Re-thinking Value in the built Environment - A G4C event

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Re-thinking value in the built

environment

Re-thinking value in the built environment

July 31st 2015

Founded in 1986; UK’s largest independent think and do tankInspired by 3 principles:

Sustainable development Social justice People’s well-being

…and a belief that metrics can create positive change

• Social enterprise founded and owned by NEF to help organisations put NEF’s ideas into practice.

• We aim to prove and improve social, economic and environmental impact and put people and the planet at the heart of our work.

“Economics as if people and the

planet mattered”

Why are we interested in measuring social value?Big Picture

The problem with traditional measures of success

kennedy_speech.mp3kennedy_speech.mp3

Robert Kennedy (1968) talks about Gross National Product

Problems with measurement

1. Financial measurement:limited measure of value

2. We allocate resources onlyto the things we can measure

3: Stakeholders are left out ofdecision making

SROI is a way of understanding how effectively money is spent

SROI = [Value of outcomes] [Investment]

It considers triple-bottom-line benefits and investments (economic, social, environmental)It is an outcomes based evaluationIt measures change that matters to stakeholdersIt can be evaluative or forecast

What is SROI and how can it help us?

Principles

1. Involve Stakeholders

2. Understand what changes

3. Value the outcomes that matter

4. Only include what is material

5. Do not over claim

6. Be transparent

7. Verify the result

Some relevant organisations we have worked with

CASE STUDY Newlon Fusion (Housing & Regeneration) - Social valuation

THANK YOU

Charlotte CrackNEF Consulting

For further information contact:[email protected]

+44 (0) 7811160822 [email protected] www.lm3online.com

Social Value is there a benefit and to whom?

Adam Wilkinson

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http://www.adamwilkinson.com/


http://www.lm3online.com/


Today•Brief overview of ways to assess social value, based on purpose

•How sustainability/Social value are changing public procurement

•An example of a methodology and tool - LM3•Case study with TfL

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What is your purpose?

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• Communities – CSR, Reputation• Shareholders – Demonstrating value• Customers/Clients – Winning business, CSR• Government – Winning business




+44 (0) 7811160822 [email protected] www.lm3online.com15





Forces on Public Procurement

1. Eu Regulation and new directive strengthening and including social benefit specifically for the first time

2. UK National Procurement policy equal weight to social, economic, environmental

3. Localism act and Public Services (Social Value ) Act – Specific legislation

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Social value criteria

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NNDC compared two contracts. The LM3s are on the right. Note that the smaller contract in fact generated more money for the local economy!

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How LM3 works in practiceTwo construction contracts





Large scale Case Study

ALL North East Local Authorities’s

140.000 suppliers

£3.5bn annual procurement spend





Corporate Lm3 Area distribution





Business Case?

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• Government Procurement highly regulated local, national, and European scales

• Tenders really have very limited area for distinctiveness• Price/Quality balance and Sustainability

• To be distinctive meet procurement criteria:• Objectivity• Transparency• Auditability





TfL STIP

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TfL's Structures and Tunnels Investment Portfolio (STIP) is currently made up of eight key structures, all of which require refurbishing or replacing to ensure they remain fit for purpose for the 21st Century





Structures and lead suppliers• Hammersmith Flyover Costain• Chiswick Bridge BAM Nuttall• A406 Woodlands retaining wall BAM Nuttall

• A406 Fore Street Tunnell BAM Nuttall• A127 Ardleigh Green rail bridge Hochtief• A1 Upper Holloway rail bridge Hochtief• A1 Highbury Corner rail bridge Hochtief• A406 Power Road rail bridge Hochtief

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First Indications





Messages

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• Make sure you understand your purpose and any regulatory or other criteria.

• This applies both to Commissioner and Supplier• LM3 meets public sector criteria – Common Language• TfL, Company, and Community all benefit• Allows TfL to quantify socio economic impact – not only in

London but also nationally• Be systematic, consistent, and do it properly





References

• www.lm3online.com• www.adamwilkinson.com• www.proveandimprove.org• Measuring sustainable procurement




Transport for London’s Responsible Procurement and Supplier Skills

Programmes

Tim Rudin

Supplier Skills Project Manager

31st July 2015

London

• 1,579km2

• 7.5m residents• 30 million visitors per annum• 28.7 million journeys per day

…and growing - London is growing at a rate equivalent to Tube train full of people added every week

London’s Social Challenges

Poverty• 1 in 7 of London’s employees are paid at a rate below poverty levels• 590,000 children (37%) live in poverty in London

Employment• Just under 1 in 5 households in London are workless • Around 15% of 16 – 24 year olds in London are unemployed• Low level of skills – under 50% have literacy & numeracy levels of primary school-

aged standards • Employment projections show an increase in the number of jobs requiring degree

level or higher qualifications of 800,000 between 2011 and 2036 – Londoners need to be skilled up to successfully compete for jobs.

