Embedding Economic Social Value Through Local Spend in Adult Social Care

Economic social value has moved from a supporting narrative to a core consideration in adult social care commissioning. Local authorities, Integrated Care Boards and NHS commissioners increasingly expect providers to demonstrate how public funding contributes to resilient local economies, stable services and sustainable workforce models. Local spend is one of the most tangible ways providers can evidence this contribution because it connects procurement decisions directly to employment, business growth, supply-chain resilience and community wealth.

This article forms part of the Social Value Knowledge Hub and complements guidance on Economic Social Value, Local Spend & Supply Chains, Social Value in Social Care & Tenders, Local Employment, Skills & Workforce Development and Measuring, Evidencing & Reporting Social Value.

Commissioners increasingly favour providers that can show how local procurement strengthens service quality, workforce stability and community resilience rather than presenting local spend as a percentage commitment in isolation.

What economic social value means in adult social care

Economic social value describes the wider economic benefit created through the way a provider recruits, purchases, contracts and invests. In adult social care, this includes how public funding circulates through local labour markets, businesses and community organisations while supporting safe and sustainable care.

Economic social value may include:

• Recruiting and retaining local employees.
• Creating apprenticeships and career pathways.
• Buying from local SMEs and social enterprises.
• Using responsible local supply chains.
• Paying suppliers promptly.
• Supporting fair employment practices.
• Developing local skills and training capacity.
• Reducing avoidable expenditure caused by disruption.

The strongest approaches connect economic activity to outcomes for people using services rather than treating procurement and workforce investment as separate corporate functions.

What local spend means in practice

Local spend is the proportion of organisational expenditure directed towards suppliers, contractors and service partners operating within a defined geographical area. Depending on the tender, this may mean the local authority boundary, an Integrated Care System footprint, a wider region or a defined mileage radius.

Relevant expenditure categories may include:

• Property maintenance and repairs.
• Training and workforce development.
• Recruitment and employment support.
• Food, catering and household supplies.
• Transport and community access.
• Equipment and assistive technology.
• Printing and accessible communication.
• Professional and specialist services.

Providers should use a consistent definition of local and document how suppliers are classified. Changing definitions between reporting periods can undermine commissioner confidence.

Why commissioners care about local economic impact

Commissioners are accountable for demonstrating that public expenditure delivers value beyond the immediate contract. They increasingly assess whether services contribute to local prosperity, community resilience and sustainable employment.

Local economic impact matters because it can:

• Retain more public spending within the area.
• Support local employment.
• Strengthen small and medium-sized businesses.
• Develop responsive local supply capacity.
• Reduce supply-chain disruption.
• Improve service continuity.
• Build stronger relationships with communities.
• Support wider place-based priorities.

Commissioners therefore expect providers to show both economic benefit and practical relevance to care delivery.

Establishing a credible local spend baseline

Providers cannot demonstrate improvement without understanding their starting position. A baseline should be transparent, repeatable and proportionate to the size of the organisation and contract.

A practical baseline process includes:

• Defining the geographical boundary.
• Extracting supplier expenditure from finance systems.
• Grouping spend into meaningful categories.
• Recording supplier location and business type.
• Identifying SMEs, VCSEs and social enterprises.
• Documenting exclusions and assumptions.
• Calculating current local spend by category.
• Recording the reporting period used.

The aim is not to produce perfect data immediately. It is to create a defensible methodology that can be applied consistently over time.

Operational example 1: identifying local procurement opportunities

A homecare provider reviews six months of expenditure before submitting a local authority tender. The analysis shows that maintenance, printing and staff training are largely purchased through national suppliers despite suitable local alternatives.

The provider:

• Defines local as the council boundary.
• Maps existing expenditure by category.
• Identifies suitable local suppliers.
• Assesses quality and capacity.
• Sets category-specific targets.
• Builds reporting into contract governance.

This creates a realistic improvement plan based on evidence rather than an arbitrary overall percentage.

Connecting local spend to workforce stability

Economic social value is not limited to supplier expenditure. Workforce decisions are often the largest area of local economic contribution within social care.

Providers can strengthen local workforce impact by:

• Recruiting within the service area.
• Working with local colleges and employment services.
• Creating apprenticeships and placements.
• Supporting career progression.
• Investing in local training provision.
• Reducing dependence on distant agency labour.
• Supporting people returning to employment.
• Monitoring local workforce retention.

These actions support economic development while improving continuity and reducing vacancy-related service risks.

Local supply chains and service resilience

Local suppliers can offer operational advantages where they are selected and governed appropriately. Shorter supply chains may enable faster responses, more flexible delivery and stronger accountability.

Examples include:

• Local contractors responding quickly to urgent repairs.
• Training providers adapting courses to emerging needs.
• Equipment suppliers offering rapid replacement or adjustment.
• Transport partners understanding local routes and access barriers.
• Community organisations providing culturally relevant support.
• Local recruiters understanding the regional labour market.

