Apparently, as it is moving up the agenda for both central and local government. This could be good news for small to medium size contractors – and now is the time to get  prepared.

The Government wants to change its procurement rules so that those awarding contracts can take account of the value that companies and their services add to society. Cabinet Office Minister David Lidington launched a consultation on what the rules should be in March this year which ran until mid-June.

The new procurement rules will apply to projects procured by central Government departments and some public bodies, while social value is creeping up the agenda for local authorities too. The Public Services (Social Value) Act 2012 introduced the concept for service contracts, encouraging those awarding contracts to consider how the company, product, or service might improve the economic, social and environmental well-being of an area.

In addition to the Act, there are two interlinked factors driving this change. First, local authorities will be awarding more contracts as the Government changed the rules on council borrowing late last year to encourage them to help countering housing shortages by building more social housing, New figures from the National Housing Federation suggest that we need to build 340,000 homes a year until 2031, rather than the current output of 140,000. Second, funding to local authorities from central Government continues to fall and councils must extract every ounce of value possible from every source.

Contractors may have noticed some changes when tendering for work, such as more questions relating to training and apprentices. However, as there are more elements to social value than just training and skills, we are likely to see a broader scope of social value issues needing to be addressed in coming years.

What is social value?

There’s a lot of jargon attached to social value, yet put simply, it is the positive impact that a company, its employees and activities have on residents, businesses and others. This could be related to jobs and economic growth, health, wellbeing and the environment or in strengthening the community.

Many councils now have social value polices, although some are more well defined than others. When it comes to awarding construction contracts, some look at a company’s social value creation only as a differentiator, while others award a proportion of their tender points on social value issues. The most recent research on this, by Social Enterprise UK, in 2016 found that a third of local authorities were considering social value in their procurement processes to some extent.

A weighting is applied to social value during tender assessments of generally 5% to 10% according to the UK Green Building Council, who in March this year published important new guidance on this subject: Driving social value in new development: Options for local authorities. However, some go further: Manchester City Council, for instance, awards 20% of its marks when assessing bids on social value issues.

Generally, councils that are switched onto social value will be looking for positive impacts that are linked to the project that they are awarding. The good news for local firms is that all the social value they are likely to be creating will be centred on the area in which they operate.

New procurement rules

The Government’s proposed new procurement rules introduce five themes which they think should be covered when considering social value in awarding contracts. These are: diverse supply chains; skills and employment; inclusion, mental health and wellbeing; environmental sustainability; and safe supply chains.

Most of these themes are similar to those already considered by forward-thinking local authorities, although there are one or two newer ideas. Under the ‘inclusion’ banner, the Government will look to increase opportunities for businesses that can demonstrate gender pay balance, or that employ people with disabilities or that are led by people from ethnic minorities. ‘Safe supply chains’ covers modern slavery and cyber security which may not yet be on the agenda for most local authorities.

Another positive drive among the new rules is that they aim to encourage the inclusion of small and medium-sized enterprises (SMEs) in supply chains for central Government projects. Even if central Government projects are not on a company’s radar, our advice would be to look at these proposed changes since they are an indicator of changes others will make. Sooner or later, questions on social value will appear in a tender document – if they haven’t already.

Know your value

It’s likely that small and medium-sized employers are already delivering significant additional value to the communities in which they operate, so it’s important not to be put off by the terminology used when looking to record and report on them when requested by local authorities and councils.

For instance, a company may have bought shirts for a local football club. This could be an example of helping to improve health and wellbeing while supporting the local community. Alternatively,  staff may have volunteered to work with the community – for example, by helping to repair the roof of a local village hall.

A contractor is also very likely to be increasing people’s skill levels and employability in its day-to-day business. This doesn’t just refer to apprenticeships. It could be sending people on specialist courses or giving a colleague time to train online to develop their excel skills or how to use a new payroll or accounts system.

It doesn’t stop there, social value is not just displayed in how a contractor supports charity or training, it’s also through recruitment – they may be employing people who were previously out of work, or ex-military personnel or someone with learning difficulties.

When bidding for new work, it’s also important to think about how future activities could be relevant for that project. Charity work and fund raising could be linked to the project or job that they are bidding for, or recruitment could be targeted within the area very local to the project.

Recording these things can be an additional administrative burden, for firms both large and small. Large companies may have the benefit of teams of people who can contribute to their social value; yet it can be easier for a small firm to demonstrate that its activities are relevant to a particular project because it already employs local people, buys materials locally and gets involved with local charities.

Good news

Given that many companies are already adding social value to their communities, this is good news for both small and large contractors. By considering social value when awarding contracts, councils can take account of the fact that companies are bringing benefits beyond installations and builds. It seems right that they should be rewarded with more work, leading to greater financial stability and hence more value locally.

This is a developing area, and we will see changes to how social value is defined and measured over coming years, and what clients ask for in tenders. By considering and recording their contributions to the local community and economy now - contractors will put themselves in a stronger position to make it onto tender shortlists and win more work in the future. Now is a good time for businesses, whether big or small, to prepare.

Sad sign of the times when we go on site to be told "Don't mention the lead" in a case study because of the sensitivity to theft.

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An article in the Financial Times suggested that the UK construction industry was approaching its ‘Uber moment’. The reason? The use of offsite production to slash programmes and cost.

For those of us with long memories it’s easy to be cynical. We’ve heard this before. Remember Deputy Prime Minister John Prescott’s Design for Manufacture competition back in 2005, which asked for solutions to provide better quality homes for a cost of £60,000 each?

