Author: Alex Conacher

Partner: Atkins

Why do we construct projects? Why do we develop the built environment? Here we will explore something that is long overdue. We will look at how, finally, the construction industry is taking a more active approach to Social Value.

The cultural change has been enabled in part by new technologies that allow us to assess the full impact of projects on society. Impacts that sometimes stretch further than people would expect… into communities far from the project itself. 

Government is also taking a more active interest, and we will learn about new legislation that is already shaking up UK procurement processes… and forcing projects to consider Social Value right from the start. 

A new set of values

Social Value is relatively new to industry. It has evolved out of earlier ideas such as Corporate Social Responsibility and there is still a lot of discussion around what it is, what it should actually involve.

Before we talk about the modern Social Value environment… we need to take a step back and try to understand a bit more about this still-changing concept.

Penny Anderson is the newly-appointed Associate Director of social value for Atkins. It is an area she has been working in for the past 10 years…. most recently as Community Engagement Manager at Bam Nuttall… and in this time she has seen the conversation around social value change, and change again.

She says that there has been a shift in recent years… something is changing in the industry’s way of looking at the world.

“The reason a business exists isn’t just going to be around financial outputs, it’s also going to be around the purpose of it as well,” says Anderson. “And now is the time to really kind of dig deep and understand what changes we can all make, individually and collectively, to sort of become to think differently about value to think differently about the decisions we make, and the consequences of the decisions that we make.”

This is especially so in infrastructure and construction. Where there is a belief that what we do creates benefit for society. But a perfect definition of Social Value is elusive to say the least.

“I wouldn’t say have a concise definition. I think that’s, that’s the holy grail of social value. I think there’s a lot of components that make up social value, but in essence, it’s about doing things in a way which add value for people and for planet,” says Anderson.

However, there are several core components to Social Value that are easy enough to identify. These are: education, employment, training and skills, environment, and community. 

Education is about finding ways to engage with institutions to bring life to socially responsible engineering in the classroom.

Skills is about identifying and provisioning the skills needed for the industry to work in a socially valuable way. It is also about becoming conversant in the language of social value.

And finally community considerations. Making sure that what you do is really what the community needs.

A lot of the thinking around social value is in the early stages. Penny is a fellow of the newly formed Institute of Corporate Responsibility and Sustainability, which is still finding its feet… working out what it needs to do and how best to work towards its goals. So it is looking for volunteers. Any listeners who might be interested can check our show notes for a link.

But if you are wondering what steps to take on the corporate side, the best advice is to think hard about the nature of your business.

“I think it’s really important to understand if you are making steps towards… understanding what social value means for you as a business, it’s thinking about your purpose as a business, thinking about the skills that you have within the business and the knowledge that you have. And, and sort of looking at what’s going on in your local community or what within your sphere of influence. And, and understanding what you can really do to make changes in that community for the better,” says Anderson.

A shift in the culture

The background of social value has evolved over time, from its origins in corporate social responsibility, which often means activities such as charity runs. but in the last decade it has taken giant leaps and has been supported by legislation from central government. And projects are being forced to consider it for procurement and for outcomes.

Peter Masonbrook is head of social value for an organisation called Faithful + Gould and has 30 years of procurement and supply chain experience in a number of sectors. Faithful + Gould is a large multinational that provides project management, programme management, cost consultancy, and building surveying to public sector organisations and to private clients.

“The reason why I’ve gotten involved with social value in the last couple of years is that there has been a significant shift within national public sector frameworks where we are the single sole provider, and we have to demonstrate value for money. And a big part of the value for money aspect is delivering social value. So during project delivery, and as I say particularly on public sector, with public sector clients, not only do we have to deliver to time and cost, but we have to provide the added value,” says Masonbrook.

Faithful + Gould has been heavily involved in capturing, recording and reporting social value on projects that they have delivered at a national framework level.

Masonbrook says that social value isn’t something that has happened overnight, but you could be forgiven for thinking that, particularly with the rapid change that has happened over the last six to 12 months.

Changes in legislation and guidance that have brought social value to the forefront of our thinking. We are now looking at how we can maximise social, economic and environmental benefits within project delivery. Although the most recent document of note was released in December 2020, really social value goes back much further… and in a sense… the ‘modern era’ of social value begins with the Social Value Act of 2012.

At that time, in procurement, everything was about time and cost. The Act requires people who commission public services to think about how they can also secure wider social, economic and environmental benefits.

“The issue you have with the Social Value Act is that it was not mandated. It was a suggestion. It’s a recommendation to local authorities and public sector bodies that social value should take place. And as we know, a lot, a lot of public sector organisations, when it’s not mandated, they don’t take it on board, that they feel that they’ve already got enough on their plates,” says Masonbrook. 

Procurement activities are always quite intense, and at that time, there was a lot of red tape. Add to this a lack of understanding and education, and people shied away from getting involved. A nice piece of legislation, but at that time and without the force of law, it was less effective than it might have been.

The Act was a bold step, and it raised a lot of awareness, but in the grand scheme of things… ineffective. Then two years ago there was a change within procurement legislation… and the Chartered Institute for Procurement and Supply were looking to help and support training by the Crown Commercial Services of all public servant bodies who had some involvement in procurement. This was around 40,000 civil servants. At that moment the sea change in public procurement began.

Then the big year came in 2020. There were two important publications last year for social value. The ‘Procurement Policy Note 06/20’ and ‘The Construction Playbook’, which was published in December. The construction playbook was the most significant, It required procurement based on output rather than specification of input.