Diversity• A third of London’s population are from a BAME background• 55% of young BAME males are unemployed• 20% of the working age population of London has a disability, yet only 11% are

working

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TfL Commercial - Scope

Around £6bn per year

30,000 suppliers

Diverse range of goods and services

Over 500 Commercial agents

£73bn spend to 2020/21 in TfL’s Business Plan

TfL’s Commercial Strategy

Realising Social Value through Responsible Procurement

Supply chain diversity & equality and inclusion

Community initiatives & tackling crime and disorder

Ensuring training and employment opportunities & meeting skills shortages

Union representation and workers rightsLondon Living Wage

and working conditions

Ensuring standards of labour conditions and human rights in the supply chain

Climate change, pollution, natural resource management

Fair Employment

Community Benefits

Workforce Welfare

Environmental Sustainability

Ethical Sourcing

Skills and Employment

Equality and Supplier Diversity

The benefits of Responsible Procurement

• Helps manage reputation risk• Builds scarce resources & skills in supply

chain• Brings improvement and innovation through

supply chains• Helps deliver value • Meets policy and organisational objectives• It’s the right thing to do!

TfL’s Supplier Skills Programme

Tessa Staniforth

Skills Shortages in the transport and infrastructure sectors

Up to

20% skills gapin some technical

areas

Skills & Employment Programme Strategic Labour Needs and Training

(SLNT) – one of the seven themes of the Mayor’s Responsible Procurement Policy

Supply chain programme initiated in 2009 – leverage wider links with suppliers and Mayoral initiatives

Programme uses a model developed in conjunction with suppliers to incorporate employment and training requirements in contracts

Ensures TfL spend is generating economic and social benefits locally

Skills and Employment Programme -Approach

Strategic Labour Needs & Training requirements attached to new contracts – ‘Contractual Approach’

• Skills & employment outputs linked to contract spend

• Range of activity areas suppliers can deliver against

Structured approach to engaging suppliers holding

existing contracts – ‘Supplier Relationship Management Approach’

• Deliver skills and employment outcomes on a voluntary basis

SLNT Contractual Approach

• Trigger Points:

• Equivalence andPriority:

Consultancy /

Service Contracts

(£1m Value)

ORConstruct

ion / Manufact

uring Contracts

(£3m Value)

OR

1 SLN

T Outp

ut

Apprenticeship

Worklessness

Job Start

Graduate

Placement Positions(20 Days)

Tasters Positions

(100 Days)Apprenticeship StartJob Start

(non –workless)School

Engagement (20 days)

50% of SLNT outputs must be in a priority area

Delivery to date Supported suppliers in creating over 4,000 new apprenticeship

positions within the supply chain

Over 4,500 unemployed Londoners have been access jobs with TfL suppliers

Provided work, training and placement opportunities for a range of under represented groups including NEET’s, ex-offenders and people with disabilities.

• 83 ex-offenders into employment

Recognition:• Business in the Community Collaboration and Partnership

Award 2013• Government Opportunities CSR Initiative of the Year Award

2013

Outcomes

Engineering Consultancy Apprenticeship

Work Experience Programme with Ringway Jacobs

Routes Into Work at London Transport Museum

Highways (Construction) apprenticeship programme

Highways Maintenance apprentices

Worklessness job starts on TPS contract

Keys to success

Internal buy-in• Senior level support and sponsorship

Supplier Skills Team provides support and guidance• Avoid ‘let and forget’

Partnership working between TfL and its suppliers• Cleary articulate the ‘why’• Addressing common priorities - mutually beneficial activities

Working with the right partners• NAS, DWP, SFA, network of referral partners

Celebrate success

Re-thinking Value in constructionRe-thinking Value in construction

Re-thinking Value in Construction

Ben PritchardConsultant

@Benpritchard53

Thank you for listening

For further information contact:[email protected]

Introduction to Social Return on Investment in Practice

The Context: The Social Value Act • The commencement of the Public Services

(Social Value) Act, requires “public authorities to have regard for economic, social and environmental well-being in connection with public service contracts” (HMG, 2012)

• The Cabinet Office (2015) recent ‘Social Value Act Review’ explains the lack of clarity in social value measurement makes it harder for procurement officers to evaluate the additional value for money claimed by a social value offer.

• The impact of the financial crisis in the construction industry, was “particularly felt on the recruitment of young people, where apprenticeships have plummeted” (Chevin,2014).

• In 2013 there were 7,280 construction apprentices in England half the number for 2008/2009 (Chevin, 2014) .

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“The Budding Brunels Rail course was beneficial it improved my interview skills and gave me more information on engineering.”Karthigan, London

• There is not currently a standard approach to SROI it is important that it is underpinned by a strong evidence base.

• SROI is a framework for measuring a broader concept of value taking into account social, economic & environmental aspects.

• SROI is not a panacea and that the data requirements are “fairly onerous usually academic evidence has to be drawn from other studies an assumptions and expert judgement used (Oxford Economics, 2009: 4).

• One of the problems is there are not standard proxies in use. The Global Value Exchange is an interactive website that enables users to upload outcomes, indicators and financial proxies so progress is being made.

The Social Return on Investment Methodology

“The course was beneficial because I gained confidence, experienced new things and got knowledge about Network Rail”.Ali, London

Budding Builders Birmingham • Eight young people completed a practical

construction skills course at the Summerfield Community Centre.

