIPFA …  CIPFA publication on social value  CIPFA discussion paper on measuring and reporting on social value  Ongoing work on measuring and reporting on social value 