In recent years all this has changed. This is partly because public sector bodies are legally required to promote social value through their contracting. Partly it’s also driven by organisations seeking to restore the social value that came from local employment practices when services were provided by direct labour rather than contracted out.
Private clients are also increasingly including social value in their procurement - particularly where these organisations are also tier 1 suppliers to the public sector.
From being an attractive additional benefit, social value is now a mainstream requirement. Social value now requires that tangible and measurable targets are set and evaluated as part of the procurement process.
Does all social value have the same value?
There are almost limitless ways for businesses to deliver social value to a project. Choosing the social value target carefully can affect your chances of success.
You might think that there is a universal value measure ‘£100k worth of social value is £100k worth of social value.’ It isn’t that simple. As with everything else, value is defined by the customer.
Each procuring authority will have its own targets and priorities. Social value initiatives that have a direct impact on those priorities will carry more value to the client than other (possibly equally worthy) programmes.
Once again this means diving into the detail to understand what drives your client. For example, in areas of high unemployment, the targets will be more sophisticated than simply reducing the overall unemployment rate. There will probably be targets for specific ethnic or social groups who are under-represented in the working population.
The social value commitment may include upskilling so that when the project is completed the people who had been engaged to work on it (directly and indirectly) are better placed to find work elsewhere. This principle applies throughout the supply chain. On many projects the supply chain businesses will employ the majority of people who will deliver the project.
Other valuable benefits could be anything from providing labour or materials for local projects, improving things such as playgrounds and community halls.
A sincere commitment
Social value commitments have more value when they are seen to be sincere - something you do ‘because it’s the right thing to do.’ But how do you demonstrate this?
The solution is to approach the subject on a project by project basis but to have this underpinned by having robust strategies and policies for social value. These should detail your approach to subjects such as:
- employing local firms,
- employing local people
- giving employees time off to work on local projects
- training, recruitment and retention of staff
- offering work placements
- getting children and young people interested in the particular sector
- providing free advice on subjects such as energy reduction which are free and available to all.
The need to demonstrate a commitment to social value affects businesses in any sector and hopefully these pointers will help. The impact on the construction sector has been particularly marked and I’ll look at this in a subsequent article.