It’s time to stop talking about the cost of social value and start talking about the added value

I spend a lot of time thinking and talking about social value. A question that often comes up is: ‘What’s the cost?’ This is the wrong question.

Social value is a broader understanding of value. It’s about companies moving from a focus on the single bottom line (profit) to the triple bottom line (people, planet, profit). It’s limiting to see it as an additional ‘cost’. Making this shift is, I believe, the intention behind the various regulations and policy approaches on this topic.

Covering England and Wales is the much discussed Procurement Policy Note 06/20 – taking account of social value in the award of central government contracts. The intention is to deliver social value through the government’s commercial activities. Many local authorities have built on this, aligning the awarding of contracts where social value is part of the bid process and doing so in a way that meets local requirements. Sometimes this is done by providing a financial value to specific activities, other times it is much broader and there’s an expectation that bids will be developed in line with local priorities such as local employment.

Underlining this is the more substantive question: ‘What does social value look like for us and how does it change how we do business?’

This is about doing good business and doing business in a way that adds value. There’s an expectation that all businesses consider the ‘value’ they can add, whether it be at the local level or more generally, and there’s a strong business case for doing so – in bids, for the business, and for communities.

What we need is a shift in the conversation from cost to value-add. The specifics of the questions and potential activities will look different across different business activities. Activities falling under the purview of PPN 06/20 are likely to focus on the local. Businesses should also be thinking about social value more broadly.

We need to change the questions that are asked, and the questions will vary by sector and activity. In the case of a real estate development scheme, better questions for businesses are:

·        How can we support the workforce of the future? This is important given the significant skills gap across construction.

·        How can we engage with local SMEs as part of our supply chain? This can require a more nuanced approach to engaging with supply chains.

·        How could we add value to local businesses?

·        How are we engaging with the local community in a meaningful way? Yes, this is a planning requirement, but engaging in a meaningful way requires more than meeting basic requirements. It’s about ongoing conversations, listening and providing feedback and ensuring that the approach is one that it can engage a wide proportion of the community. For instance, public consultations should be held in places that are accessible and at times that work for people.

·        What does social value mean for your staff and customers? This will be specific to the business but could include a whole host of activities such as raising money for charities, engaging with schools and colleges and so on.

·        What does ‘good’ look like at asset level and at business level? Again, this will be company specific.

There’s a clear business case to be made for social value in shifting to a triple bottom line – it’s good for business, it’s good for communities, it’s good for the planet and it can add real value.