Commissioners value these benefits because they link economic social value directly to quality and continuity.

Operational example 2: local maintenance supporting safer services

A supported living provider experiences repeated delays from a national maintenance contractor. The provider establishes an approved network of local SMEs for routine and emergency repairs.

The new arrangements include:

• Primary and contingency contractors.
• Agreed emergency response times.
• Safeguarding and confidentiality expectations.
• Named escalation contacts.
• Monthly performance review.
• Quarterly spend and outcome reporting.

Repair times improve, disruption is reduced and local businesses gain reliable work. The provider can evidence both stronger continuity and measurable economic benefit.

Balancing locality, value for money and quality

Local spend should never mean choosing a supplier solely because it is nearby. Commissioners expect providers to balance social value with quality, capacity, safeguarding, resilience and price.

Supplier decisions should consider:

• Ability to meet service requirements.
• Quality and compliance standards.
• Safeguarding implications.
• Financial stability.
• Business continuity capability.
• Response times.
• Overall value for money.
• Wider community contribution.

Where a local supplier is not suitable, the provider should be able to explain the decision and continue reviewing the market for future opportunities.

Governance and oversight of procurement decisions

Economic social value must be embedded within governance rather than delegated entirely to operational teams. Boards and senior leaders should receive regular information on procurement risks, supplier performance and local spend trends.

Effective oversight includes:

• Approved supplier frameworks with quality thresholds.
• Named accountability for local spend.
• Regular supplier performance reviews.
• Risk assessments for critical dependencies.
• Clear escalation routes where supplier failure could affect care.
• Prompt payment monitoring.
• Quarterly social value reporting.
• Annual review of targets and market capacity.

This ensures that local spend decisions support, rather than compromise, safety and compliance.

Operational example 3: recovering underperformance transparently

Six months into a contract, a provider falls below its local spend target because several urgent purchases were made through national frameworks during a period of supply disruption.

The provider:

• Validates the expenditure data.
• Explains the reasons to commissioners.
• Identifies suitable local alternatives.
• Updates procurement guidance.
• Sets revised quarterly milestones.
• Monitors improvement monthly.

This transparent approach maintains commissioner confidence because underperformance is acknowledged, governed and addressed rather than hidden.

Measuring economic social value through local spend

Commissioners increasingly expect providers to demonstrate outcomes rather than intentions. Reporting should therefore combine expenditure data with evidence of operational and community impact.

Useful measures include:

• Percentage and value of spend with local suppliers.
• Spend with SMEs, VCSEs and social enterprises.
• Number of local suppliers onboarded.
• Prompt payment performance.
• Local jobs and apprenticeships supported.
• Supplier response times.
• Service disruption avoided.
• Year-on-year performance trends.

Providers should explain significant changes in performance and show how the information has influenced procurement decisions.

Building a tender-ready evidence pack

Strong providers collect evidence continuously rather than recreating it before every tender.

A practical evidence pack may include:

• Local spend methodology.
• Supplier classification rules.
• Approved supplier registers.
• Quarterly dashboards.
• Prompt payment data.
• Supplier performance reviews.
• Corrective action plans.
• Case studies demonstrating service benefit.

This provides credible assurance that commitments are based on established practice rather than tender-stage aspiration.

Common pitfalls to avoid

• Failing to define what local means.
• Making commitments without a baseline.
• Using unrealistic percentage targets.
• Choosing locality over quality or safeguarding.
• Failing to assign ownership.
• Reviewing performance only annually.
• Reporting spend without explaining outcomes.
• Treating local procurement as a tender-only activity.

What commissioners expect

Commissioners increasingly expect providers to demonstrate:

• A transparent local spend baseline.
• Realistic and proportionate targets.
• Accessible opportunities for SMEs and VCSEs.
• Appropriate supplier assurance.
• Prompt and fair payment practices.
• Integration with workforce and continuity planning.
• Routine governance and reporting.
• Evidence of measurable improvement.

How to evidence this in tenders and commissioner reviews

Strong tender responses should explain how local spend is defined, measured, governed and improved. Providers should identify priority purchasing categories, describe supplier onboarding and assurance, set realistic milestones and explain how commissioners will receive regular evidence.

The strongest submissions also link local expenditure to practical outcomes such as faster repairs, stronger workforce pipelines, improved continuity and more responsive services. This demonstrates that economic social value is part of the delivery model rather than a separate corporate commitment.

Conclusion

Economic social value through local spend is about far more than redirecting expenditure. It requires providers to understand local markets, balance community benefit with quality and value, and govern procurement decisions throughout the contract lifecycle.

Providers that establish clear baselines, build responsible local supply chains, support workforce development and report outcomes transparently are better placed to strengthen local economies while delivering resilient, high-quality adult social care. This creates stronger tender evidence, better commissioner assurance and more sustainable services over time.

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