But thirteen years on, it’s a different world. Digital design – BIM, if you like – is forcing a change in the way designers and specialists interact, major investors such as Legal & General are putting money into offsite, and central Government has promised to favour offsite on some publicly-funded projects from next year.

Consultant Arcadis reckons the offsite sector could double in size between now and 2020 to £2.8bn a year. However, many of the barriers that have prevented the oft-predicted offsite boom for the last 20 years, still prevail.

One of the biggest hurdles is the size of offsite manufacturing specialists. There are only seven modular fabricators of any size in the UK, with balance sheets that are too small for many clients to risk. They are a potentially weak link in a project’s main supply chain.

In a chicken-and-egg scenario, offsite suppliers can’t get bigger without a good pipeline of projects ahead of them. Only with this can they attract the investment they need to expand.

The Government’s announcement this time last year could help with that. Five departments – Transport, Health, Education, Justice and Defence – will adopt a presumption in favour of offsite construction by 2019 across ‘suitable capital projects where it represents best value for money’.

In the meantime, some housing developers – such as the one that inspired the FT article – are already ploughing ahead with offsite. Experts suggest that more growth in the residential sector could pump-prime the offsite industry so that it can supply other sectors too.

Offsite doesn’t have to mean modular, though. It can also be a systems approach to design and construction, where buildings are bespoke, but designed from a kit of parts.

Either version of offsite will require some serious overhauls to the construction process, from planning through procurement, design and delivery. Current contractual arrangements won’t fit the bill.

The interesting thing is that main contractors won’t be part of the picture. Instead clients will be contracting directly with alliances of suppliers, with an integrator to orchestrate delivery. A main contractor could in theory be an integrator, but it would require new skills and a totally new business model.

Does that constitute an Uber moment? Well, yes, it probably does.

One of us was recently briefed by their teenager on the James Charles situation. (For those of you that don’t know, Charles is a beauty vlogger who haemorrhaged followers after a show of disloyalty to an older mentor). Said teen was one of the millions to unfollow Charles on Instagram.

Typical Generation Z, we might think. Into influencers, integrity. But we’re not so sure it’s about the demographics…

Shortly after this conversation, we got another lesson in social media-driven transparency at an industry event. The CEO of a large company (not a client) was giving an opening speech while behind him ran a rather beautiful yet utopian video demonstrating his firm’s various construction projects

The problem was that this was an extremely well-informed audience. Everybody there knew perfectly well that the perfect project is a rare beast indeed. Some of them had even been to the sites we saw before us on screen, they had seen the challenges and issues first-hand, they had provided solutions and advice. They didn’t appreciate this squeaky-clean version of events.

And so, as the CEO was speaking, a rather less-than-perfect photo of one of the featured sites was circulating on a WhatsApp group, complete with witty caption. The CEO, like James Charles, lost part of his audience as the photo spread between WhatsApp groups.

There are a few morals to this story.

First, know your audience. A bit of gloss is good to attract interest and raise profile among a general audience, but don’t expect it to impress those at the sharp end. Second, marketeers can’t invent a brand that doesn’t fit reality because, with the magic of social media, the truth will find you out. And third, it’s not just Generation Z that cares about truth and honesty too – it’s just that us older generations are now also making the most of our social media tools.

We love projects like this one. These 100-year-old bricks have just been laid for the second time in their lives in a great project that combines a heritage building with new-build. These projects require more capital investment, yet by restoring and reviving old buildings, how much more value do they – and we – add to communities and urban environments?

 

 

 

 

 

 

 

 

 

 Although one might foolishly be tempted to take some tiny crumb of comfort from the fact that the numbers of construction deaths resulting from falls from height has reduced ever-so slightly in the past few years, the latest report from the All Party Parliamentary Group on Working at Height still makes for grim reading.

As result, it’s imperative that the sector redoubles its safety training efforts to ensure that all its workers can be confident of coming home in one piece at the end of the day. The onus falls on all of us – in our case, an agency that finds itself on scaffolds and ladders conducting interviews or overseeing photography – to ensure the highest standards are maintained and properly communicated to those at risk.

If you drill into the RIDDOR (Reporting of Injuries, Diseases and Dangerous Occurrences Regulations) numbers, one shocking finding is how disproportionately older workers figure among the casualties. Incredibly, 35% of fatalities are over 60 – including a number of 70-year olds. When you drop the bar to 45+, older workers comprise 64% of the deaths.

At risk of inferring too much from this, it might be thought that we are suffering from a legacy issue – whereby workers came into construction in the days before training, tickets and the higher health and safety consciousness we have today. A 55-year old site worker now, for example, would have entered the industry at a time when even hard hats weren’t commonplace.

So while we shouldn’t take the inculcation of youngsters and apprentices into the best, safest practices for granted, we must be mindful that learning is a lifelong process and place additional emphasis on increasing safety awareness among those already well established in the ranks.

We had our own mea culpa over taking things for granted in this respect when it came to our business insurances renewal. Reading the small print (probably for the first time, to be honest), we noticed that not only we were not covered for work involving scaffolds and ladders – see above – it was specifically excluded.

And then trying to obtain that cover provided a chore as our broker struggled to communicate to insurers why we needed it and they didn’t have a category in which we conveniently sat. Lots of ringing around etc

Having cracked that - and thus with a heightened (no pun) awareness of the issue - we also recognised that learning should be a lifelong process for the, essentially senior, team: we then set about identifying a suitable training module covering working at height. Why it hadn’t occurred to us before is slightly shaming when, for instance, we all own PPE for just those tasks.

It goes to show that enjoying a safe place of work concerns us all, and we should work together to make sites resemble the ordinary places of work enjoyed by much of the population as a whole; and less like the casualty departments they can be.