Less than 1 per cent of social value created by construction firms comes via carbon reduction measures, figures shared with Construction News indicate.
Data from construction software provider Compliance Chain shows that more than 98 per cent of the £6.8bn social value created through its frameworks comes from easy-to-achieve measures relating to local employment and supply chain spend.
Robbie Blackhurst, founder and director at Black Capital Group, which owns procurement group Procure Partnerships and Compliance Chain, told Construction News the metric now needs urgent updates to push the sector’s key environmental and social targets to the top of the agenda, calling the current social value metric “flawed”.
Blackhurst argued that metrics including hiring local employees and subcontractors were almost a given within the construction industry, and should not contribute to a firm’s social value score.
He said: “The current measures tend to favour social value activities that are already common, like local employment and local supply chain spend.”
Compliance Chain uses an alternative to the Themes, Outcomes and Measures (TOMs) social value system. Their database is calculated using data from public databases including the Office of National Statistics, the Unit Cost Database and HM Treasury’s Green Book.
The TOMs system was developed by the national Social Value Taskforce in response to the Public Services (Social Value) Act 2012, and is widely used by public sector clients. But it is is not free to access.
The system was designed to get firms that commission public work to consider how they can best secure wider social, economic and environmental benefits within their work.
The social value data shared by Black Capital Group with CN covers 646 jobs with a combined contract value of £6.8bn – including a social value of £793.6m.
At £617m, responsible business metrics make up 78 per cent of the social value created, with £608m of that coming from spending with the local supply chain.
Employability metrics account for 20 per cent of the total, at £160m, of which £159m comes from employing local subcontractors and local staff.
Meanwhile, environmental social value accounted for £2.8m of the full £793.6m (0.3 per cent) – leading a number of firms to call for a complete revamp of what social value entails.
Oliver Kempton, partner at social value consultancy Envoy Partnership, agreed that social value measurement focuses “too frequently […] on how organisations spend their money”, for instance on who they employ and the supply chain they work with.
“If public bodies really want to understand how their procurement is creating social value, then they need to focus on how organisations impact both the environment and the wellbeing of the communities in which they operate,” he added.
“This will involve incorporating the voice of stakeholders in those communities, embedding environmental metrics, and being clear on how their activities create outcomes for their communities.”
Blackhurst called for environmental goals to be stripped from the social value metric to give it its own focus elsewhere, as social value managers “generally do not oversee environmental targets”.
“Creating this distinction will ensure that both social and environmental objectives receive the dedicated attention they need,” he added.
The social value revamp should be led by an official governing body that would work with government and sector leaders to set up a standardised set of social value metrics.
His comments were echoed by Kingsley Clarke, framework operations manager (South West lot) at framework provider SCF.
He said: “The environment is massively important to the construction industry. We need to be thinking about embodied carbon, and the default being carbon-zero buildings.
“However, I think that needs to be separated from what many consider social value, such as local employment, local economy, education, reoffending.
“I agree more focus on environmental considerations is key, but for most tier one contractors there are very different people who look at social value and environmental issues.”
Precious Zumbika-Lwanga, founder of procurement consultancy Carus Advisory Services, agreed that social value measures should be better aligned to the environment.
But she argued that the current system should move towards a system of guidelines, allowing each procuring organisation greater flexibility to choose the metrics that are most relevant to their needs.
She said: “Standardisation, while good, will certainly create a platform to benchmark, drive efficiency in reporting and an informed approach to the allocation of funds but we cannot ignore the risk of oversimplification and even worse tick-boxing.”
Last year, CN reported that apprentice requirements imposed by local authorities on contractors were backfiring – leaving some trainees out of work and firms out of pocket.