As the government is rumoured to be looking to reduce the weighting given to social value in procurement, ten years on from the Social Value Act, AECOM’s Andy Barker says its benefit is indisputable.
It’s a decade since the Public Services (Social Value) Act 2012 was introduced and since then we’ve seen a huge increase in the importance the built environment sector places on social value and how it is delivered. But with reports that the government is to review and potentially reduce the weighting given to social value in its contracts, at a time when many people and communities are facing increases in the cost of living, has the need for social value ever been greater?
Back in 2012 the new act decreed that when projects and frameworks are procured, authorities must consider how they might improve the economic, social and environmental wellbeing of the relevant area and how the procurement process can help secure that improvement. Fast-forward eight years and in 2020 Procurement Policy Note (PPN) 06/20 was published, which said that government teams must ensure that all major procurements explicitly evaluate social value, where appropriate, rather than just consider it. Today, we have an industry which rightly places enormous importance on social value, not least because it is often inextricably tied in with the outcomes the built environment projects are trying to achieve anyway.
The increased emphasis on social value has moved the dial from generic volunteering and corporate social responsibility activity where projects and people parachute in and out of local communities, to strategic and sustainable activity which directly addresses local needs. This is only achieved by thinking about long-term wellbeing rather than value in purely financial terms.
A step change in embedding social value
In a relatively short space of time there has been a step change in how infrastructure projects embed social value in their delivery and success is often measured by the positive change on people’s lives. The potential for social value to deliver life-improving outcomes is extensive. Equitable employment and skills, early careers development, education and STEM programmes, equity, diversity and inclusion, responsible and sustainable procurement, local and SME spend, supplier diversity and capacity building, counteracting modern slavery and supporting human rights, employee and community wellbeing, volunteering and community engagement, green spaces and biodiversity – to name a few.
Those critics who point to the difficulty in defining social value as a cause for concern, miss the point that this is indeed its greatest strength. This flexibility allows projects to understand local and regional needs and consider how they can address them through their scope of works and technical expertise.
At AECOM, through our Sustainable Legacies strategy, we are working to reach ambitious environmental, social and governance (ESG) objectives. As we support our clients and the communities in which we work, to decarbonise operations, develop green energy solutions and deliver climate resilient infrastructure, we do this against the backdrop of a green skills gap and the need to secure a just transition that leaves no one behind. Only by understanding the challenges faced by the communities we work and live in can we leverage our people and projects to achieve our ambitions. For example, using our STEM activity to develop an informed, diverse talent pipeline to sustain the future green economy.
The government must stay commited to delivering social value
Despite all these positive outcomes, there have been recent reports that the government is looking to reduce the weighting given to social value in procurement. Reports have said that the minister for Brexit opportunities and government efficiency, Jacob Rees-Mogg, is looking to redefine social value, with comments that he wants to make government procurement more accessible to SMEs.
One argument is that larger firms, through better resources, have the advantage when it comes to demonstrating social value, thereby giving them the edge during procurement. But in reality, procurement that aligns with the UK government’s Social Value Model to tackle economic inequality will enable a collaborative approach so that larger firms and SMEs can work in partnership to deliver local social and economic outcomes.
SMEs play a huge role in the work that AECOM undertakes. In the financial year 2021, we worked with more than 500 SMEs on over 1,000 projects within the UK and Ireland alone. Through collaboration and mutual upskilling and training, social value knowledge is shared and social value delivery is improved. This collaboration also sees an increasingly diverse supply chain which is better for projects through new perspectives, ideas and innovation.
We believe that however social value is framed in procurement in the future, the last decade has shown the positive impact the principle can have on communities and the supply chain where we live and work.
We don’t know what procurement reforms might look like yet, but we do not want to see government roll back on its commitment to social value in procurement, particularly given how much the principle supports wider objectives such as a just transition to net zero and the levelling up agenda. Whatever the outcome, social value will remain a cornerstone of AECOM’s Sustainable Legacies strategy and our approach to ESG.
Andy Barker is the chief operating officer for Europe and India at AECOM and executive sponsor for social value.