9 March 2016 | Herpreet Kaur Grewal
Making social benefits through service delivery has for a long time been traditionally left to the third sector.
But since the Social Value Act came into force in 2013, the public sector has had to consider it too.
The act requires all public bodies in England and Wales, including local authorities, to consider how the services they commission and procure might improve the economic, social and environmental wellbeing of the area.
This change has not happened overnight and is not likely to. Lord Young’s review of the legislation last year found that “growing awareness among public bodies, the incorporation of social value in actual procurements appears to be relatively low when considered against the number and value of procurements across the whole public sector”.
Although the act does apply to the public sector, private companies are also starting to take an interest in how they can deliver social benefits through their contracts. Support services company Interserve is one of those. The business is developing a social mapping tool that would help it more accurately measure the impact it is having and it has been annually holding a ‘Social Value Summit’ since 2013.
Consultancy firm Acclaro Advisory states that given this flurry of activity, there is much scope for the facilities management industry to be involved in this agenda. In a report it launched last month, Realising Social Value Within Facilities Management, it stated that social goals must be “clearly stated and incorporated into the FM contract”.
What does this mean?
The researchers define it as a way to create social benefits that go beyond “CSR business as usual” policies. It states that project commissioners suggested that social value requirements should be made explicit in the project contract to ensure they are concretely delivered. This may mean pointedly targeting youth unemployment through apprenticeships, partnerships with charities and social enterprises or paying a living wage.
The Acclaro research is based on interviews with 27 FM providers including Engie, ISS, Skanska and others, and local councils as well as a literature review and an online survey.
The researchers argue that facilities management, which is particularly “accustomed to operation in financially restricted conditions, instinctively monetises benefits of all forms, and lacks confidence in using other indicators of value with their clients” and as a result where social value may be being created, it is rarely tracked effectively and requirements remain vague.
The report points out the need to take “best practice” from FM companies already making voluntary public commitments. For instance, Engie’s co-founding of a Community Interest Company that works on the Queen Elizabeth Olympic Park.
Antonia Swinson, chief executive of the non-profit Ethical Property Foundation, told FM World: “This report shows there is a real opportunity for the facilities management industry to put social value clauses into their contracts. Other sectors – such as construction – have been working on this for a long time. FM has the chance to be flexible as it covers so many areas of skills, that social value could fit in in many places – for instance, apprenticeships could be designed specifically with social goals in mind.”
Charlie Wigglesworth, director of business and enterprise at UK body for social enterprise, Social Enterprise UK (SEUK), says facilities management bodies are much more interested in social value since the act came into force.
He says: “Companies working in facilities management are keen to explore how they can both deliver and report on the social value they are creating in communities at a local level, and more broadly too.
“As a service industry with large client bases in the public and private sectors, and as major employers with long and diverse supply chains, FM providers are rightly seen by many of SEUK’s partners (public and corporate) as having considerable scope to deliver social value outcomes.
“The Acclaro report is further evidence of the seriousness with which the FM sector is taking the requirements of the Social Value Act and their understanding of the critical role they play in ensuring that it is being delivered.”
Wigglesworth adds: “As austerity really begins to bite, commissioners and those responsible for procurement are looking to get as much value as they can for every £1 they spend.
Providers who are up to speed on social value and can prove that they’re making a positive difference on the ground are the ones to watch.”
Despite this surge in interest from the industry, the report asserts that there is a general agreement among FM providers and their clients that social value is not well understood by project commissioners in terms of what the FM sector can offer.
It recommends the creation of good practice case studies with practical solutions and to create a pragmatic communications tool for use by FM providers and project commissioners to “change the language” of how social value is discussed.
Measuring the effects
There also need to be clear measurement criteria, but this depends on the individual factors in each contract. The report recommends drawing lessons from construction and the third sector, which have already developed their own criteria for social value goals. It came up with a “preliminary framework structure” (see the diagram above), which revolves around employment, education and up-skilling as the way social value can be enacted.
Stakeholders will have to be actively involved, however, to ensure that they are engaged in all three areas
Three years ago, Interserve introduced a service delivery framework through which it sought to measure its own sustainability performance. As well as traditional finance terms, the service provider identified four additional measures including ‘social capital’ – the health and wellbeing of employees and the community. The words of group finance director Tim Haywood resonate today.
“The place of a company within the community and with its partners is critical to its future.”
A laudable intention – but how can its efforts locally be measured? The subsequent passing of the Social Value Act has put the issue of local community impact firmly on the agenda. But the problems of 2013 – the nearly impossible task of measuring social value and comparing it – remain. Service providers and clients alike want measures that are auditable, traceable and capable of being externally validated – and that’s the difficulty.
In the absence of contractual requirements, it is up to the FM provider to decide what social value is delivered.
Acclaro’s report identifies some positive developments on the part of service providers, but they’re mainly voluntary; contractors looking to ensure 5 per cent of all employees are apprentices, graduates or sponsored students, for example. Or have membership of other local and national schemes. But these vary as to the contractor’s own preference, and represent no transferable measurement template to which the wider sector can adhere.