Why is ‘social value’ key to public procurement frameworks?

With the Procurement Act 2023 coming into force in just a few months’ time (24 February 2025) there will be a new focus on delivering social value through construction projects.

All public sector clients will be required to formally consider “public benefit” (this has never been a general public procurement requirement before in England), which for architects will translate as identifiable social value outcomes.

Any practice that has perhaps seen itself as having a loosely defined “social purpose” will now need to be aware of the considerable amount of work that has been done in developing resources for social value measurement, which will become much more of a feature of the public sector tendering process.

But what does social value in the procurement process mean, and look like?

Social value isn’t hugely well defined, and several definitions exist. For organisations like HACT, social value is about impact. It is a way to quantify and value how different interventions affect people’s lives – on their wellbeing and their quality of life.

It is different from social purpose, which is what an organisation is trying to achieve, why it exists and how it contributes to society.  Social value is what you do and provides a way to value the impact of an organisation’s purpose.

'For HACT, for housing associations, and the wider public and non-profit sectors, we have not always had the tools to value our impact. We have relied on traditional financial measures to describe our value, which is only part of the story. Social value gives us a way to describe our impact and means we can build this into our decisions and investment,' says Andrew van Doorn OBE, HACT's Chief Executive.    

Why is social value needed?

There is a real weakness around social value evidence at the moment, Andrew says. To this end, HACT partners with organisations across the housing sector and beyond to create and drive value for residents and communities and has developed a series of social value banks.

The HACT pioneered the Wellbeing Valuation with its partners, global expert social value economist Simetrica-Jacobs. They first developed and launched the UK Social Value Bank in 2014, which comprises 88 measurable value outcomes all based on established evaluation methods aligned to Treasury Green Book, measuring social and environmental impacts through improvements to an individual’s wellbeing.

More recently HACT has developed the UK Built Environment Bank that measures the social impact of construction, development and supply chain activities.

The aim is to avoid the tendency to see social value as theoretical benefits that can emerge towards the late stages of a project and embed measured outcomes at the beginning of the procurement process – early design decisions should be informed by social valuation information. It also means that decision making is transparent and based on presentation of the potential social impact of different choices.

Community engagement is key and architects’ can be engaged in prescriptive outcomes at the outset. These can be valued and supported through early procurement stages so that the measurement and valuation is carried through projects into operations and communities beyond, explains Alex Lubbock, HACT's Director of Operations.

Social value requirements can be placed in contracts and become part of the performance management over the lifetime of that contract. Each requirement can be a golden thread of evaluation and monitoring as the project progresses. And in doing this, assurance becomes even more important, demonstrating that the social value that has been designed in, actually happens. It is clear that social value reporting will become as important as carbon and other ESG metrics.

HACT is really clear that if we are not delivering impact in our communities, and lives are not improved, we are not delivering social value. Procurement and design and both means to this, but it is what happens in reality that actually counts.

Read more about how architects can add social value to projects

What other resources are out there that can help?

Another tool recently developed to value real social impacts is MeasureUp, a free resource developed by three partners with a track record in the UK social value space (Impact Reporting, State of Life and PRD) to enable consultants to move beyond oversimplified social value measurement.

The platform draws together valuable public data, research and other helpful resources normally hidden behind paywalls to allow consultants to use what would have been proprietary data and methodologies free of charge.

“We want to help progress the social value agenda and help organisations move from merely counting outputs to measuring the true outcomes of their initiatives,” says Matt Haworth, co-founder of Impact Reporting and MeasureUp.

MeasureUp extends to cover the value of less conventional activities that could be particularly valuable for a particular community, such as attendance at religious activities, engaging in youth activities, or access to green spaces.

How can EDI be present in the supply chain?

LHC Procurement Group, meanwhile, has been pioneering procurement frameworks where the presence of an architect’s demonstrable commitment to equality, diversity and inclusivity (EDI) becomes part of the social value measurement of a project in its own right.

Its Architect Design Services (ADS1 and ADS1.1) framework for public sector projects in London, launched in May 2020, were the first to prioritise minoritised groups and female-led practices. It pioneered the idea that a project is delivering social value by having EDI in the supply chain.

It is a two-pronged approach to social value, explains Paul Smith, Regional Procurement Manager for Midlands, London and South East. Candidates’ practices were quizzed on how they would design-in social value so that the client can take their social value commitment all the way through the construction process, but were also asked what they were doing to improve diversity and inclusivity in their practice and in the industry. This combination of a commitment to both EDI and designing for social value was worth half of the quality criteria score for the upcoming, refreshed framework.

LHC is currently tendering under the second iteration of the Architect Design Services framework (frameworks have a lifespan of four years), and Paul says the new framework will upgrade the EDI score and will ensure that more micro and small practices are included. The tender process is live at the moment and tenders must be received by 17 December 2024.

Paul says architects with a social value mission should watch for a series of new frameworks launching in the coming months, including energy efficiency, retrofit and decarbonisation, modular buildings and construction of traditional public buildings.

Thanks to Andrew van Doorn and Alex Lubbock, HACT; Paul Smith, LHC Procurement Group.

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