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How construction can improve social value

group standing at lights uk construction

A movement is underway in the UK to encourage the construction industry to do more to improve civil society cohesion and ethics. This is steering the direction of Government legislation.

The UK Government has recently published a new Civil society strategy, intended to set a direction for government policy to help it support and enable civil society to achieve its potential.

Announcing the strategy, David Lidington, Minister for the Cabinet Office, pledged to “require all departments in central government to regularly report on the social impact of new procurements, and we will train all 4000 of the government’s commercial buyers how to take account of social value and procure successfully from social enterprises.”

He said that the Public Services (Social Value) Act 2012 will be amended so it applies to the whole of government spending and decision-making, to make such procurement decisions apply to goods and works as well as services. Public bodies will have to “account for” the social value of new procurements, rather than just “consider” it as currently.

Wales already has a similar but wider and more robust act.

The Westminster government will also consider whether the Social Value Act “should be applied to other areas of public decision-making such as planning and community asset transfer”.

Construction sector leading

In making this move the government is responding to a groundswell of opinion across-the-board, particularly coming from the construction sector, which has been working on the creation of social value for several years.

The Civil Society Strategy sees the five foundations of social value as: people, places, the social sector, the private sector, and the public sector, which should all work together:

  1. People: the government is to run a Place Based Social Action programme to encourage communities to collaborate with local private and public sector organisations to create a shared vision for the place they live and work in.
  2. Places: the public sector is being asked to “focus more on the needs of places and work with service providers, the private sector, individuals, and communities in a place,” and… make more sensitive and appropriate policy” to foster communities.
  3. Social: the government will increase support for the social sector.
  4. Private: encouraging businesses to put social and environmental responsibility at the heart of what they do, the government is to establish a Responsible Business Leadership Group with a new £55 million financed from dormant accounts to fund a new, independent organisation to tackle financial exclusion.
  5. Public: helping social sector organisations, that wish to deliver public services, to form mutual companies.

But while all companies and organisations in the property and construction sectors are arguably already embarked on a global journey to “good and green” business, whether they know and like it or not, their progress depends on their willingness and ability to translate policy into better and best practice on the ground.

Several moves are afoot to encourage this progress:

The UK Green Building Council (UKGBC) is working with local authorities and private sector to embed best practice training in social value.

In doing so it will build on the work carried out by its Social Value task group, which is part of the UKGBC cities program. The task group is producing guidance for industry and local government on using social value as a lens for understanding and incentivising high quality, sustainable development.

Constructing excellence (the English platform for change in the construction sector supply chain based within BRE, the Building Research Establishment) has established a Social Value theme group. This is looking at how clients take social value into consideration during procurement and planning and how the industry can best promote the social impact of the built environment.

One suggestion for this is that there should be a ‘BREEAM’ for social value – i.e. an award scheme that rewards, recognises and educates companies in best practice.

Constructing Excellence and BRE host the Action Programme on Responsible and Ethical Sourcing (APRES), a group of industry and academic partners in the construction industry committed to improving the procurement, purchasing, specification and employment of materials, products and services, including labour. They include 27 stakeholder organisations such as Crossrail, Heathrow, the Environment Agency and Highways England.

Its aim is to encourage the same emphasis on the sourcing of people and values as is currently placed on the sourcing of materials.

APRES has produced a manifesto of measures to embed ethical sourcing, a designers’ guide and several learning modules for training, managed by the Engineering and Physical Sciences Research Council.

APRES’ Eight pathways model starts from the belief that companies are increasingly conscious of the need to collaborate and work with their supply chains in order to form longer term strategic partnerships. In the appraisal of purchasing decisions, there is a scorecard to determine the balance of ethical and responsible practices that had been integrated into the procurement process.

The APRESmodel has been designed to take an organisation from new entrant level of performance towards best in class. For instance, in compliance and auditing, from the basic position of “non-certified management in place and compliance understood” to the best practice utilisation of “audits and compliance to great benefit for a company and its supply chain, with longer-term goals visible for higher-risk supply-chain partners and a means of sharing and disseminating learning”.

The model is intended to stand alongside the CIRIA (Construction Industry Research and Information Association) handbook, Responsible sourcing.

Ethical sourcing is about updating cultural approaches in procurement that bridge the gap between the aspiration to do good and the actuality. For example, slavery remains rife in the global supply chain. Human rights abuses are not difficult discover. The potential damage to the reputational risk of companies is huge.

But labour rights are only one of the responsible and ethical sourcing concerns. The UK manifesto for ethical sourcing in construction was created in 2015 in a special “hackathon” and comprises ten pledges to align industry values with business ethics and human rights. It includes categories such as bribery and corruption, traceability and transparency, legality, the circular economy, certification and accreditation and openness and communication.

Ethical Sourcing Construction Manifesto

There is no absence of standards already in place covering this area: from the Sustainable Development Goals (SDGs), Global reporting initiativeand Dhaka principles; via SA8000, AA1000 and ISO 20400; through to the APRES designers’ guide, the CIRIA handbook on responsible sourcing, ETI base code, to BES 6001 from BRE.

Social value is often qualitative not quantitative, and so is hard to measure. HACT (which helps to promote innovation across the housing sector) and Simetrica (which uses metrics to help evaluate the social impact of policies) have developed a range of tools to apply the values in the Social Value Bank.

The first is, Measuring the social impact of community investment: a guide to using the wellbeing valuation approach (which contains headline figures from the Social value bank), and a Value calculatorspreadsheet tool to map the social impact of a company’s community investment activities and their impact on the local economy.

To these has been added a new Mental health social value calculator to help housing associations, charities, councils and contractors measure their impact on improving their customers’ mental health.

Simetrica has also produced the Australian social value bank, another tool which allows a company to measure social value in a standardised way using a robust and consistent method which is recognised by the OECD.

Pressure is currently on social housing to improve its performance. HACT’s new report, Rethinking customer insight: moving beyond the numbers,represents the results of a two-year research project funded by seven leading housing associations into this area.

It recommends a radical, but common-sense, overhaul of strategy in assessing the effectiveness of social housing: rather than collect data to demonstrate how good social housing providers are, providers need to collect data to improve how good they are. This attentive responsiveness is the essence of improving social value in all communities.

Finally, a National social value conference will take place in Manchester in November.

“Social value” is the latest buzz phrase to focus attention on how purchasing decisions can be a force for good. It yet remains to be seen whether it can truly make a difference.

David Thorpe’s most recent books are Passive solar architecture pocket reference and Solar energy pocket reference. He’s also the author of Energy managementin building and Sustainable home refurbishment.

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