Constructionline: Realising the importance of social value

Social value has been around for a while now, yet its value in the buying process is still often misunderstood. Despite making a proven difference to local communities around the world, it's still seen as an inconvenience in some quarters, fueling the debate over its importance. According to Robert Walton, Chief Operating Officer at Constructionline, however, it’s something worth flying the flag for – no matter how many times we’re required to do it.

Social value is transforming construction procurement and the way projects are tendered for, won and executed. In some countries, such as the UK, all bidders on public sector projects are required to set out what they will deliver in terms of social value, as well as details on how they will deliver it and that they’ve created it on past projects. 

So, without even going into any of the theories, it’s clear that social value is important at the point of procurement for the construction sector – it could be the difference between a won or lost contract. So why the debate?

It probably doesn’t help that social value as a concept isn’t easy to define. The UK Green Building Council (UKBC) explains social value by highlighting three broad themes: jobs and economic growth; health, wellbeing and the environment; and strength of community. In practice, this is likely to change from one job to another as different buyers will have different priorities when it comes to social value. Some may look for your project to provide employment for minorities or underrepresented groups in the construction industry, some could want training for local people in areas of high unemployment, and others may want quality of life improvements in local communities.

As a result of this somewhat broad definition, the importance of social value in the buying process is still often misunderstood and misrepresented.

This was clear in March this year, when Britain’s minister for government efficiency, Jacob Rees-Mogg, put forward plans to reduce the country’s current 10% weighting given to social value when public sector contracts are handed out. The move put social value in the news and it was clear some wanted to dismiss it as an “ethical contract”, with the insinuation that it’s just some sort of wishy-washy, tick-box exercise to keep the ethics and morality police happy. This completely misses the point of the concept of social value and undermines its importance. 

This importance is key to local communities and the environment but also to construction businesses themselves. Helping to boost the community in which you work has positive impacts on the local economy and workforce, which in turn benefits businesses.

Its importance, however, is not lost on the UK’s National Health Service (NHS), which began adopting the government’s Social Value Model in April. The body has created net zero and social value guidance for NHS procurement teams to help unlock health-specific outcomes. This is particularly vital with the scale of NHS building work planned for the near future – with £3.7 billion earmarked for a major hospital building programme, social value added to that promises to do a lot of good for communities across the country.  

At a time when governments, public institutions and local authorities are cash strapped, realising the importance of social value could go a long way to making up some of the difference. 

So, let’s not just think about social value as something we do just because it needs to be done to complete the paperwork. Let’s realise its true value in the procurement process and treat it with the respect it deserves.

For more information on social value visit www.constructionline.co.uk/social-value.