Social Value No Longer ‘Nice to Have’ for Construction

Social value has long been considered a ‘nice to have’ when it comes to construction projects, but thanks to the introduction of the government’s Construction Playbook in December 2020, that is starting to change according to an industry expert. Chief operating officer at Social Profit Calculator, Sarah Coughlan, says that the playbook has given public organisations across the board confidence to demand social value is embedded into their schemes – and that the private sector is also starting to take note.

There is no doubt that the construction industry has slowly been embracing social value and working hard to include it within the scope of a project, but it hasn’t necessarily been put at the heart of delivery. Instead, it was seen as something that ‘should’ be included but wasn’t essential – unless delivery was taking place via a framework where social value forms a key part of reporting.

Embracing a change in ethos

Since the introduction of the playbook, however, this is starting to change. The difference when it comes to publicly procured works really is like night and day. Social value is already of huge importance when it comes to framework appointments with providers such as Pagabo requiring it, but this approach hasn’t necessarily been replicated elsewhere.

However, we are now very much starting to see that shift from social value being something that must be ‘considered’ to that which must be ‘explicitly evaluated’ and built into a project from the outset – across the whole of the public sector, not just those schemes being procured by central government.

We are starting to see that the playbook has had a really positive impact on local authorities too. While it relates specifically to centrally procured public works, it has given many local authorities added confidence to demand that their suppliers deliver against the policies outlined by central government and put social value at the heart of delivery. This isn’t something we have seen before and it is an important shift.

It isn’t just the public sector that is making change either. The private sector is also becoming increasingly keen to ‘do good’ through development – there is a recognition that social value isn’t just something that those working in the public sector do, but also something the wider industry must take responsibility for, and provides an opportunity for the private sector too.

Understanding social value

In the past, social value has been somewhat of a mystery that often wasn’t fully understood, but again this is really starting to change now. Previously, a monetary figure would have been put against it for a project, but that simply didn’t cover the full breadth of what social value means and the impact it has on local communities in terms of things like job creation, environmental issues and the long-lasting legacy left behind. This is probably the biggest change that is taking place at the moment; there is a real move away from the need to monetise everything as we look towards a much more holistic view of what social value entails.

Annex A of the playbook outlines five key themes for considering social value: COVID-19 recovery, tackling economic inequality, fighting climate change, equal opportunity and wellbeing, and make it very clear what ‘good’ looks like within those different areas which is a much-needed change that will undoubtedly help shape what social value looks like for a particular scheme.

In giving structure to social value calculation, much of the mystery that has previously enshrouded it has been removed. Organisations procuring works can now much more easily consider what it is that is important to them and the communities in which they are active and consider their priorities more effectively within the matrix outlined by the playbook – something which aligns well with the early engagement of local supply chain and its knowledge of local priorities.

We know that social value looks different to everyone and what benefits one community wouldn’t suit another, but there is now clarity that was lacking previously and that has already started to have a positive impact. In legislating at central government level, we are seeing a ‘trickle down’ effect to local authorities and into the private sector as the discussion about social value has been brought to the fore.

Legislation to require ‘doing good’

This drive towards really understanding what social value means for our communities and the requirement for ‘explicit evaluation’ of social value is a hugely important one – and it is very encouraging that we are seeing local authorities and other organisations taking on board the new guidance.

However, if this progress is something we want to see continued and replicated across the industry, it is vital that the legislation extends to cover all public sector procurement. While we have certainly seen many local authorities embracing it, only by legislating will we see changes adopted wholesale.

Measuring social impact

The progress that has been made since the release of the playbook has been significant and is paving the way towards a more responsible built environment sector which puts social value at the heart of delivery, but it is important that we continue to move forwards and see the industry embrace real social value and demonstrating its real impact.

This is what we’re always striving to do with our software, ensuring that we work to make improvements in line with the latest updates and trends so that we can provide the true measurement on social value. We’re also looking at this more closely with a future-forward vision through the development of our ‘Smart Construction Calculator’. This sees us working with companies from throughout the supply chain to gain historical data on Modern Methods of Construction (MMC) projects in order to create a benchmark moving forwards for new and upcoming projects.

The key is collaboration. If businesses are more forthcoming with existing information, and work as a collaborative collective to develop these benchmarks, we can get a true picture of what good and true social value means to every area of the country.

For more information about Social Profit Calculator, please visit https://www.socialprofitcalculator.co.uk/

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