How to Achieve More ‘Social’ Value for MoneyThursday 14 April 2016
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Welcome
Housekeeping
Fire exits – no planned fire drill
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Get involved
Follow us: @PellingsLLP
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Cllr Jack Hopkins
Cabinet Member for Jobs and Growth, London Borough of Lambeth
@JackHopkins_Lab
Peter Holbrook CBE
Chief Executive, Social Enterprise UK
@peteholbrook
Indra Pooran
Manager, Black Training and Enterprise Group (BTEG)
@BTEG_LDN
Nigel Goddard
Director of Building Surveying, Pellings
@PellingsLLP
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Speakers
Cllr Jack Hopkins
Cabinet Member for Jobs and Growth
London Borough of Lambeth #PELCPD
Peter Holbrook CBE
Chief ExecutiveSocial Enterprise UK
ChairSocial Enterprise World Forum 2012-15
"There is one and only one social responsibility of business - to increase its
profits.“Milton Friedman
TRUTTrust in institutions to operate in society’s best interest
Profit Social
Motivation
UK State of social enterprise 2015:
78,000 social enterprises
>1 Million staff employed
39% based in deprived areas
53% grew compared to 28% of SME’s
57% predict growth next year
40% led by women, 14% by a BME leader
75% actively involve beneficiaries in governance
£36 billion to the UK economy
Examples of joint working co-commissioning and social enterprise
Coin Street Community Buildrers
Education
Social care services
Housing Charities
Health
Leisure and culture
Corporate Responsibility
Philanthropy and
investment
Consumer choice
What can the
public sector do
support social
value?
History of the UK movement – UK government
• Prime Minister Tony Blair commits to supporting social entrepreneurs in his first policy speech1997
• UNLTD* launched to promote and develop social entrepreneurs with £100m endowment2000
• Social Enterprise Unit formed as part of the Department for Trade and Industry2001
• Social Enterprise Coalition (now Social Enterprise UK) established2002
• Community Interest Companies (CICs) - legislation to create a new form of corporate entity introduced2005
• Social Enterprise Investment Fund - £100 million fund established for investment in new and existing social enterprises delivering health and social care services
2009
• Right to request introduced to support National Health Service staff establish social enterprises 2009
• All main parties manifesto’s have strong commitments to social enterprise –
• Social Enterprise features in the Queen’s speech.2010
• Government commits that 1 in 6 public sector employees will work for staff owned social enterprises and mutuals
2011
• Community Rights to Challenge, to Bid and to Build enshrined in the Localism Bill
• First ever Social Impact Bond launched2011
• Launch of Big Society Capital with £600m of investment for social enterprises and charities.2012
• Passing of the Public Services (Social Value) Act
• Prime Minister David Cameron launches the G8 Social Investment Taskforce2012/3
History of the UK movement – public policy
• European Commission establishes Social Business Initiative across 3 DG’s - a top EC priority to 20222013
• EU procurement directives amended - thresholds increased, health, social care markets can in part be pro-social enterprise / mutual, social value principles reinforced.
2014
• Social Investment Tax Relief - 30% personal tax relief for investors in CICs and charities up to £5m 2014
• Social Value Act review by UK Government, Procurement Reform Act enacted in Scotland2014
History of the UK movement – public policy
• Lord Young chairs review of the Social Value Act – central government guidance strengthened, a further review within 18 months2015
• All main parties manifesto’s have strong commitments to social enterprise –
• “the Conservatives will make it easier to set up and run a social enterprise”
• “the Conservatives will enshrine a ‘right to mutualise” for public sector workers”
• Housing associations
2015
• Dormant Assets Commission established
• Channel 4 future explored … is social enterprise an option?
• Is the social enterprise policy momentum beginning to fade? 2016
Public Services (Social Value) Act 2012
Establishing ‘social value’ principles in
public procurement
UK = £100bn per
year on Government
procurement
“Today, successful businesses must play a catalytic role, not only managing our own economic, social and environmental impact; but
creating value for all our myriad of stakeholders in collaboration with others...and responsible business and commercial success can be driven
simultaneously” Paul Walsh, CEO Diageo
“Any business that does not internalise social and environmental challenges is talking to itself and will, eventually, be rejected by its customers and its staff”
Paul Polman, CEO Unilever
Management is doing things right; leadership is doing the right things
Peter F Drucker
“Coming together is a beginning; keeping together is progress; working together is success.”
Henry Ford
PwC
Johnson & Johnson
Interserve
Wates
Zurich
RBS
Santander
The £1billion corporate challenge:
£1,000,000,000 of procurement spend by 2020 through social
businesses
£1,000,000,000 of procurement spend by 2020 through social businesses
Indra Pooran, Manager
Black Training and Enterprise Group (BTEG)
www.bteg.co.uk
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“Legacy Challenge”
Nigel Goddard MRICS APMP MAPM MIoD
Partner & Director of Building Surveying
Pellings LLP
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About Pellings – Who are we?
