How serious are we about social value in the infrastructure sector?

If you listen to our Welsh Government you’d think we’re pretty serious about it. Although who knows what happens to all the data that pops out of the Community Benefits Measurement Tool? Depends what goes into it I suppose? Not enough I know that!

If you listen to a myriad of clients, from local authorities to health boards and other public bodies you’d still think pretty serious – but don’t ask too many questions ok. And if we listen to each other, we’re doing pretty good aren’t we?

Well no, I don’t think we are. Not really! A small number are, but not many.

I’ve been involved in this in one way or another, initially as a public sector client, since the mid-noughties, about 2004-5. We were playing about a bit but doing something. Then we got a bit better, moving from non-core clauses, to core, doing a bit with jobs agencies and schools. Better than nothing. And then some got a bit more sophisticated linking up with various agencies, producing supporting resources, etc. Some really good Exemplar projects too. But for the last 10 years most have either plateaued or regressed. And to be honest far too many in the civils sector just didn’t bother joining the party at all. And my view is that far too many clients, who should be leading, just can’t be bothered. Far too many local authorities for instance – the ones who should be most into this – are not delivering.

Although there are some, too few, really shining lights.

So that’s my answer to the question. You may disagree?!

So, what do we mean by social value? What you often get is a client requiring a Contractor to deliver tangible and measurable community benefits – usually linked with a particular focus on Welsh Government primary policy objectives. It could be :

  • Training and recruitment of the economically inactive;

  • Supply chain initiatives – e.g promotion of open and accessible supply chains that provide opportunities for SMEs to bid for work; and promote engagement of social enterprises;

  • Environmental initiatives – e.g opportunities to minimise the environmental impact of the project and to promote environmental benefits;

  • Engagement with third sector;

  • Educational initiatives, e.g contribution to education through engagement with school, further and higher education curriculum;

  • Community initiatives – e.g support tackling poverty and leave a lasting legacy within the community;

  • Retention and training of existing workforce; and

  • Apprenticeship opportunities – creating new opportunities or providing ‘hands on’ training weeks for current apprentices.

So, lot’s of things, sometimes contractually binding, sometimes not – and, sadly, sometimes not featuring at all.

How important is social value? Why should we do it? Well, put simply, it’s the right thing to do?

The investment that goes in to infrastructure projects provides incredible opportunities to deliver social value to the communities and regions in which they take place. For many communities major projects can represent “once in a lifetime” regeneration investments and opportunities to boost “life chances” of people in those communities. In Wales, the public sector spends over £2bn per annum on construction work. If we use the well versed £2.84 “value” generated for every pound spent on infrastructure projects you’re talking £5.68bn of “value”. It would be criminal to ignore that but much of the public sector does exactly that even though the public is the main beneficiary. Far too often the private sector delivers social value despite the public sector and not because of it!

But there’s a policy and legislative context to social value too.

Procurement Policy

The Welsh public sector is the largest user of services and goods from the private and voluntary sectors in Wales.  Community Benefits form a cornerstone of the Welsh Government Procurement policy and the Wales Procurement Policy Statement requires the public sector in Wales to ‘apply Community Benefits to all public sector procurements where such benefits can be realised’.

Legal Framework

Here’s the boring bit (unless you’re a lawyer) :

Government of Wales Act 2006 and Well Being of Future Generations Act 2015

Section 60 of the Government of Wales Act 2006 provides the express powers required to allow inclusion of Community Benefit requirements (Promotion etc. of Well-being) in construction contracts. These powers underpin public sector bodies ‘well-being’ duties under the Well Being of Future Generations Act 2015 whereby a public body must set and publish well-being objectives designed to achieve its well-being goals and take all reasonable steps to meet those objectives..

Public Contracts Regulations 2015 (2015 Regulations)

Regulation 70 of the 2015 Regulations provides that Contracting Authorities can impose special conditions in relation to the performance of a contract and Regulation 70(2) expressly states that these special conditions can include economic, innovation-related, environmental, social or employment-related considerations.


Welsh Government Community Benefits Guidance “Delivering Maximum Value for the Welsh Pound – 2014”

And, of course, the Value Wales Community Benefits Measurement Tool has been around for a long time hasn’t it?

So, lots of good policies, legislation and guidance!

So, how are we doing?

