Social value in construction is the benefits that a project brings to society. From employment to housing, there are many key benefits that come from construction that constitute as social value.
In recent years, the construction industry has had its share of backlash regarding its environmental and social impact as a whole.
The Public Services Social Value Act 2012 requires the public sector to consider ways to secure social, economic, and environmental benefits as part of their procurement process. Effective social value provides great outcomes for local communities by:
- Creating jobs
- Better education
- More training opportunities for apprentices
- Improved sustainability
The bottom line is that social value in construction is really about how a community is improved through a construction project, as well as how the residents will benefit from the work that’s being done in the short and long term.
Social Value in Construction
There are several key aspects of providing social value in construction. From improving the economy to apprenticeship programmes and local employment, construction schemes and projects can have a positive impact on our community.
Boosting the Economy
Construction projects can provide social value by improving the local economy. Construction projects prioritising social value through their work often create more jobs for those in the local community, including both full-time employment and apprenticeships.
Ultimately, this helps reduce unemployment rates across the country, which contributes towards the economy.
Eight out of nine sectors within the construction industry in the UK have experienced growth in May 2024, meaning more jobs are becoming available and the economy can continue to be supported.
The construction sector’s links with other sectors can stimulate growth in other industries too. Value added through these links could account for 55% of the value of construction purchases of services and materials.
Reducing Crime Rates
The construction sector can contribute to lowering crime rates and reduced unemployment, which creates significant social value for communities.
Whether it’s by creating job opportunities for ex-offenders or improving community areas, the construction sector generates value that has helped many people across the UK.
Someone’s criminal record can prevent them from working in certain job roles. However, employment has shown a promising way to reduce reoffending.
Regarding employment and lowering crime rates, apprenticeships offer young people a great opportunity to kickstart their career in construction. Taking on more apprenticeships would help get kids off the streets and into work.
621,000 individuals aged 19 onwards did an apprenticeship between 2022-2023 – an increase of 1.2% from the year before. This shows that the younger generation is willing to learn new skills and improve their future.
Training & Employment
It’s common for construction companies prioritising social value to offer training and employment and volunteering opportunities to the local community.
This often includes employment for members of society who are struggling to find work – such as veterans or ex-offenders. As part of many social value initiatives in construction, both training programmes and apprenticeships are provided.
Effectively, this means that there are more chances for training and employment throughout their supply chain. In the construction industry alone, there are over 90 types of apprenticeships available to consider.
Affordable Housing
Affordable housing is a cornerstone for the new Labour Government. By increasing the housing supply, it aims to address the housing crisis while simultaneously generating significant social value.
As of April 2024, average house prices in England have increased by 0.6%. For many, this is alarming. The construction industry plays an important role when it comes to housing and how to make it more affordable – especially for people with lower incomes.
Community engagement allows the construction industry to hone in on housing needs, which can help tackle housing solutions in upcoming projects.
Environmental Impact of Construction
Construction projects can rapidly deliver tangible benefits to communities; however, some social value initiatives can take longer to demonstrate their impact. Social value in construction can provide long-term, environmental benefits to communities.
Opting for sustainable materials, or simply improving insulation in homes are just two examples of how sustainable construction can better the environment. It’s well-known that the construction industry is a huge source of air pollution, especially in city environments.
In London alone, construction contributes 30% to the matter. The government have set for all UK emissions to reach net zero by 2050 – the construction sector needs to make efforts to reduce and reuse where possible in attempts to help reach these targets.
At Compliance Chain, you can track environmental impact and set measures and proxy values for decarbonisation, fleet emissions, sustainability, and supply chain monitoring.
Why is Social Value Important in The Construction Industry?
In the construction industry, social value is recognised as helping construction companies build strong relationships with the communities they’re working in.
Engaging charities, community organisations and NPOs demonstrates the lasting impact and change construction projects can have on a community.
This not only enhances a company’s reputation but also attracts and retains top talent who are increasingly drawn to organisations with a strong social conscience.
However, the benefits of social value extend far beyond community relations and employee satisfaction. Let’s explore some additional reasons why it’s crucial for the construction industry.
Return on Investment
Considering – and actively working on – social value can ultimately improve your return on investment (ROI).
When you demonstrate the positive impact that your construction projects have on the wider community and the environment, you may gain a competitive edge. This focus on social value can set you apart from competition.