■ Integrated design, property and construction
consultancy that is passionate about making
a difference
■ Multi-disciplinary practice of Architects and
Planners, Project Managers, Building
Surveyors, Cost Consultants, and
Sustainability and Health & Safety advisors
■ Predominantly working in the Housing and
Regeneration, Education sectors
■ Equally comfortable in the new build and
remodelling/refurbishment arenas
Accreditations
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Key facts
27% - proportion of government’s reported procurement spending
that reached SME’s in 2014-15
£4.9bn - government reported procurement spending directly
with SME’s in 2014 – 2015
Number of SME’s working on government contracts Unknown
Source: National Audit Office report 9 March 2016
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SME Definition (confused.com)
■5.4 million SME’s operating in the UK
■EU commissions definition:-
• employs fewer than 250 people
• has annual turnover less than or equal to £39m
• has a balance sheet of less than or equal to £33m
Micro Business = less than 10 employees & turnover under £2 million
Small Business = less than 50 employees & turnover under £10 million
Medium Business = Less than 250 employees & turnover under £50
million
So depending on which definition you use an SME could have anywhere between 50 and 500
employees and have a turnover between £6.5 million and £50 million. One thing that virtually everyone
agrees with is that SMEs account for more than 99% of all UK business and that they employ over 12
million people.
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‘Theseus’ Paradox’
Theseus' paradox, is a thought experiment that raises the question of
whether an object which has had all of its components replaced remains
fundamentally the same object
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‘Triggers Broom’
A Personal Journey………….
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Project KPI’s or CSR commitments?
Project KPI’s
Evaluated project by project
■Waste Disposal
■Resident Satisfaction
■Time
■Cost
■Quality
Program ESP Commitments
All based on a per annum spend
■Work placements 14-16
■Work placements 16 -19
■Curriculum Support
■Apprentices
■Locally advertised employment
■Subcontractor NVQ’s
■Sub contractor training plans &
Support
Where is the connection?
What difference does this make at an estate level?
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Contractors viewpoint?
The “fears and concerns” around meeting Community Investment
Aspirations/Commitments
■ We don't currently understand the priorities and when we do, we need a Plan
■ We won't set up a Community Investment Group to drive the process
■ We won't see Community Investment as a priority, as there will be too much focus on the delivery the
works programme
■ The size and speed of the works programme drives the Construction Partners commitments
■ We haven't got a plan that balances cost/benefit of the investments we make or where we invest
■ We will not link to the needs (and constraints) that colleges have regarding training and apprentices
■ Delays getting projects to site, with cash flow constraints will hinder community investment
commitments
■ We are all competing for the same people in terms of training and apprenticeships - "fishing the same
pond“
■ We will fail to ensure that the Supply Chain buys into our Community Investment approach
■ Partner Contractors have over-promised in their tenders
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Supply chain viewpoint?
■Cash flow and payment terms?
■Who bears the costs of
apprentices and CSR?
■What does being local mean?
■Longer term view – historic
delivery
■Lack of consistent work flows
■All about price
■De-valued labour supply
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Consultants view point?
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Context for Social Value
‘‘What is critical is that every penny of housing investment is spent
effectively and in a way that delivers the most benefit for people, their
communities and society as a whole’’
Kris Hopkins MP Minister for Housing
Communities Count: The four steps to unlocking Social Value
Social Enterprise UK report June 2014
Measuring the Social Impact of Community Investment: A guide to using
the wellbeing valuation approach
HACT March 2014
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Lambeth ESP TargetsWelcome to HACT's Value Calculator. This simple excel tool will support you to apply the values
in the Social Value Bank to your community investment activities.
•the Value Calculator sheet is where you enter your data and the crunching happens behind
the scenes
•the Results sheet provides a handy summary of your impacts
•the Description and Evidence tab explains each of the values and the evidence you need to
apply them
•the Relationships tab lets you know which values you can apply together
•And the surveys are all here which you can do before and after your intervention to tell you
which values you can apply.
The Values used within this tool were generated with the generous support of Affinity Sutton
and Catalyst.
We hope this tool helps you to make the most of the Social Value Bank. We would love to hear
what you think of it and any suggestions for improvements.
Get in touch at:
020 7250 8500
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What does the delivery of £46m look like?
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■We are now monitoring these ESP based Contractual obligations using
the HACT Social value matrixes via Lambeth Livings Community
Investment Core Group, and which based on the 15/16 construction
spend of £46m within Pellings remit, should generate a potential Social
Value outcome of some £221k approx.
