When we do look at value we tend to look only at the additional monetary value an investment, an Innovation or an improvement generates. But is this the only way to define value?
What about the improvements made to people’s lives, to people’s health, wellbeing, prospects and general happiness? Is this not value being created by your asset?
The Social Value Act was put in place to try and encourage this type of thinking, to encourage buying organisations to consider the outcomes of what they are doing. The question is has it worked?
The Act requires people who commission, or buy, public services to consider securing added economic, social or environmental benefits for their local area. It doesn’t relate to goods and works but there is no reason for the principles to not be used across all procurements.
A recent report from Lord Young paints a favourable picture on the inclusion and uptake of consideration around social value in the procurement of services.
The reason for Lord Young’s report was to consider if the Social Value Act was working and if its remit should be extended. Ultimately based on the evidence gathered the recommendation is to leave the Act in its current guise for now.
The review found that the Act is having a positive effect where it is taken up, and that it has clear potential to act as a tool for smarter procurement given the right application.
Based on the evidence shown in the report it’s hard to disagree, but as highlighted in the report more emphasis needs to be given on pre-procurement activities.
When a building is being designed and consideration is being given to a pharmacy, school, surgery or park being part of a development, do the developers truly understand what social value is being created and if these are the outcomes the end users require? Isn’t this where the greatest impact on social value can be made? Do we do enough to understand what is best for our end users?
We should also remember the importance of legacy and the operational phase of assets and the value we can create here.
When a procurement exercise talks around mandating a number of apprenticeships during construction that’s a good start, but isn’t the greater social value created if you can demonstrate that you have or will have upskilled those individuals and they will have a job 10+ years following practical completion?
One issue highlighted in the report is how many different ways there are to measure social value. A simple and universal social value index must be where we as an industry strive to reach. If we as an industry can better define, measure and understand the social benefit that our built assets generate it will help us all to tell a better story in creating the world around us, raising the profile of our industry and building a better business case for future investment.
I will be speaking at a G4C event on Friday the 31st July that will be re-thinking value in the built environment. If you are interested in the subject please come along and join the debate.
Register for the event by following this link