To envisage the future of social value, we must first understand how it has developed. There is no doubt that it has come a long way in the UK since the introduction of the Public Services (Social Value) Act 2012, with the construction industry taking it much more seriously today than ever before.
In the past couple of years, it has gone from being a tick-box exercise to something that many see as crucial to a project. In the early days, a simple monetary figure for a project’s social value would be given, without any more detailed impact metrics and without taking into consideration other factors such as job creation or environmental measures. Today, more and more contractors are requiring reports from their supply chain on social value activities so they can report the impact of a project from end to end.
The practice is hugely important in framework tenders, with demonstrating actual and detailed social value being a deal-breaker when it comes to being appointed to many frameworks. In addition, local authorities and other public-sector organisations need to justify every penny spent on developments, so measuring social value can help quantify return on investment for the community – something that will be even more important as we seek to mitigate the economic impact of COVID-19.
Before the 2012 Act, the industry would traditionally have spoken about corporate social responsibility (CSR), the familiar term for a wide range of activities that are somewhat difficult to measure. Some people still see social value as a PR exercise, but the reality is it’s now quantifiable and embedded in every project in the built environment. Software such as our own Social Profit Calculator is able to tell you the impact of a project; but the challenge of identifying what good social value looks like still remains.
The answer is that good social value looks different from place to place. What will greatly benefit one community may not be the biggest priority for another. We need to consider these geographical and community-based differences when looking at social impact.
This is where SMEs can really come into their own in the construction supply chain. These organisations will be key to social value provision at a local level because they better understand the specific areas in which they work. Such smaller businesses in the supply chain will therefore be well placed to help larger organisations understand the true impact of their projects on the ground.
The new measures for social value calculation recently announced by the government are also fostering a better understanding of true social value, and providing it in a way that makes sense to the local community. Central government is now required to go further than the bare minimum in social value demonstration, with each iteration of procurement policy notes requiring more metric reporting than the last, ensuring that all its major procurements explicitly evaluate social impact, where appropriate, rather than just considering it.
As Westminster is behind this piece of legislation, we can in the not so distant future expect local authorities and other public-sector organisations to have the same requirements. As an industry construction must respond, by beginning to consider how to demonstrate positive social impact without overclaiming its successes.
Social Profit Calculator is striving to ensure that it is improved in line with this legislation so that we can provide an accurate measurement of social value. We’re also developing a Smart Construction Calculator, which sees us working with companies from throughout the supply chain to collect historical data on the social impact of modern methods of construction and create a benchmark for new and upcoming projects.
The key is collaboration: if businesses are more forthcoming with information and work together to develop these benchmarks, we can get a true picture of what good social value means in every area of the country.
“Good social value looks different from place to place; what will greatly benefit one community may not be the biggest priority for another”
Measuring social value is also at the heart of a comprehensive new Value Toolkit that RICS is currently developing for the UK government in collaboration with bodies including RIBA, CIOB, Social Value UK and led by the Construction Innovation Hub. This toolkit builds on the work done by the Construction Leadership Council Procuring for Value Working Group, and seeks to ensure that clients of the government and other organisations consider the environmental, human and financial impacts of projects alongside social value, as part of balanced, informed decision-making.
Prof. Sara Wilkinson FRICS, Dr Gill Armstrong, Dr Kusal Nanayakkara, Mark Willers FRICS, Prof. Jua Cilliers and Dr Robert Fleck 08 December 2023