“When you put in a procurement tender together, and you have a specification, then that specification should be outcome driven. So, why are you building that building?” says Masonbrook.

Which should incorporate the positive impact it has. Leisure facilities should be in areas with high obesity, for example. Play areas should be near schools.

The negative side of this is… it doesn’t actually happen much yet. Although Masonbrook argues that this is why the Construction Playbook exists. To identify best practice. But the other mountain to climb is that of education. How do we bring Social Value into the procurement. The Construction Playbook doesn’t do that.

On to PPN 06/20, which was released in June 2020. PPN 06/20 contains five key themes: Covid-19 recover, tackling economic inequality, fighting climate change, equal opportunity and well-being. So the notice looks at not just that you need to measure social value, but looks at what you need to measure, and it is as up to date as to include the pandemic.

This, unlike earlier documents, is mandated for central government. So every central government procurement activity has to have at least one of the five social value themes in their bids, and this has to have a minimum weighting of 10%. A huge change from a mere recommendations.

A shift in frameworks

CEO of Pagabo Simon Toplass is an expert in procurement with 28 years of experience. Pagabo is effectively a marketplace business to support more effective procurement of construction services in the UK public sector. In short, it organises frameworks. 

Toplass says that The Construction Playbook will have an enormous impact on his business.

“So putting out guidance on procurement and strategic supplier relationship management front and centre is obviously very good. I’m a procurement person through and through. It’s a concise document, to revitalise the way we should be working. At the end of the day, we’ve all got a responsible undertaking, particularly as it’s public money,” says Toplass.

He says that in the three decades he has spent in the business, overtures have been made towards social value before.

“However, in the glaring difference now is the focus with the construction playbook, the focus on social value, which we just discussed, and the need to reduce greenhouse gas emissions to net zero by 2050… But what jumps out for me is that 10, out of the 14 key policies in the playbook are in the first of the five phases of procurement. That’s the preparation and planning phase.” 

So this section alone is over 50% of the playbook itself. If you don’t get this phase right, you are going to seriously threaten project success. And lack of time is the main danger facing procurement success.

So how do we get that to be the best practices and embody the principles and policies set out in the playbook? 

“It recognises that frameworks are needed as a route to ensure competition, flexibility across public sector projects, then playing into the preparation and planning stage and framework just like a traditional tender, you need to do a tremendous amount of engagement, tease out the policies of the playbook, all so that that can be that can be readily adopted and used in calling off from the frameworks.”

Industry support

The focus on Social Value has been accelerated as recently as December with the publication of The Construction Playbook. Peter Masonbrook says that he wants to see more focus on how to implement a Social Value approach, now that we have more awareness of what it actually is. He says that there is more work to do in other areas too. 

“Maybe there’s need for a social value, working task group or working task force, which, which looks and identifies at some of these, these areas that I’ve already talked around, particularly on skills training,” says Masonbrook. 

There is also an income inconsistent way of calculating the social value on an activity. 

“So maybe there is a need for a social value working group that looks to work with central government on how to mandate some of these things, you know, to have a consistent approach. But more importantly, which is what we’re talking about here is skills and training. That’s where the issue is, you know, I see that there’s a big gap. It is getting closer, don’t get me wrong, I know I sound like Mr. Doom and Gloom here, it isn’t as bad as it was three years ago, four years ago, there’s certainly a greater awareness. There is better legislation out there, there is better knowledge and information than there was many years ago. And there’s, I actually think there is actually a greater need and want for people to learn around social value as well.”

He says there is a passion now that you probably wouldn’t have had a couple of years ago.

“We’ve got two or three clients that are big, significant, public sector clients now wanting us to help them and get them involved in educating the project teams, capital teams, you know, around driving social value and how to do that. And you know, so you can see that that okay, maybe some of that come out from legislation. But the there is, there is a, there is an opportunity from helping and supporting clients to do that.”

Penny Anderson has an analogy that she says helps her think about social value, and she says can remind us of the impacts of our actions… and it involves buying a Dutch chocolate! 

“Just recently I’ve discovered a new type of chocolate called Tony’s Chocolonely… I don’t know if you’ve heard of it? When you open it, it’s all like, it’s like, it’s not in neat rows, like most chocolate bars are, it’s all shattered into bits… So it’s all uneven sections. And the reason it’s like that is because it’s meant to represent the uneven and spread of wealth that is, is driven through the industry through chocolate,” says Anderson. The split represents how the money for chocolate is divided. How some people get nothing, while some people get everything. “And I just… it really hit me as a really powerful story (and it’s really good chocolate too, so there’s a free advert for Tony’s Chocolonely!).

“But it did get me thinking that as individuals and as groups of people, whether it’s for business or whatever… we have that responsibility to make decisions. Every time we do something or every time we buy something. And normally buying a bar of chocolate, it’s about price, taste, what it looks like and ease of buying it. We don’t think about where’s it come from? What’s the what is the impact being down the supply chain? What’s the impact going to be when I dispose of this waste? We just think about that one moment, that makes us happy for a few seconds. 

“And I think as kind of see social value in the same way, we need to not just make decisions based on it’s what we’ve always done, or it’s the right thing to do because the business says it is. It’s actually: what is the impact of this decision and how can we change that impact? 

“You know, how can we make a different decision or rethink that decision to make it you know, what can we do differently, to be in the outputs for the people down the supply On the on the planet at the other end, are considered as well as just the sort of immediate price and an ease of use.”