Through Compliance Chain, you can track and measure the social value generated by your construction projects.
You will gain deeper insights into your return on investment beyond just financial metrics, encompassing environmental, employment, well-being, responsibility and improvement in business standing.
By effectively demonstrating your project’s positive influence, you can significantly enhance your bid success rate and solidify your reputation as a socially responsible organisation.
Lasting Impact
Social value in construction can have a lasting impact on communities. By creating local employment opportunities, more people can continue to learn new skills and contribute towards long-term economic growth.
Construction projects that improve parks, community centres, and other community spaces can help improve the quality of life for the residents in the area – creating a lasting impact and bringing residents closer.
Compliance With Regulations
As mentioned, the Social Value Act 2012 mandates that public sector organisations consider social, economic, and environmental factors throughout their procurement processes – however, a lot of time has passed since then.
The introduction of the Social Value Model in December 2020 marked a significant shift in public procurement. The mandatory 10% weighting for social value in all procurement activity from 2021 onwards has elevated its importance in the construction industry.
To succeed in tendering, contractors must now quantify and demonstrate their social impact.
Compliance Chain empowers contractors to accurately measure and manage their social value, enabling them to craft compelling bids that showcase their commitment to positive change.
By highlighting your successful projects, contractors can differentiate themselves and increase their chances of winning contracts.
Potential Challenges With Social Value in Construction
Implementing social value within construction projects presents several challenges. Measuring the intangible benefits of community engagement, balancing social goals with project deadlines, and ensuring consistent data collection can be complex.
Additionally, the dynamic nature of construction sites often requires adaptability and flexibility in social value initiatives. Overcoming these obstacles is essential for maximising the positive impact of projects.
Social Value Can be Difficult to Measure
Currently, there’s no standardised database or system that collects social value data in construction. However, the Royal Institute of British Architects (RIBA) has developed a social value toolkit to help architects demonstrate the social impact on communities.
Compliance Chain helps you to measure, monitor, and deliver social value for construction projects. You can track delivery against national measures and apply monetary values to social value activities delivered across your upcoming projects.
Lack of Communication
In many cases, there are problems with coordination between both central organisations and project organisations when it comes to implementing social value initiatives in construction projects.
Many construction companies need to do better when communicating social value initiatives – this includes making local communities aware of improvements made across the area.
Increased Demand for Social Value Managers
Social value is becoming increasingly important. In many cases, social value requirements can be complex – meaning there’s a need for experienced or highly skilled workers.
With a demand to focus on the social value aspects of construction projects, more employees, especially managers, are required.
However, the issue of a lack of employees and managers in social value is being addressed with more role openings for specific positions – such as social procurement professionals and employment requirement professionals.
The Levelling Up Fund (LUF) can support social value initiatives, allowing for more social value managers, as well as other various roles in construction. The fund addresses the need for regional improvements, and hones in on social value through different projects.
Short Term Outlooks
Short-term shareholder value primarily focuses on immediate financial results. In many cases, this can cause quick decisions that cut costs over sustainable practices. It can be tough for some construction firms to justify certain social value initiatives.
Many stakeholders expect fast results, but this isn’t always the case when it comes to social value – results can often take time.
Most social value efforts concentrate on the building stage, but it’s important to remember the significance of the other stages – including the steps of pre-construction and design.
In comparison, long-term investments consider environmental and social factors throughout the entire process. These investments aim for sustainable value and returns.
With The Procurement Act 2023, procurement has to take into consideration factors other than price – such as social value efforts. It is more important than ever to ensure an efficient social value strategy is in place to win tenders and work opportunities in the near future.
Boost Social Value in Your Construction Projects With Compliance Chain
At Compliance Chain, we offer innovative social value software that allows you to set, track, and measure your construction project’s social value. You’ll be able to create social value targets and track delivery against social measures.
We aim to transform the way you manage your social value, offering a modern software solution that lets you seamlessly create tailored and customisable reports that convey all the information you want.
Our software provides a simple way to transform your social value data into easy-to-understand visuals which you can later present if needed.
To learn more about our social value management solution, we encourage you to get in touch. We look forward to hearing from you soon.
With 12 years experience in Social Value, Lizz Lee focuses on the development, user experience and processes featured within Compliance Chain to ensure Social Value Planning, Programming, Capture and Comprehensive Case Study reporting is easy for all users.