Not as well as we like to think we are. And definitely not as well as we like to tell people we are!

To be fair there are some really good performers out there. Some working on major highways projects, some on extensive school construction projects. The successful social value programmes tend to be associated with fairly big investments and on projects and programmes which maybe last 3-4 years. So, you get scale and longevity and continuity.

But think of the missed opportunities from programmes of small projects! I’d estimate that from that £2bn+ spend per annum about half of it features little or no social value. That’s almost £3bn of social value lost per annum. We can’t afford to do that as a nation.

It’s because some individual investments are often deemed too small to be worth bothering with. But, these opportunities shouldn’t be restricted to just those major projects, they could and should be delivered through longer term regional infrastructure investment programmes made up of smaller projects. The community benefits delivered by the cumulative effects of such programmes eg Transport Grant, would contribute so much towards improvements in the wellbeing of our communities as well as supporting sustainable development across the regions of Wales. But we lose it because we can’t be bothered, we don’t want to think strategically about social value and, possibly worse of all, far too many remain obsessed with taking a transactional approach to social value – I tell you what to do, you give me a price, if you’re successful (aka lowest price) you get on and deliver the social value alongside the construction work – just don’t bother me with it, it’s your problem, tell me when it’s done! In fact, very often, don’t even bother telling me because I’m not that bothered.

Can we do better?

I need to caveat this again by saying that there are some out there who are doing a really good job – there’s just not enough of them. If you want to join them just take a look at what they’re doing, why they’re doing it and how they’re doing it. And just copy them – and I mean clients, consultants and contractors.

But here’s a few more pointers :

Focus on value

You could say that about everything couldn’t you?! But remember – this is about people and communities, not commodities. People don’t fit neatly into boxes, they need to feel valued. If you’re not going to do that then you’re probably better off not doing anything at all!

If you’re a client in the public sector, do it because you have a moral and legal obligation to do it, and, out of everyone, you are best placed to do it, and reflect that value in your procurement of suppliers – and enforce those requirements.

If you’re a supplier, do it because it adds value to your business – in many ways.

Think strategic – and long term

Collaboration not transaction. Doing this on a “job by job” basis doesn’t work, unless it’s a really big long term jobs where you can get the economies of scale to invest in delivering this properly and get the benefits over a reasonable length of time – both HoV and schools programme are good examples. Are there others where it hasn’t happened? Yes, just look at the amount of frameworks that are just not delivering sufficient value. And just because you do lots of “small jobs” for the same client or different clients doesn’t mean you shouldn’t do it.

Think long term, join the dots/jobs! So much of our investment (c£1bn per annum) is on fairly smallish jobs that’s a huge loss of social value if we don’t deliver.

Collaborate – public and private sectors

Private sector suppliers have a big stake in all this – corporate social responsibility, supporting their communities, developing the workforce of the future.

Arguably, the public sector has an even bigger stake in all this – economic development of local communities (the foundation economy), work for local businesses, social responsibilities to help people from disadvantaged communities, local education authority role – curriculum, work experience, apprenticeships, etc.

So, why doesn’t the public sector, with its access to communities, schools, colleges, funding, etc, establish support structures with their partners to help successful suppliers deliver social value/community benefits. Why don’t they support shared apprenticeship schemes, why don’t they support schools and colleges to benefit from the social value investment, why don’t they identify the community projects which need support. And don’t get me started on Regional Skills Partnerships and Public Service Boards. The public sector is far too heavily governed in these areas and it’s difficult to see what value they bring.

So, my message to the public sector, who ultimately have the most to gain from social value, is collaborate between yourselves, as different agencies, and then support the private sector to deliver social value – rather than just transacting with them.

And finally – just care about it!

The clue is in the words – social and value. And there are more clues in the words community and benefit. This is about hearts and minds. Those who are responsible for delivering infrastructure works, public or private sector, procurers or engineers, clients, consultants or contractors – just need to care about this. And those at the top of the food chain need to stop passing the buck down the supply chain hidden in meaningless clauses and targets. You need to lead!

I’ve heard so many in the construction sector say, when it comes to “social value” or “community benefits” – “Why should I do this, I’m not a social worker”.

Well you may not be a social worker but you do need to have a social conscience!

Ed Evans is Director of the Civil Engineering Contractors Association (CECA) Wales