The Rising Importance of Social Value

Two senior appointments in recent weeks highlight a growing area of interest for multi-disciplinary consultancies – Social Value.

Mott MacDonald named Caron Dunlop as social value Technical Director in March while Atkins appointed Penny Anderson as Associate Director of social value.

Meanwhile Amey published its 2020 Social Value Report, revealing that it only bought renewable energy last year and spent almost ￡5 million with the voluntary, community and social enterprise sector.

So what is social value and why is it suddenly a buzz word for many forward-thinking consultancies?

The Public Services (Social Value) Act came into force back in January 2013, ultimately requiring those commissioning public services to ‘consider’ how they could use the contracts to secure wider social, economic and environmental benefits.

But this duty was tightened in 2018 following the collapse of Carillion. As part of efforts to rebuild trust in public procurement, ministers announced that all major relevant tender processes would now ‘explicitly evaluate’ social value.

“We will ensure that contracts are awarded on the basis of more than just value for money – but a company’s values too, so that their actions in society are rightly recognised and rewarded,” said Cabinet Office minister David Lidington in 2018.

The government then consulted on how to measure performance in this area – and finally developed a Social Value Model to be applied to all procurement processes from the start of this year.

This model lists five themes of social value where bidders can accumulate points – aiding the Covid-19 recovery; fighting climate change; tackling economic inequality; providing equal opportunities; and supporting wellbeing.

Importantly, the government guidance to implementing the Social Value Model says achievements in this area should be worth 10 per cent of the total quality score available to a bid.

Perhaps with all the focus on the pandemic and Brexit at the start of this year, this significant change to public procurement policy may have gone unnoticed by some in industry.

But the appointments we mentioned earlier clearly show that some companies are very much alive to the growing importance of managing – and effectively recording – the social value generated by projects.

Mott MacDonald said Dunlop would help clients “respond to their responsibilities under the Social Value Act” as well as making sure that improving lives was “embedded into project delivery”.

Atkins Practice Director Vicky Hutchinson said Anderson’s appointments would help “better measure and benchmark our performance, increase social value and celebrate and share those insights with our clients, partners and industry”.

Amey Head of Social Impact Emily Davies said that, as a public service provider, the company had a role to “empower our employees, suppliers and wider networks to genuinely be a force for positive change and long-term benefit to society”.

As well as helping clients comply with the law, and boosting their own chances of winning work, there is a third driving force for companies to up their game on social value.

With opposition to big infrastructure projects causing a number of notable planning delays, project promoters are increasingly keen to demonstrate the added value of their schemes.

For residents of a Buckinghamshire or Cheshire village facing years of disruption from the construction of High Speed 2, for example, the fact the finished rail line will get people from Manchester to London an hour quicker is unlikely to sway their feelings about the project.

Such groups need to be sold additional benefits to them and their communities – perhaps jobs for local people, new amenities, environmental wins or lifestyle benefits. Essentially this comes back to the social value model drawn up by the government.

Of course, local opposition has always existed to major construction projects, but in an age where budgets are extremely stretched following a pandemic, where patience is thin and where the UK has committed to slashing its carbon output, the stakes are raised.

Just look at the drawn-out legal wrangle Heathrow has found itself in trying to get its third runway approved. The Court of Appeal in 2020 ruled that a green light given by then transport secretary Chris Grayling in 2018 was unlawful as it failed to take into account the 2015 Paris Agreement on Climate Change.

Although the Supreme Court eventually overturned the Court of Appeal decision, when Heathrow does wish to pick the scheme back up again in the coming years it still has to go through a full planning process and have its application assessed against updated emissions targets.

Campaigners have pledged to continue to fight the scheme and it is clear that a major PR battle lies ahead for Heathrow if it does decide to resuscitate expansion – one where social value is likely to play a key role.

So, if clients increasingly see the need and benefit of understanding social value, it is no surprise that the consultancies who advise them are quickly building expertise in this area. Being left behind on this topic would not be a smart business move for any company in the sector.

We expect to see a growing surge of senior roles coming up at consultants and others that are focused on capturing the added benefits of infrastructure projects to society.

To succeed in these positions, individuals will of course need to understand both the industry and the wider context it exists in, instinctively knowing what matters to the communities in which they operate.

As such a new and fast-growing area, it is likely that many people will rise quickly from within consultancies after demonstrating an aptitude and interest in social value, while others may be recruited from clients or other parts of the sector. Economic development and sustainability teams are possibly good places to start looking for the skills required.

If you work within the industry and believe you have what it takes to lead a consultancy’s social value function, this could be a very fruitful career path to start exploring. 

What are some examples of your companies’ social value offering on recent major infrastructure projects?