In a world which has been left reeling from the pandemic, the Prime Minister’s view that Britain should “build, build, build” means construction is a key driver to kickstart the economy. But to ensure that UK communities genuinely benefit, our very own CEO, Simon Toplass says ‘social value should be at the centre of post-COVID planning.’
Simon shared his thoughts surrounding social value in this interview.
Construction is crucial
“The construction sector has been identified as the central building block to the UK’s recovery post-COVID. The government has a number of key infrastructure and construction projects to come over the next ten years, including HS2, Hinkley Point and Nugen – all with a total construction spend of £500 billion by 2030.
“An Institute of Economic Development (IED) report just released identifies that the government already spends £284 billion on external suppliers every year. The sector is the sixth largest source of employment in the UK and is a major part of public spending, contributing nearly seven per cent of our GDP.
“Construction is central to placemaking, economic development and UK employment. We know that if construction is going to support the country’s recovery, then we have to increase public sector build projects, increase employment opportunities and strengthen the supply chain.
“But what the sector must also do is to support ‘levelling up’ – ensuring that communities across the UK will benefit. In short, social value needs to be at the centre of post-COVID planning in construction if we truly want all our communities, north and south, east and west to benefit.
Social Value is key
“Framework organisations like Pagabo will play a major part in the post-COVID recovery – identifying and correctly measuring social value, ensuring we are tackling geographical inequality and linking back to wellbeing and thinking about what the new world will look like.
“Pagabo has always placed social value at the top of its agenda. We have always been determined to ensure that the projects which are delivered through our frameworks provide genuine opportunities for transforming people’s lives and outlooks and local economies.
“With that in mind, social value is playing an increasing part in the procurement process, but research shows that there are significant challenges across all aspects.
“There are huge opportunities and requirements for the public sector, industry and government to step up to the plate, to make sure that every one of those construction pounds delivers tangible additional social impact; this crisis will increase the need to demonstrate social value as every £1 invested in the future will be monitored very carefully.
“Having the right tools is therefore important, and we will be ensuring this continues in all new frameworks - procuring for value is a central theme, and that’s the message we’re giving to all of our delivery partners.
Pagabo’s Social Value
“Pagabo uses software which, we feel, is the best in the market and can give very accurate information regarding the social value, social investment and economic benefits of a particular building. Whether it be a refit and refurbishment or new build completed in modern methods of construction, we’re constantly enhancing our software.
“Pagabo currently has around £1.6 billion of construction activity completed or procured through Pagabo frameworks and using our calculator this equates to around £2.63 billion of social return on investment.
“Over the past three months, clients have been looking for accountability and transparency. We’re seeing clients wanting to get under the skin of social value models, especially models which offer to put a value in pounds and pence on a project.
“They want to know where the data is coming from, how it fits with legislation, and its accuracy. The sector is under more scrutiny overall and on social value in particular.
“We will want to see economic recovery, local spend, job creation and developing skills – every project needs to have demonstrable social value behind it. Now, more than ever, our clients want to see the impact of every £1 they invest.
Impacts of the pandemic
“There’s no getting away from the impact the pandemic will have on employment, with people losing their jobs to redundancy.
“Undoubtedly, there’s going to be a lot of churn and this presents an opportunity for businesses to reboot their workforces, with lots of training, and opportunity to put diversity in the workforce front and centre as well as re-engaging with communities that have been in ‘hibernation’, as the Prime Minister recently put it.
“Many construction businesses find it challenging to find a consistent way of demonstrating the pounds and pence outcomes of social value. But it’s more important than ever to be able to do this effectively – and show how it is genuinely benefiting communities and tackling the geographical inequalities we have in this country.
Credible Social Value
“The key here is transparency. We need to rely on standardised metrics and measurements to ensure that the data produced relating to social value is robust.
“Social value is being taken more seriously than ever now. Once seen as a set of fluffy infographics in a board report, social value relies on detailed research, drawing on government standards and global best practices.
“For a business to be able to provide credible social value information, it needs to be engaging with that itself or with a partner that can provide it. There’s likely to be a big push regarding standards and this will allow more comparable data between projects.
“Pagabo will be investing in social value through its Loop and working towards Procuring for Value. As the UK debt increases, every £1 spent by government in the future is more important than ever. It’s vital that we can demonstrate the wider socio-economic and employment benefits through social value tracking.
“By speaking to contractors, I sense the sector would like to see a unification of social, economic and environmental value together with positive mental health within the overall goal of supporting an economic recovery. The question is, how can the industry work together to achieve this shift in mindsets?
“The answer is having a clear social value agenda for the business in the short, medium and long term as well as a meaningful feedback loop across the business and supply chain, which means that businesses can start to see their full impact.
“It’s only by engaging with your stakeholders on an ongoing basis that you can understand where you are succeeding and where you are falling short. I will add though that it is not only about being able to report to clients, but also about understanding where your business excels at creating impact so that you can do more. Framework providers need to put more emphasis in their procurements and encourage clients to include and develop their project deliverables, which is just as important.”
Building Blocks Podcast
To hear more on social value, listen to the first episode of our new podcast, Building Blocks, which features Fozia Parveen from ISG, Sara Lawton from Construction Impact Framework and Dr Victoria Johnson from Social Profit Calculator.