Let’s value social value properly…

… or the industry’s best efforts will always be an add-on, not a game-changer, argues Denise Chevin.

“It’s all about social value. We’re used to being told what we should provide as part of contract, now we’ve being asked how many apprentices, work placements and local jobs we’ll provide.” So said a dinner companion the other evening, explaining how the contracting firm he worked for is having to negotiate its way round this new landscape following the introduction of the Social Value Act.

Introduced a year ago, the Act obliges local authorities to take into consideration their suppliers’ social credentials when they award a services contract. Strictly speaking, the Act doesn’t cover capital works at the moment, but it’s a deliberately vague piece of legislation that local authorities are interpreting loosely. And besides, as we report in our agenda piece this month “Gearing up for giving back”, new EU procurement rules will allow clients to specify social benefits with capital spend later in the year anyway. So social value in construction is only going to get more important, not less.

Contractors are responding in all kinds of impressive ways, not least Interserve, which is so determined to make the impact it has on communities and the environment as important as its bottom line that it has rolled the job of finance and sustainability into one.

But like any new issue or requirement, there’s much bedding down to do, on the part of both clients and suppliers. From the research undertaken for the feature, two things immediately struck me.

First, as contractors (and industry generally) look to build up their social credentials they need a bone fide way of measuring this worth. That’s understandable. But this has spurned a raft of new initiatives to come up with a workable formula. Ideally it would have made far more sense for the industry to have got together to work out a standard measurement protocol that would allow everyone to compare apples with apples. It’s a bit like the early days of trying to establish embodied carbon, when umpteen methods were in circulation, eventually one emerges as the overarching winner that becomes the standard. Let’s make sure not too much time and effort is wasted getting there.

Second, it is potentially an almighty change for the good of the industry. But only potentially. If public bodies awarded contracts as they did on the Olympics, using a balanced score card, it would provide a huge incentive for firms to take on more trainees and apprentices and do more to protect the environment. It’s the revolution that many reputable contractors have been crying out for for some time – an end to lowest price wins.

But at the moment that’s a pipe dream. While some local authorities clearly give credit to these things, others admit to it be being no more than a contract tie breaker. If the Social Value Act is to do what it’s meant to – then public bodies need to demonstrate the courage of their convictions and put more emphasis on worth rather than cost.

Denise Chevin is associate editor of Construction Manager