Collaborative procurement increases opportunities to deliver social value, and the Construction Playbook requires that 'Social value should be explicitly evaluated in all central government procurement, where the requirements are related and proportionate to the subject-matter of the contract'. Social value can include improved skills and employment, improved health and safety at work, new opportunities for local and regional businesses and a range of community benefits.
The Social Value Act 2012 requires all public sector bodies to factor in economic, social and environmental well-being when commissioning public services contracts. In addition, the September 2020 Procurement Policy Note (PPN 6/20) launched a new model to deliver social value through government commercial activities, requiring government organisations to 'use this model to take account of the additional social benefits that can be achieved in the delivery of its contracts, using policy outcomes aligned with Government priorities'.
PPN 6/20 requires that social value is explicitly evaluated in all central government procurements, rather than just 'considered' as required under the Public Services (Social Value) Act 2012, wherever these social value requirements are related and proportionate to the subject matter of the contract. The range of social value described in PPN 6/20 covers:
■ Helping local communities to manage and recover from the impact of COVID -19
■ Creating new businesses, new jobs and new skills
■ Increasing supply chain resilience and capacity
■ Effective stewardship of the environment
■ Reducing the disability employment gap
■ Tackling workforce inequality
■ Improving health and wellbeing
■ Improving community integration.
Example: On the Whitefriars Housing framework alliance 'establishment of a steady volume of work enabled both constructors to operate using a stable workforce and to increase their efficiency on site... The client, with both constructors and in partnership with Mowlem, established the Whitefriars Housing Plus Agency which secured training opportunities for 38 people in the first year and a total of over 200 during the programme as a whole.' |
Employment and training opportunities are examples of the social value that can be delivered as part of a construction project. The government has recognised the importance of making 'effective use of public procurement to encourage skills development in construction supply chains' (BEIS, 2018). Collaborative construction procurement can create and deliver commitments to improve employment and skills opportunities throughout the supply chainand can use detailed and proportionate benchmarks for this purpose such as those provided by the Construction Industry Training Board.
Example: The Maidstone term housing alliance reported how 'Working in partnership with Mid-Kent College, VINCI Facilities developed a training scheme that equipped a core team with the necessary skills to finish all kitchen and bathroom works on any given property' and 'a similar partnership with North Kent Construction Skills allowed VINCI Facilities to extend its training outside the business by offering extensive work experience placements, a number of which have now developed into apprenticeships.' |
Social value can include increased opportunities for SMEs and for local and regional businesses. The Construction Playbook recognises that 'SMEs are experts in their fields and can provide insight into MMC, innovative technologies and ways to minimise the GHG footprint of the proposed solutions across their whole lifecycle'.
Example: Hackney Homes and Homes for Haringey used the SCMG housing framework alliance to create 'additional employment and skills opportunities for individuals, for example 46 new apprenticeships over the first 18 months of the Hackney programme, plus establishment of the Building Lives Training Academy where apprentices who have got NVQ Level 1 are engaged by constructors/specialists according to demand of ongoing work so as to achieve NVQ Level 2 after 15/18 months.' |
SMEs and local and regional businesses can be selected and appointed directly by the Client, for example by sub-dividing a project into specialist packages through collaborative construction management.
Where a Client does not want to take on the responsibility of appointing local and regional businesses directly, it can create new opportunities by working with tier 1 contractors and using Supply Chain Collaboration as described in Section 6.3 to explore the benefits of them appointing local and regional subcontractors, suppliers, manufacturers and operators.
Example: The Futures Housing Group programme created a tender with 'measures attractive to SMEs but open to all' and features that benefit small businesses such as 'cashflow easing features that included the provision of key materials in certain lots on a free issue basis, such as heating installations, bathroom installations and electrical works' and 'proposals to have embedded payment cards with the contactors, enabling them to claim payment immediately on agreement of final account'. As a result of this approach: ■ 'Of the 23 contractors invited to join the Framework, only two are non-SME' ■ 'The average size of the other companies is less than 25 employees.' |
Example: The SCMG housing framework alliance established ' early joint appointment of comprehensive range of SME Tier 2 and Tier 3 supply chain members' and created new opportunities for SME subcontractors and suppliers. They described how: ■ 'Through the SCMG systems, new lines of client contact are established with tier 2 and tier 3 supply chain members at an early stage in the preconstruction process so that they can make maximum contributions to design, resident consultation, surveying and programming and can work in conjunction with the client and tier 1 contractors' ■ 'The SCMG systems have demonstrated a breakthrough in enabling public sector clients to deal directly with key subcontractors and suppliers so as to ensure they build up fully integrated working relationships' ■ 'A multi-client, multi-contractor team has engaged with a wide range of SME subcontractors and suppliers under a standardised system. ' |
A contractual Supply Chain Collaboration process describes collaborative subcontract reviews led by tier 1 contractors after their own early appointments. It can ensure that these reviews take account of the particular benefits that local and regional businesses may offer in terms of safety, quality, cost, sustainability and other relevant factors. This approach offers a major breakthrough for central and local government and for other public sector clients who wish to support the local and regional economy without making multiple direct appointments or infringing Public Contracts Regulations. Trial Project case studies demonstrate how these systems have worked and how social benefits can be obtained.