• Young people completed an OCN Entry Level 3 Course in Multi-Craft.

• Young people also completed CSCS & employability skills training.

• Young people then progressed on to a Practical Project where they updated the Summerfield Community Centre alongside Willmott Dixon staff.

“The most valuable lesson that any child can learn is that he or she can achieve a great deal more by becoming part of a team than they ever could on their own.” HRH The Duke of Gloucester

What Changed? • Two young people that were working

part time were inspired to consider a career in the construction professions.

• One of the female students family were supportive of her choice of a career in construction in light of the support she received from the Trust & Willmott Dixon.

• Young people increased their confidence as a result or working in a real construction environment.

• Young people were proud of the contribution they had made to improving the Summerfield Community Centre.

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“As a result of the project there were positive changes to the community who use the centre. The improvements will bring people together”.AH, Birmingham

Building Budding Builders SROI

“The group came together and demonstrated good

communication skills, team working skills, peer learning

skills & following instructions. They also

gained valuable practical experience, employability skills & all 8 have received

an OCN ”. Angela, Construction Youth Trust

Issue Outcome Stakeholder Financial proxy

Confidence Increased confidence Beneficiary £1195.00

Friendship Increased social networks

Beneficiary £806.00

Increased Income

Increased wages Beneficiary £6341.80

Tax revenue forgone

Increased tax take Exchequer £501.20

Improved health Beneficial impact of health on employment.

NHS £698.60

Career in professions

Secure a job as Trainee Project manager for 2 trainees less JSA

Beneficiary £14,592

Tax revenue forgone

Increased tax as a result of 2 learners moving from p/t to f/t work

Exchequer £2,000

Forecast SROI Ratio for Budding Builders

“A well thought-through project with real work experience: a project that the whole community could get involved with. It was a great opportunity to work alongside the Willmott Dixon TeamOscar, Construction Youth Trust

Forecast Social Return on Investment (SROI) Ratio Social value of outcomes £70,328.17Inputs of the Willmott Dixon Foundation’s funding & Willmott Dixon’s staff time supporting young people

£10,800

SROI Ratio £1: £6.51

For every £1 invested

There is forecast wider social value creation of £6.51

The Budding Brunels Rail Course • 18 students completed the Buddings

Brunels Rail course in Acton • Students attended Imperial College

London & were given interactive career presentations from Network Rail staff.

• Students went on a site tour of the Acton dive-under site & were introduced to a dumpy level and a theodolite.

• Students pitched an advertising campaign to encourage more people into the industry.

• Students were interviewed by Network Rail & those that performed well were offered a work experience placement.

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“I want to be an engineer for Network Rail or London Underground”.Ali, London

What Changed? • For young people on the course• Enhanced teamwork & Interview skills• Increased knowledge of the construction

industry• Students said Budding Brunels Rail enabled

them to make a more informed decision about their future careers.

• Increased awareness of opportunities available to them within construction.

• Increased confidence• Enhanced employability skills• For young people on the work experience • Increase in confidence working in a

professional environment. • “I would like to visually see my work after I

retire”• All students reported an increase in knowledge

of different careers within the construction industry

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“The Budding Brunels Rail course was beneficial it improved my interview skills and gave me more information on engineering.”Karthigan, London

Building Budding Brunels Rail Forecast SROI

“The course gave me the incentive to finish my qualification and go on to higher academic studies”.Madji, London

Issue Outcome Stakeholder Financial proxy Confidence Increased

confidence Student s £1195.00

Friendship Increased social networks

Student s £806.00

University placement

Competitive university placement

Students £495.00

Skills shortage Reduced skills shortages

Construction industry

£30,614

Confidence teaching

Increased confidence working with young people

Construction industry professionals

£200.00

Confident Communication

Increased confidence working in a professional environment

Students following work placements

£182.00

Project Management

Basic knowledge of project managements


£395

Increased aspiration

Improved motivation at school


£243

Forecast SROI Ratio for Budding Brunels Rail

“I thought construction was only brick laying and cement, but now I can see the many other things in construction especially the technology that is used!” Student, London

Forecast Social Return on Investment (SROI) Ratio Social value of outcomes £81,163.66Inputs of Network Rail’s funding & Network Rail’s staff time supporting students

£14,943.80

Forecast SROI Ratio £1: £5.43

• The SROI model at the Trust has been developed as part of a KTP with LSBU

• SROI is a principles based methodology and the model at the Trust used to calculate the SROI of projects at the Trust is robust.

• It is the changes that happen for stakeholders that are important and through the SROI report we described the value the project created.

• The forecast SROI ratio for Budding Builders is 1: £6.51 & for Budding Brunels the forecast SROI ratio is 1: £5.41 but the report is about value not about money.

Recap on the SROI of Budding Builders & Budding Brunels

“The sessions have been a real eye opener and I can’t get enough of them - while my youngest child is being cared for in the crèche, I'm out learning new skills!.”Sarah

John GrahamHead of Business Development

Construction Youth Trustwww.constructionyouth.org.uk