Is it time to rethink social value?
This post on social value was originally written as a Spotlight for Future of London, a not-for-profit network organisation for built environment practitioners
Building on the foundations of the 2012 Social Value Act and the shift towards good/inclusive growth approaches in London, social value has commonly been used as the mechanism for defining and measuring the positive social impact of regeneration schemes.
The focus of social value has been on the relationship between developments and existing, often deprived, communities. This has largely been underpinned by top-down assumptions that a growing economy will create economic and social benefit for these communities, but often these assumptions are place-agnostic and have little understanding of the specific needs or context of a local area.
Nevertheless, the ability to capture and monetise the benefit created, or ‘value’, is at the heart of the way social value has been used in the built environment, particularly within public sector procurement for major regeneration schemes.
Social value isn’t working
Whilst the term has been updated and re-moulded over time, ironically the growing importance of social value (for example through higher weightings in procurement processes) has led to increased standardisation. Approaches have become more formulaic and the reliance on a tight list of pre-defined, monetisable metrics as a proxy for social impact has become more convenient.
This means that the vast majority of social value delivery has been limited to activities which are output driven and disconnected from the local people they’re intending to serve.
The built environment sector has also underperformed in the actual delivery of social value activity. Developers are still generally housebuilders first and placemakers a distant second, yet they are increasingly being asked to take on the delivery of activities outside of their traditional remit.
The limited resources available to the public sector to engage with these processes and to hold developers to account has led to inefficient use of resources, unrealised impact and failure of investors to realise their ESG objectives. Instead, social value is widely used for PR and promotion through marketing campaigns, with little scrutiny of what was promised versus what has actually been delivered.
Why we need to get it right
The justification for a social value approach is more important than ever before. The combined effect of Brexit, the pandemic and now the war in Ukraine are contributing to a cost-of-living crisis that has made the experience of poverty and inequality in London more acute and complex.
At the same time, public-sector resources have been so stretched that we’re increasingly seeing the responsibility for delivering basic social services shift to the private sector and civil society through mechanisms such as Section 106 and social value.
Communities themselves are now also, quite rightly, expecting more practical outcomes and activities from social value. As processes like co-design and participatory budgeting become more common, pre-defined social value metrics are no longer good enough and are becoming less relevant.
Regeneration and placemaking must fundamentally be about making places better for people. This means doing much better when it comes to delivering a positive social impact, especially how we define and redistribute the benefits from development. However, social value has become so intrinsically linked to output measurement and monetisation, many in the industry are arguing for a new approach.
It’s time to refocus on the real, measurable benefits to the local population
We need to move away from a short-term, top-down approach, and towards generating local benefits which deliver long-term outcomes for individuals and communities.
The alternative is to ask what outcomes people and communities actually want to see, to incorporate their own experiences and perspectives, increase the weighting of qualitative outcomes and wrap up data in narratives that show, holistically, how the pieces fit together.—Steve Taylor, The Developer, 2021
Related Argent have embraced this new approach at their latest development in Brent Cross Town. Working closely with the LB Barnet and alongside the University of Manchester, PRD and State of Life, they’re developing a bespoke approach to measuring the outcomes and impact of the whole scheme across design, construction and operation. This approach prioritises long-term community wellbeing. And it seeks to understand local people’s wellbeing before, during and after the development in order to be able to actually demonstrate a positive impact on their quality of life.
What are the hallmarks of a good approach?
This is how you successfully deliver local benefit and a genuine long-term legacy.
1. Develop bespoke, bottom-up strategies.
Understand and respond to the challenges and opportunities that are specific to the place and its communities.
This requires early research to develop a baseline of local characteristics, which can then inform a local benefit strategy. This baseline can be built from secondary quantitative data alongside insight from engagement with local stakeholders.
Develop interventions that respond directly to the evidence and co-design them with local communities, so they target those who need them the most.
2. Understand success as impact on long-term wellbeing outcomes.
Shifting focus from short-term outputs to long-term wellbeing outcomes means that you can capture the most fundamental elements of individual and community life: happiness, feeling worthwhile, relationships, and mental and physical health.
The HM Treasury Green Book now puts the welfare and wellbeing of the population at the heart of the assessment of social value, and explicitly states that this should appraise both the benefits and costs to society.
This doesn’t mean you lose robustness or the ability to value your impact. The Green Book uses WELLBY (Wellbeing-adjusted Life Year) outcomes which provide an open and transparent valuation method, aligned to the approach used by the NHS to judge the cost effectiveness of health interventions (NHS Quality Adjusted Life Year measurements).
3. Empower local people and organisations to play a bigger role in delivering the interventions.
Understand the existing landscape of stakeholders and build on the strengths (skills, assets and organisations) that already exist in a local area. By involving local people from the outset, and listening and collaborating throughout the lifetime of the scheme, local communities will have a greater stake in the impact delivered.
4. Gather good evidence.
Be clear from the outset on the outcomes you want to achieve and, crucially, make sure that you can evidence that you have actually achieved what you set out to do. Collecting high quality evidence will help clearly demonstrate how the intervention delivered an improvement in long-term outcomes for beneficiaries.
This requires real-time evidence collection on an ongoing basis, and continuous reflection and flexibility to focus on what interventions are working. There are innovative examples of how this can be done in partnership with the local community, such as the Institute of Global Prosperity’s Citizen Science programmes in East London and at Euston.
Adopting this new approach requires a pivot in thinking and action. To deliver long-term outcomes that have an impact requires time, financial investment, building trust, greater transparency and a genuine desire to reflect and adapt. This isn’t a quick or easy solution. But it is achievable given the growing resource and capacity dedicated to developing social value approaches, and doing it properly will achieve far more than social value ever has.
By Rosa Sulley
Further Resources on Wellbeing
What Works Wellbeing Centre: https://whatworkswellbeing.org/
HM Treasury Wellbeing Guidance: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1005388/Wellbeing_guidance_for_appraisal_-_supplementary_Green_Book_guidance.pdf
State of Life Blog on Wellbeing Measurement: https://www.stateoflife.org/news-blog
Citizen Science and prosperity: https://static1.squarespace.com/static/5a0c05169f07f51c64a336a2/t/5ce2d14014a132000171bcf1/1558368584590/LPI_Report_single.pdf