What is social value?
The concept of social value has been around for much longer than the Act and many contractors have this firmly embedded within their company ethos.
Most contractors have long understood the benefits to their business of operating in this manner and have delivered social value without having been told to do so. However, this legislation places a formal requirement on public bodies to ensure this is considered at all times.
While many definitions of social value do exist, it will mean different things to different people. The Sustainable Procurement Task Force definition is:
‘A process whereby organisations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis in terms of generating benefits not only to the organisation, but also to society and the economy, whilst minimising damage to the environment.’
It is also defined as:
‘The additional benefit to the community from a commissioning/procurement process over and above the direct purchasing of goods, services and outcomes.’
While there are numerous examples of providers delivering clear and quantifiable social value in line with the requirements of the Act, there is no definitive or authoritative list of what these benefits may be. This flexible approach is absolutely necessary as what is beneficial must be considered in the context of local needs or the specific requirements of a public body.
For example, in one area there may be a strong focus on providing work opportunities while another area may have real environmental needs. Some public bodies may want to focus on working with local communities while others may look for providers to put something back into the local economy.
This is why the Public Services (Social Value) Act is not at all prescriptive in what should be done, but rather states that the procurer must consider ‘how what is proposed might improve the economic, social and environmental well-being of the relevant area’.
Understanding local needs
It is vital to align social value with the specific needs of the local community. Social value requirements could be established from the priorities listed in a local authority’s Local Area Plan or Sustainable Community Strategy.
It also makes sense to consult with the local community including residents, elected officials, social enterprises and local businesses to enhance your understanding of what social value looks like in the local context. This approach creates the opportunity to engage with key stakeholders and seek their buy-in to the process.
Defining what social value actually means in the local area is the first step towards delivering and evidencing such value.
The client and contractor need to understand what social value means in their area and establish the impact they want to achieve. It needs to take into account the location of the project and the needs of the community. However, it also needs to take into account the nature, value and duration of the project.
Priorities will change from area to area and site to site. For most, employment is the number one priority.
It is likely to involve positive local employment outcomes, whether this is delivering careers advice in schools, providing work experience opportunities, apprenticeships or creating full time employment.
An increase in employment can also lead to better living standards, lower crime as well as improved health and wellbeing. Employing from a diverse pool of local labour will also demonstrate that construction is a progressive and forward thinking industry, which may lead to attracting new talent.
Social value is not just about employment
Contractors will also be expected to deliver local economic growth, perhaps by using local labour and local suppliers to ensure that money is put back into the local economy.
Operating in a sustainable and environmentally conscious manner is firmly embedded in most construction activities but what improvements can be considered? What environmental legacy will be left behind once the scaffold is down and the trucks have gone?
Improvements to community wellbeing whether through the reduction of crime, improvements in health or simply working with the community in a positive and proactive manner should always be considered.
Other examples could include:
- Creating skills and training opportunities
- Targeting long term unemployed, NEETS and disadvantaged groups
- Offering work placements to school children and young adults
- Providing career advice
- Offering curriculum and literacy support to schools
- Creating supply chain opportunities to SMEs and Social Enterprises
- Contributing to local community projects
- Providing energy efficiency advice for residents
- Initiatives that target fuel savings for customers
- Skills workshops for residents
- Neighbourhood improvement projects
- Delivers a consistent approach for assessment
- Strengthens competitive advantage in tendering for public and private contracts
- Supports the planning process
- Enhances Corporate Social Responsibility (CSR) programmes