Social value in construction – quick guide: the role of procurement

The government announced it was introducing a public procurement model that takes greater account of the additional social value created by contractors who are bidding for work. 

The Public Services (Social Value) Act (2012) already requires public buyers to consider how they could secure social, economic and environmental benefits as part of their procurements. This policy note highlights changes that mean, from 1st January 2021, public sector buyers are required to think differently about how they can secure social value from the goods and services they buy for their local area and/or stakeholders. The policy note also introduces a Social Value model for some organisations which sets out that social value should be explicitly evaluated rather than just being  ‘considered’. Further information is available in this guide which has been published alongside the policy note.

This is a significant policy change that means social value will become a mainstream priority in all public sector procurement from next year.

So, what does this mean for your building and construction projects?

Our category team works hard to understand what our customers’ potential social value requirements are at the earliest opportunity and have ensured that our frameworks allow customers to embed it in a way most appropriate to the individual organisations. This includes the use of social value calculators such as TOMS. 

There is a wide range of social value related considerations, such as opportunities for disadvantaged groups, delivering sustainable and healthy communities, driving climate changes, and with recent impacts of COVID-19 and brexit on labour, social value that considers upskilling the workforce and providing job opportunities is becoming more important than ever. 

To ensure that there are clear lines of sight between your unique social value expectations and what suppliers can offer, then here’s our 8 top tips on what you need to consider.

1. Embed throughout the project

Don’t just stick a few social value KPI’s into your procurement documents and hope for the best. It won’t work. Instead focus on embedding social value considerations throughout the entire project. For larger projects consider a project specific social value strategy. Don’t wait until the main contractor tender to start thinking about it either, consider writing clear guidance around social value and what is expected into the brief for project designers and project managers. 

2. Don’t ask for everything

Early community engagement brings tailored social outcomes. This will help your team to be able to focus on what social value outcomes you want for your project and help to avoid you asking for everything. What are the key themes for the area of construction? Does it have a high unemployment, or a large BAME representation? Is it in a built up area with limited community space? Engage with local charities and social enterprises to find out what is important to them and build this into your strategy.

3. Make everyone accountable

Encourage common goals and shared objectives for the project team. Are the designers/project manager/contractor/facilities management provider all linked to common social value goals? For more complex infrastructure projects Sub Alliancing may be a suitable way to bring shared objectives and success measures to social value.

4. Carefully consider what questions to ask at tender stage

At tender stage it’s great to give social value a high quality percentage, but remember it needs to be proportional and relevant. Spend some time thinking about what is relevant for your project and try to tailor the question to be as project specific as possible. A generic question is likely to get a generic answer. Think carefully about who you ask to assess and score these questions, it should be someone with the right skills and experience to know a good answer from a bad one. A good answer will deliver some tangible outcomes for the project and a bad one will have all the right buzz words, but promise little.

5. Make it contractual

Getting some great social value outcomes and tender stage is fantastic, but it’s really important that this is fed through and actually delivered. One way to do this is to convert these promises into social value KPI’s that are monitored throughout. 

6. Monitor

Once you’ve awarded your contract and started your project make sure that the KPI’s are delivered. It sounds simple, but adding Social Value KPI’s into the regular project performance reviews is a great way to ensure focus is maintained. 

7. Ask for the data to back it up

It’s a good idea to include clear instructions on exactly what you want captured. For example, if you are asking for contractors to train apprentices, it’s a good idea for them to record apprentice initials and postcode, the programme, level and start and end dates so that you can interrogate the data if you wish. Ensure your contract has a right to audit clause.

8. Share positive outcomes

If your project delivers some great social value outcomes share it and talk about what worked and why. Shared learning is a great way for us to develop and improve. 

Next steps

For more advice and guidance on tackling social value in construction projects please fill in our short online form and one of our commercial experts will be in touch. 

You can also explore our full range of construction frameworks on our dedicated construction web page.

Further policy advice and guidance on social value can be found on GOV.UK.