Social value is very much on the public sector’s agenda, with research* suggesting that they could benefit from an additional £15bn of investment if it was fully embedded into their commissioning and procurement process. Social value’s increasing importance is also demonstrated through its weighting in public sector tenders. Recent public sector tenders that I have provided my input into have seen social value questions worth up to 20% of the overall tender score. Community benefit clauses (CBC’s) are one way that private and public sector organisations can work together to maximise the creation of social value, often with the potential to embed pro-social strategies beyond the requirements of the bid.
The public sector could create an additional £15bn of additional investment if social value was embedded into their commissioning and procurement process
Community Benefit Clauses
Community Benefit Clauses are contractual clauses which are used to build a range of economic, social or environmental conditions into the delivery of public contracts. The supplier therefore enters not only into a “legal contract,” but also a “social contract” in which they implicitly commit to comply with specific commitments and targets designed to provide demonstrable and measurable social investment back into the local communities. Whilst not currently legally enforceable in the UK, EU procurement rules do provide a solid legal basis for their inclusion in all circumstances.
Community Benefit Clauses create a partnership between the public and private sector and provide assurance to the public sector that social value targets will be met. In the long term, this partnership increases social and community welfare.
The benefits to a supplier commiting and delivering on the social value targets contained in a CBC include building a reputation based not only on project delivery performance but also on the social value legacy they leave behind once the contract has come to an end.
The clauses also challenge the notion that profit is the main motivator in project delivery for private sector suppliers as they highlight the consideration suppliers need to give to social goals.
Whilst CBC's sound utopian in practice, their benefits will only be fully realised if they are implemented and managed effectively. Even if CBC's are added to a supplier’s contract there are still potential risks. These risks include:
- Inconsistency of targets and methods of measuring goals;
- Often in the public sector, no one individual is allocated to manage the social value targets set by the supplier;
- Although reporting of social value achievements regularly occurs there is minimal evidence of the actual measuring of outputs and outcomes of social value;
- No real consequences for suppliers if targets aren’t achieved.
It would be all too easy for a supplier to commit to unachievable social value targets during the procurement process making them the preferred bidder over another however, CBC's can only create tangible social value if suppliers deliver against their promises with clear consequences if commitments aren’t fulfilled.
Faithful+Gould's success in winning significant places on major frameworks is testament not just to our technical excellence but also our commitment to creating and delivering social value.
Frameworks and Social Value
Faithful+Gould can commit to creating social value even if CBC’s are eventually added into contracts as we have a proven track record of successfully investing in projects delivered in local communities.
Our success in winning significant places on major national frameworks such as the Pagabo Professional Services in Construction and Premises framework, as well as regional and sector specific frameworks, is testament not just to our technical excellence but also to our commitment to creating and delivering social value. Traditionally companies pledge to create social value in bids through charitable giving, ethical labour practices and recycling initiatives. Our commitment goes much further than this and includes numerous university visits, promoting the benefits of a career in the built environment, voluntary time for community projects and the fair and ethical treatment of our supply chain.
*Research undertaken by the Social Value Portal