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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
+44 (0) 7811160822 [email protected] www.lm3online.com
Social Value is there a benefit and to whom?
Adam Wilkinson
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+44 (0) 7811160822 [email protected] 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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+44 (0) 7811160822 [email protected] www.lm3online.com
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
+44 (0) 7811160822 [email protected] www.lm3online.com
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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+44 (0) 7811160822 [email protected] www.lm3online.com
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
+44 (0) 7811160822 [email protected] www.lm3online.com19
Large scale Case Study
ALL North East Local Authorities’s
140.000 suppliers
£3.5bn annual procurement spend
+44 (0) 7811160822 [email protected] www.lm3online.com
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
+44 (0) 7811160822 [email protected] www.lm3online.com
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
+44 (0) 7811160822 [email protected] www.lm3online.com
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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+44 (0) 7811160822 [email protected] www.lm3online.com24
+44 (0) 7811160822 [email protected] www.lm3online.com25
+44 (0) 7811160822 [email protected] www.lm3online.com
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
+44 (0) 7811160822 [email protected] www.lm3online.com28
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
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) .
- .
“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.
- .
“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.
.
“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
- .
“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
Students following work placements
£395
Increased aspiration
Improved motivation at school
Students following work placements
£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