The pandemic shone a light on social inequalities. Now the role of mega projects in helping to address them is centre-stage with the Government’s new social value model, writes Lizzie Owen.
What are the fastest things on earth, a recent social post asked: A cheetah? No. An Airplane? No. The speed of light? Still no. Answer: Organisations becoming “specialists” in ESG.
Environmental, Social and (Corporate) Governance was already a growing concern within boardrooms before the pandemic.
Now, Covid-19 and the heightened awareness it has sparked of social inequalities, is seeing further pressure piled on companies to show that they have a purpose beyond profit.
One major change within this area is already forcing companies within the construction sector and beyond to play their part within the ‘levelling-up’ agenda. On January 1, amid blanket Brexit coverage, new measures to ensure the delivery of social value through the Government’s commercial activities, took effect. These stated that social value should be “explicitly evaluated in all central government procurement” – not just ‘considered’ as was required under the Public Services (Social Value) Act 2012.
It marks a determined step by ministers to ensure that mega-projects create lasting and far-reaching positive impacts. It wants its vast buying power – £49 billion is spent on contracts each year – to generate not just vital services but also far-reaching benefits for communities.
Those looking to secure a slice of public sector work, will be assessed on their proposals for making a positive impact in areas such as: Supporting Covid-19 recovery; Tackling economic inequality; fighting climate change; Equal Opportunity and Improving health and wellbeing.
Under the model, a minimum overall weighting for social value of 10% of the total score is mandated “to ensure that it carries a heavy enough score to be a differentiating factor in bid evaluation”.
Since the Social Value Act 2012, contractors bidding for a slice of work on a public sector project have been well-used to responding to social value questions.
But various studies and reports demonstrate that this mechanism is not yet an effective tool for change. Problems include: A lack of clear understanding as to what constitutes social value and a lack of consistency with regard to how it is evaluated within tenders.
A lack of monitoring to ensure promises set down in tenders are realised out on the ground is another problem area.
These challenges were set out in detail in a report last year from the Institute of Economic Development, in partnership with Atkins and Arup. From the Ground Up: Improving the delivery of social value in construction, examined social value specifically within Britain’s near £400 billion construction sector. It concluded that there was a “high risk of social value becoming too diffuse and lacking focus.”
Bev Hurley, the IED’s Chief Executive, told PCSG that the new Government model has not addressed any of the report’s recommendations. Too many activities currently, she said, are “masquerading” as social value. “There is very little transparency, benchmarking and data on the work that is being carried out at present,” she said.
A social value Centre of Excellence would, she believes, provide an important step forward. It would provide a repository for social value reporting data, guidance on evaluation tools and a place where good practice case studies could be collated and disseminated. It would also act as a “lighthouse” to other sectors.
Making a mark
Some useful tips for responding effectively to social impact questions within tenders are set out by the Nuclear Decomissioning Authority in a blog post last year.
Though tailored to Sellafield – which has refreshed and relaunched its social impact programme as SiX (social impact, multiplied) – it contains advice that is applicable to all sectors – such as the importance of collaboration: “Plan to and show how you will, work with…others already engaged in this work in order to achieve more for our local communities.”
Focus, it says, on outcomes – not the volume of activity. “Think in terms of the outcomes that those projects will deliver, tomorrow and for months and years to come.”
It warns contractors: “Don’t commit to interventions unless you know you can deliver them.”
Charter for Change
At PCSG we have supported our clients over many years to produce high-scoring responses to social value questions. We have gained, through this, a strong understanding of clients’ expectations in this arena.
Recently, for example, we supported Kier with both the submission for a proposed social value strategy and the mobilisation of that strategy following contract award for a major infrastructure project in Sellafield.
Our work included production of a report which provided the basis for a 4-year social value plan on the project. It included interviewing local community members, comprehensive research into local groups and forums to engage with and a precise summary of the socio-economic challenges in the region.
Our understanding has also been deepened through our own work to add value to the community local to our headquarters, in Croydon, South London. In 2018 we were awarded accreditation as a Croydon Good Employer – evidence that an organisation has demonstrated or is working towards, alignment with the Croydon Good Employer Charter.
Many executives actively desire a legacy beyond bolstering the balance sheet. And now, more than ever, the impetus for change has come.
For further information on how PCSG supports built environment organisations in driving wider impact through their work, please contact Olly.Thomas@pcsg.co.uk.