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Risk that social value is spread too thin in construction, finds report

Words: The Planner
Community engagement / Shutterstock: 144653342

The lack of a common definition of what constitutes social value means there is a high risk of it ‘becoming too diffuse and lacking focus’, according to a report published by the Institute of Economic Development (IED).

From the Ground Up – Improving the Delivery of Social Value in Construction says this lack of a definition to frame understanding, benchmarking or reporting, aid comparison of tenders and to determine best practice “has given rise to significant disparities in what counts as social value activities, and no requirement to focus on improving the wellbeing of those who are most disadvantaged”.

It states that: “There is a high risk of social value becoming too diffuse and lacking focus.”

As part of the work on the report, construction firms – multinational, SMEs, local authorities, public sector and specialist third sector – reported that projects that are undertaken across several areas have multiple stakeholders competing for social value outputs and have different frameworks with differing social value requirements.

They are also not aligned to the desired benefits or outcomes.

The firms agreed that one of the biggest barriers to the successful delivery of social value is  “the lack of understanding of what social value is”. This is why a definition, at least for the construction sector, the report explains, “is so vital: it is the starting point for everything that follows”. 

The UK Green Building Council is currently working on a definition.

From the Ground Up, which considered all aspects of social value in the construction sector, including procurement, definitions, activities, monitoring and evaluation, was put together by the IED and co-authors Arup and Atkins, alongside partners Commonplace and the Joseph Rowntree Foundation. The research sought to support the understanding of what good practice in delivering social value looks like. 

Speaking at a webinar to launch the report, IED chair Bev Hurley said the “historic focus on trickle-down benefits” had not worked, with a third of the population living in 10 per cent of the country’s most deprived areas, where one in four people are suffering long-term illnesses. The annual cost of poverty to the economy is £76 billion.

“The level of inequalities are high, more and more entrenched and steadily increasing, whether that’s children’s poverty, education, mobility, health, wealth, productivity and now Covid-19.

“We have one of the most unequal economics in the developed world and it’s getting worse. This inequality is at an individual level a massive waste of potential and at a macro-economic level a significant break to the economy.”

Following surveys, interviews and round tables with more than 80 contributors, as well as case studies, the report authors put together five main recommendations:

  1. Establish a ‘Construction Social Value Centre of Excellence’, which should be funded by the government. It would work collaboratively with industry and public sector bodies to help to define social value and provide thought leadership, support and guidance, including delivering a repository of good practice and performance benchmarking.
  2. Agree a definition of social value, and what activities are within scope, for the construction sector – to allow robust comparisons of value, and help to ensure that social value requirements are proportionate and appropriate, and provide measurable additionality.
  3. Update the Treasury Green Book, the Social Value Act 2012 and initiate mandatory reporting in order to improve Treasury guidance on the monetisation of social value metrics and enable the assignment of different financial values to social value activities according to different areas.
  4. Upskill the public and private sector. The centre for excellence should work collaboratively to offer continuing professional development on all aspects of social value. A greater understanding of what social value is, how to procure it more effectively, and how to achieve better outcomes, will improve capacity, capability and impact.
  5. Upskill those not in the supply chain – SMEs and voluntary and community sector (VCS) organisations – to improve their ability to compete, to deliver and to grow, and by doing so, leaving a more enduring local legacy.

“We are a long way from a social nirvana despite increased awareness of it,” Hurley added. “The challenges and barriers are significant while the economic and social imperatives for change are compelling.”

Alison Ball, associate director of sustainability at Arup, said: “The recommendations in this report provide clear steps for the construction sector to help fulfil its key role in generating social value. The global pandemic the world faces has triggered an increased awareness of the importance of social value and resilience in our communities and highlighted existing inequalities. It is vital that the industry and policymakers take this into account as they develop recovery plans at the national and local level, and use this moment to drive change in how social value is delivered through construction, providing real, substantial benefit for citizens.”

Mike Hawking, policy and partnerships manager at the Joseph Rowntree Foundation, added: “Construction is likely to have a crucial role to play in stimulating the recovery of our economy. As we grapple with the scale of the current economic shock, we must do all we can to prioritise support for those hardest hit by the pandemic. It is vital that investment in infrastructure creates new jobs which are accessible to people who have been swept into poverty. If government is serious about their levelling-up agenda, they should take note of the practical examples this report offers on how to maximise the social value of any new projects.”

The webinar also highlighted parallel research by built environment consultancy Useful Projects for the Institution of Civil Engineers, which reviewed the various infrastructure sectors, particularly transport, energy and water. 

It found that delivering social value from infrastructure projects was complex. Such projects are often contentious, with long timelines, cross multiple geographical boundaries and have a negative public perception. “Infrastructure is done to people not for people,” according to Useful Projects associate Jo Dobson.

The most significant barriers included a lack of a consistent definition and measurement of social value, which is in line with the findings in the IED’s From the Ground Up. There is also a lack of knowledge and skills on how to embed social value in schemes, while 41 per cent of those surveyed for the Useful Projects report claimed board level responsibility for social value had been defined.

Local needs analyses are crucial and organisations must avoid picking social value from a “menu” of potential benefits but ground such benefits in the economic and social areas in that area. “In one area, poverty and childhood obesity might be an issue, in another it might be air quality,” said Dobson.

Clients and contractors are not being ambitious and should go beyond local employment and apprenticeship targets by creating partnerships with local charities or designing assets based on local skills. There was also a severe lack of focus on social value at the design stage of schemes.

From the Ground Up – Improving the Delivery of Social Value in Construction can be found here on the IED website.

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