Firstly, CSR is dead. Responsible businesses generate both economic and social value.
Secondly, I have a confession to make. I’m an unashamed “Care Bear”, a title bestowed upon me by the industry when I set up Construction Leeds (now Construction & Housing Yorkshire) back in 2006. We deliver what used to be termed as the “fluffy stuff”. Thankfully this is a term I hear less of these days.
So what is Social Value in the built environment?
The 2012 Social Value Act terms it as improving the economic, social and environmental well-being of the relevant area. It can be the answer to the question: “What contribution to society do projects, investments and businesses make”? But this covers a whole gamut of potential programmes from philanthropy to local purchasing that becomes unclear, unmanageable and immeasurable.
For me Social Value is about creating employment, supporting the development of training and skills and buying goods and services from local construction contractors, material manufacturers and service providers. The philanthropic aspects of Social Value, traditionally within the scope of CSR, such as grants for local organisations, sponsorship or volunteering are a fantastic and welcome addition but have little long-term value to the local community. A job, a qualification, an income, a contract; this is what changes a life and has the potential to change the communities in which we live and work.
If we do not act more responsibly as an industry by investing in our current staff, recruiting the workforce of the future and working with our supply chains, costs will rise as skills shortages sharpen and wages increase. Social Value should not be deemed an additional cost to the industry; it’s how businesses, in any sector, can and should operate.
But it’s more than just the numbers we train, recruit or contract; it’s about the long-term benefits and outcomes for the industry and the communities in which we work. If we create an apprenticeship it’s not just “1” on a KPI spreadsheet, it’s a person creating their future in the industry, it’s addressing the skills shortage within the industry, it’s supporting a future family, it’s a potential new business, it’s taxable income.
Another Constructing Excellence blog An introduction to procuring for value, written by Don Ward, talks about procuring for outcomes, “the benefits (outcomes) of good built facilities in use for clients and end users usually far outweigh the costs of design, construction and operation.” Don discusses balancing capital expenditure, operational expenditure and other business expenditure to look at the total cost of a building. I would include social expenditure and value within this balance, enabling us to plan, procure, deliver and measure both the economic and social value of a development; allowing shareholders and the public sector to invest in developments that have greater social return and therefore long-term savings for the industry, local and national government.
This is of immediate financial benefit to the industry, as public and private capital investment would increase to achieve long-term savings and benefits.
This may sound farfetched but there are many – too many – tools out there to measure Social Value. Some better-known tools are Social Return on Investment, Social Earnings Ratio and the Wellbeing Valuation.
If, as an industry, we choose one tool, we can create a singular approach to creating, delivering and measuring Social Value in the built environment nationwide. This would:
- Deliver efficiencies in achieving Social Value in the industry.
- Ensure that we are all accountable and we can celebrate successes and challenge failures.
- Increase collaboration within the industry by working to a collective social objective.
- Create transparency and continuity and stop us reinventing the wheel every time we work in a new city.
- Create a new workforce in the industry that addresses our skills shortages, our image and protects our future,
- Delivers savings for the client by generating outcomes that reduce a community’s reliance on public services and increases taxable income.
- Regenerates local communities by providing real opportunities for people to realise their own potential.
Essentially, what I’m telling you is please do me out of a job – something that has been my goal since starting my career in 1997.
This blog is the twelfth, and last in a series prepared by members of the Constructing Excellence Procurement Theme Group to provoke debate and seek to provide thought leadership on a crucial aspect which we see as a major barrier to improving the productivity of the sector. Comments are welcomed on the Constructing Excellence LinkedIn page or on Twitter using the hashtag #CEProcurement.