January 31st marks three years since the Social Value Act came into force, obliging all public sector organisations in England and Wales to incorporate considerations of social value in procurement decisions for public service contracts. While the law does not include a mandate to consider social value for construction schemes, it’s an area that has become an increasingly important focus for many local authorities as they look to maximise the positive outcomes of publically-funded schemes.
It’s a positive approach for both communities and the construction sector. For local authorities it means that publically-funded improvements to the built environment can also help to raise job prospects and training aspirations. For contractors, it aids skill development and stakeholder engagement.
The challenge of defining social value, delivering it and measuring is a potential stumbling block for both the public sector and the construction industry, making it difficult to gauge success on a project by project basis.
Measuring success is key to gaining traction for the importance of social value, and what’s great is that this is embedded in the culture of the construction sector. It requires goal setting for social value as an integral part of construction project procurement and delivery, with clear reporting processes and multi-partner collaboration to achieve KPIs and communicate milestones.
Like any value indicator, social value must be measured against consistent criteria adopted by both the public sector organisation and their private sector delivery partners, with metrics that can be transferred and benchmarked over multiple projects. The criteria must also take into account any project-specific objectives that relate to the location, local demographic or nature of the project.
Social value is about legacy and long-term outcomes, such as training, employment and work experience, all of which can be measured as KPIs. Less tangible goals, such as stakeholder engagement and raised aspirations can also be measured with initiatives such as educational visits and site open days.
For main contractors, however, it’s not possible to deliver these goals in isolation. Success involves working with the local authority client to identify what social value means in the context of the individual scheme. It also requires a working partnership with local training and employment/employability organisations and a trusted local supply chain that will provide genuine work experience, apprenticeships and training to candidates that may have found it difficult to access work and training opportunities in the past.
What this means in practical terms is a commitment to a long-term working relationship between the local authority customer, other local agencies, the main contractor and the subcontracted teams that can gather pace over the course of multiple projects.
Beyond the work and training outcomes, social value must also be used as a catalyst for economic benefits. Main contractors must be accountable for local supply chain best practice, sustainability and delivery of built environment improvements, providing lasting benefits to local businesses and local people.
Employment, skills and living environment make up three of the seven indices of multiple deprivation as defined by the UK Government. The construction industry has the partnerships and the skillset to make a distinct difference in these key areas and with a coordinated, consistent and ambitious approach to social value within public sector procurement, we can really take the lead in improving outcomes for many in our society.
Dr Vicky Hutchinson is national frameworks social responsibility manager at ISG and was shortlisted in the prestigious Building magazine awards Woman of the Year category in 2016.
This article first appeared in Construction News, 01 February 2016