How serious are we about social value in the infrastructure sector?
Ed Evans, Director of the Civil Engineering Contractors Association (CECA) Wales asks how serious are we about being good at social value in the infrastructure sector?
If you listen to our Welsh Government you’d think pretty good – although who knows what happens to all the data that pops out of the Community Benefits Measurement Tool or whatever the latest “system” is? Depends what goes into it I suppose? And not enough I suspect!
If you listen to a myriad of infrastructure clients, from local authorities to health boards and other public bodies you’d still think pretty good – don’t ask too many questions ok. It’s all good isn’t it?
And if we listen to each other across the infrastructure sector, we’re doing pretty good aren’t we?
Well no, we’re not really! Ok, some are. But not many.
And we need to stop the “emperor’s new clothes” bit and call it out. In fact we need to call out the illusion of good performance in public policy delivery across all sectors but that’s a conversation for another day!
I’ve been involved in construction and infrastructure delivery, in one way or another, for too long to mention. But my interest in how we could drive greater social value from our investments started, initially as a public sector client, in the mid-noughties, 2004ish. We were playing about with it in those days but at least we were trying to do something. Then we got a bit better, moving from “non-core” clauses in contracts to “core” which essentially meant “do it if you want to” to “you have to do it”. And we started doing a bit with jobs agencies and schools too. It was better than nothing. And then many got a bit more sophisticated linking up with various agencies supporting disadvantaged communities, producing supporting resources for schools and colleges and so on. There were 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 infrastructure 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 it’s not all bad!
So that’s my take on things. If you work in the sector feel free to disagree – but back it up if you can.
Anyway, just to make sure we’re all talking about the same thing, what do we mean by social value in the infrastructure sector?
What you often get is a public authority requiring a contractor or a supplier of services to deliver tangible and measureable community benefits – usually linked with a particular focus on Welsh Government primary policy objectives:
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 curriculums
Community initiatives - e.g support tackling poverty and leave a lasting legacy within the community
Retention and training of existing workforce
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.
But why should we do it anyway?
Simply, because 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 benefitting from major projects they can represent “once in a lifetime” regeneration investments and opportunities to boost “life chances” of people in those communities.
You’re talking, in Wales, over £2bn per annum. If we use the well versed (for those in the know!) £2.84 “value” generated for every pound spent on infrastructure projects you’re talking £5.68bn of “value”. Much of that is based on local employment and local supply chains but, I suspect, if you add in and quantify the training and educational aspects alone you’re talking considerably more. 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. A bit boring I know but it’s still important. 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'.
Section 60 of the Government of Wales Act 2006 also provides the express powers required to allow inclusion of Community Benefit requirements. And these powers underpin public sector bodies 'well-being' duties under the Well Being of Future Generations Act 2015. 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.
And as it that wasn’t enough we have the Public Contracts Regulations 2015 (2015 Regulations) providing that Contracting Authorities can impose special conditions in relation to the performance of a contract and that these special conditions can include economic, innovation-related, environmental, social or employment-related considerations.
And, of course, where would we be without the guidance in the Delivering Maximum Value for the Welsh Pound - 2014 and the Value Wales Community Benefits Measurement Tool which has been around for arguably too long!
So, lots of good policies, legislation and guidance!
But how are we really 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 civil engineering 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 on construction in Wales 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 (think of recent investments in Active Travel or Covid related projects to improve our health and wellbeing) 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 worst of all, far too many remain obsessed with taking a transactional approach to social value.
What does that mean? Well it goes a bit like this : I’ve got the money so I’ll 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.
How 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. It’s worth taking a look at what they’re doing though, why they’re doing it and how they’re doing it. And imagine the difference we could make to communities and people if more just copied them.
But here’s a few pointers to make things better :
1 - Focus on value
You could say that about everything couldn’t you?! But remember – social value 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 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 so many ways.
2 - Think strategic and long term
It works so much better if you collaborate rather that transact. 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. The programme to create 21st Century schools and some of the larger transportation projects are good examples of this. But just because you deliver lots of “small jobs” doesn’t mean you shouldn’t do it.
Think long term, join the dots/jobs! So much of our investment, about £1bn per annum, is on fairly smallish jobs and that’s a huge loss of social value if we don’t deliver.
3 - Collaborate across public and private sectors
Private sector suppliers have a big stake in all this. They have corporate social responsibilities but they also want to support their communities and develop the workforce of the future.
But, arguably, the public sector has an even bigger stake in all this. They have responsibilities for the economic development of their local communities (anyone heard of the foundation economy?), providing work for local businesses, and social responsibilities to help people from disadvantaged communities. They also have a local education authority role where the construction sector could support delivery of the curriculum, work experience and apprenticeships.
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 and 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. We need to do things rather than just talk about doing things!
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!
And if I can end with this. 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”.
Ultimately you don’t need to be a social worker to have a social conscience.
The Civil Engineering Contractors Association (CECA) Wales Cymru represents 60 of Wales’ largest and smallest civil engineering contracting businesses with a cumulative annual turnover in excess of £1bn and employing over 6,000 people. These businesses play a huge part in supporting communities across Wales and make a significant contribution to the economic prosperity of our nation. Our members are also major providers of training and apprenticeship opportunities. On a more fundamental level it is our members who will build the infrastructure that our nation needs to prosper.
