Social value key to maximising resources when budgets are tight

posted by Louise Townsend
29 August 2019

The past 10 years have been a tumultuous period for the built environment – many businesses have experienced difficulties, and the industry has rightfully had to re-examine various elements of its operations.

This has played out against the background of the tightening of the public purse strings, resulting in scarcer resources for public sector construction and infrastructure projects.

From the government’s point of view this has put extra emphasis on ensuring contracts are successfully completed while also delivering value for money and contributing to wider growth in the economy.

If your business isn’t already committed to social value, it should be

The Public Services (Social Value) Act came into effect on 31 January 2013. For the past six years, there has been a requirement for those who work in procurement to give increased consideration to what they can do to improve the social, economic and environmental impacts of the work they commission or deliver. The Cabinet Office is currently undertaking a consultation on the next steps for further increasing social value in the awarding of contracts, and is additionally investing in upskilling staff by training 4,000 commissioners in order to increase their competency in procuring to value, rather than just cost.

So if your company hasn’t already embedded social value in its operations, it needs to if wants to deliver public sector work in the future.

During the consultation process, the government has spoken of the need to prevent “unnecessary burdens for businesses”, and it is also vital that whatever changes arise from the consultation, policies remain business-friendly while simultaneously increasing implementation of social value.

Incorporating social value can improve the presence of underrepresented groups in your supply chain

Social enterprises often consist of more diverse workforces and can be designed to positively impact upon the working lives of marginalised groups. By implementing such groups into your supply chain, you can ensure the economic impact of your operations can be felt by a wider range of people and play a key role in your commitment towards equality, diversity and inclusion (EDI).

Social value can help you protect the future of your industry

A vital aspect of embedding social value in your company’s operations is the legacy you leave for the future. It’s no secret that in my own industry, construction, there is a significant skills gap that means there are uncertain times ahead in the short to medium term. Therefore, by committing to supporting training courses and apprenticeship programmes we are not only showing our ability to deliver social value but also safeguarding the future of the industry by ensuring the next generation of workers has the right skills and training.

Large companies have a duty to mentor SMEs, microbusinesses and minority owned businesses

Social value has great potential to increase opportunity for under-represented businesses, and it is my hope that future legislation and procurement approaches will be designed to encourage increased integration of SMEs, social enterprises and voluntary organisations into mainstream supply chains. This will make the entire supply chain more resilient, resulting in better results both for themselves and larger companies. This in turn would result in increased efficiencies across large scale projects.

Private businesses can work with the public sector to help drive social change

Each community has different needs. Through research during the procurement process, it is possible to identify the most pressing needs a locality has – such as community cohesion, health or employment – and ensure the project makes a proportionate and useful impact on these needs during the entire lifecycle of the work taking place.

Embedding social value will help your company and industry be more sustainable

It is imperative for construction to become more resilient and solid. Over recent years we’ve seen the major difficulties that have befallen companies who benefitted from repeat government work. The importance of construction’s health is evidenced by how central it is to the government’s industrial strategy – it is an industry that reaches every aspect of our lives and so is uniquely placed to have a positive impact on communities throughout the country.

By understanding and embedding social value a company becomes more resilient, increases its benefit to the communities it works in and therefore makes it more suitable to deliver government contracts – which will prove key to the industrial strategy’s overall success.

☛ Louise Townsend is head of social value and sustainability at Morgan Sindall Construction

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