■Pellings view however is that the ‘ESP commitments’ alone do not go
far enough in establishing a lasting focused community based
legacy in the areas where construction activity is undertaken at estate
level.
“Construction activity should be the catalyst for a more connected
Social Value Chain, that exists well before works are on site, and
continues well past its completion’’
What is the reality?
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Throwing rocks in a pond?
What of the Local Impact!
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“CBS” – or Community Business Support
‘..the growing value of the private sector in creating social value in
supply chains becomes as critical as direct delivery…’
Partnerships to deliver projects increasingly involves the private sector, with
respondents reporting that work with the private sector tended to have greater
business and or/employment focus. Examples included:-
■ Delivering social enterprise assistance programmes
■ Increasing the capacity of local SMEs to become part of the supply chain
■ Creation of apprenticeships
■ Providing business support and start up advice
■ Advice to organisations in regard to social value, social enterprise and
innovation
■ Providing sponsorship for social value schemes
Communities Count – Social Enterprise UK 2014
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Developing a Social Value Chain….
Local Business/Social Enterprises with
capacity for growth
Corporate CSR ££ commitments
related to construction
activity
Access for Local Business to a full range of low cost business planning
resources, skills and potential funding for
local employment and CSR strategies
Employ more staff
Training & apprentices
Further localised
CSR
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Community Business Support (CBS)
Local CBS Hub
Community initiatives
Contractors ESP Plans
The Local CBS Hub is the driver of, and can be driven by,
a) the specific Contractors ESP plansrelated to individual construction contracts, and
b) the current and proposed local Community Initiatives on the ground, such as incubator support, youth and employment engagement etc.,
with the aim of having a wider impact and delivering longer term sustainable outcomes for local business and residents, measuring key outcomes against social impact criteria
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Pellings objective is to see how collective CSR pledges and cash
value contributions can be used to engage more widely with the local
communities, and enable a much more diverse set of business support
and capacity building exercises in line with Lambeth’s strategic growth
objectives
Pellings Solution……Lambeth Pilot
LegacyChallenge
Creating a long term and sustainable legacy of business and jobs growth to develop thriving local communities
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‘All good men and women must take responsibility to create
legacies that will take the next generation to a level we
could only imagine’ – Jim Rohn
Our Aims
■ Using the HACT Social Value matrix as a benchmarking vehicle, we will
endeavour to provide a 400% return of ‘social value outcomes’ to every
pound of financial contributions into a Legacy Challenge Fund, with key
deliverables focussing on local business growth, job creation and
retention of staff
■ To establish a ‘physical and scalable hub facility’ for the long term benefit of the
local community
■ To support a diverse group of business and social enterprises meeting the
needs of the residents and business
■ To be a fully established and self sustaining umbrella C.I.C.
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Each challenge - Outcomes focused
■4 new social enterprises or new businesses established and supported
over a 12 month period, and with sustainable business plans in place
and 3rd party funding brokered
■Up to 8 local business supported over a 12 month period with the
agreed and deliverable target to improve turnover/profit by 10% p.a.
■Of the above
■ At least 1 initiative aimed at supporting young people and/or led by
Young Entrepreneurs
■ At least 1 initiative aimed at supporting the BME Sector
■ At least 1 initiative aimed at supporting Women in Construction
■ At least 1 initiative aimed at supporting Ex Military and service
personnel
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CBS ‘HUB’ – Member Structure
Clients
Construction project commissioners
PellingsConsultants
Specialist service providers
Assist with Solutions
Construction Partners
Delivering works on site
Sub-contractor
supply chains
GATEWAY PARTNERS
Social Investment and Community Engagement
Other potential partners
• Santander Bank
• Specialist finance providers
• Auditel
• CIOB/RICS
• Local FE Colleges
• Business in the Community
• Social Enterprise UK
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Gateway Partners – Co-ordinated activity
Legacy Challenge
hub
Supporting young people
Supporting the BME sector
Supporting Women in
Construction
Supporting Ex Military
and Services Personnel
www.londonyouth.org.uk
www.wishgb.co.uk
www.heropreneurs.co.uk www.bteg.co.uk
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‘Step on or step-up’ – Providing solutions to any journey
Enablement
Aspiration building and getting people work ready through CV support, life skill coaching etc
Apprentice
Coaching/mentoring and project management to capture and support an entrepreneurial intent
Start –up
Developing enterprise through incubator support to achieve the first £100k p.a. turnover
Growth
Working with business to achieve a high margin £1m p.a. turnover business
Quest
Increasing the valuation of £1m -£100m turnover business by £1m over 1 – 3 year duration
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James Dublins’ Story…
Tick a box or make a difference??
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Thank you
Any questions?
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