Does social value need to be redefined in a local government funding crisis?

It’s well known that Local Authorities are struggling for funding at the moment, representing a shortfall of £6.2 billion over the next two years according to the Local Government Association.

More than half (51%) of senior council figures warn their councils are likely to go bust in the current parliament unless local government funding is reformed. At the same time, demand for public services is at an all-time high, and every penny counts.

Back to basics

Social value in construction is now well embedded in the industry since the introduction of the Social Value Act in 2012, but it does come at a cost. Is the construction industry best placed to support delivery of these outputs?

To a large extent the answer is yes. More than ever, main contractors need to work with Local Authorities to deliver social benefits when and where they are needed. Using local suppliers and training the local workforce has become a necessity to maintain a modern workforce capable of building and maintaining their projects.

But often the construction industry can be expected to solve many of the other demographic challenges in the local area. Not only jobs, skills and the local economy, but also wider ambitions such as reducing crime, rough sleeping and supporting vulnerable people. These are important but there is a limit on how far a project can contribute effectively to areas which require specialist support.

Would resource be better focussed on ‘back to basics’ employment and skills strategies, rather than spreading resources thinly across a wide range of diverse and sometimes conflicting requirements?

The industry has gone to great efforts to mitigate the skills gap and generate future talent but delivering ever broader commitments can present further challenges and inevitably adds to the bottom line. The complex systems of measuring social value require significant planning, delivery, measurement and demonstration. Resources could be best used to support a more meaningful employment and skills strategy or re-invested in more specialised localised provision. Or have our communities become too reliant on social value from construction to replace stretched public services?

Metrics that matter

What does all this mean to the public sector? The obligations of procurement legislation and policy notes are clear about maximising economic, environmental and social benefits, but as a commissioner of public works it can be difficult to translate that into items tangibly linked to delivering construction works. Luckily, there are organisations on hand who can help target resources.

Firstly, targeted employment and skills plans are an essential part of any social value requirement. SCF has long advocated for CITB template documents such as the Project Based Approach in all procurements. These tools are free to use and invaluable to target resources where they are most needed. They set realistic and achievable levels of support for training, work experience and placement opportunities on construction sites, using a tried and tested method.

Secondly, making sure the strategy links with the organisation’s strategic goals. If it is not practical to do this, look towards a local authority’s strategic or social value plans, which often highlight key issues that can be targeted in any bespoke plan.

It is altogether more effective to create a coherent longer-term plan, that can then be referenced in individual projects or procurements. This breaks down the challenges of setting short terms goals achievable only within the scope of a single project, and instead encourages long-term thinking.

Less is often more in delivering social value, by working with a small number of key themes and setting achievable goals that can be monitored throughout the lifecycle of the project. This could include engaging a local social or voluntary enterprise to work with or tie in with other statutory requirements such as biodiversity improvements or nutrient mitigations. Aligning achievable goals with appropriate resource levels is crucial so that the team can invest in the process and build a lasting legacy that benefits all from the project team and out across the local community.

Does social value need to be redefined in a local government funding crisis?

Does social value need to be redefined in a local government funding crisis?

Back to basics

Metrics that matter

Written by

Paul Jennings

Adam Sanford