Social Value Act changes may not solve skills crisis
A consultation on the Social Value Act could mean public procurers have to change how they evaluate construction tenders. But will this help the industry’s chronic skills deficit? Assad Maqbool has his doubts.
The skills gap is readily apparent to everyone working in construction. With so much of the industry driven by public procurement, what can central government do to lead the change required?
The Social Value Act 2012 requires public authorities to consider how procurement of construction services might secure improvements in economic and social wellbeing.
Part of that is improved employability and skills. But, in the vast majority of public procurement, there remains little emphasis on social value offerings, so bidders focus on the quality and price evaluation criteria to win the work.
There are examples of public authorities taking a structured and collaborative approach with their construction providers, both at first tier level and down the supply chain. However, they are comparatively rare.
So, as Willmott Dixon CEO Rick Willmott noted in his interview in CM’s February issue, the government has decided to step in.
The Cabinet Office is currently consulting on proposals which force central government departments to take into account social value when procuring. The upshot is likely to be amendments to the act that would make social value a mandatory part of evaluation criteria.
“The paper proposes that there should be a weighting of at least 10% attributed to social value in the award of public contracts.”
The consultation paper proposes that there should be a weighting of at least 10% attributed to social value in the award of public contracts to ensure that social impact would be a differentiator between bids.
However, unless the construction industry responds in force to mould the outputs from the consultation, there are a number of issues which are likely to limit the tangible impact on skills.
First, the changes are not planned to impact on procurements for infrastructure, construction and capital investment contracts over £10m, because these are already covered by the “balanced scorecard for growth” developed by Crown Commercial Service and published in 2016. This is a scorecard system designed to ensure that major government procurements achieve economic growth and best value for the taxpayer.
Matrix of outcomes
Second, unsurprisingly given the broad policy agenda of central government, the proposed social value delivery model is divided into a number of high-level themes: diverse supply chains; inclusion, mental health, and wellbeing; environmental sustainability; and safe supply chains.
Beneath each of those key themes, the model sets out a matrix of key policy outcomes, along with standard award criteria, suggested evaluation questions, and specific policy metrics for monitoring outcomes.
However, departments will be able to “select those policy outcomes that are relevant and proportionate to the subject-matter of the contract”. This may well lead back to the inconsistency of approach that has historically prevented proper investment in skills.
The scale of the employment and skills deficit needs a pure focus that allows businesses to take a strategic, long-term and collaborative approach.
The consultation ends on 10 June and can be viewed at www.gov.uk.
Assad Maqbool is a partner at Trowers & Hamlins and a trustee of the Construction Youth Trust