Peter Masonbrook from Faithful+Gould and Penny Anderson from Atkins discuss the role and importance of social value within the public and private sector
We work with a large range of clients in the construction and engineering industry, and this includes a mix of private and public sector companies. As part of a focus on social value and responsibility, we look at what each of these sectors bring, and what they can learn from each other.
At a headline level, some of the typical, main differences in how the two operate differently are that the private sector needs to focus on winning and maintaining work and, therefore, must make commitments and always deliver on all these aspects as agreed from the outset. They have to take the lead on, and ‘up the game’ in social value.
Not completely conversely, but with some variation, the public sector has a requirement to meet all outcomes stipulated at a legal and political level, especially as they ultimately answer to the public. What is put in contracts can be quite restrictive, comparatively, but the result often has a hugely positive impact on communities, something that is no small consideration.
Legalities for the public sector
It is Section 106 that outlines the legal agreements between Local Authorities and developers, which are linked to planning permissions, also known as ‘planning obligations’. They are drafted when it is considered that a development will have a significant impact on the local area, that cannot be moderated by means of conditions attached to a planning decision. In contrast, this isn’t something that is stipulated for non-government/non-local authority entities. In addition, the public sector can’t be seen to be favouring one community and so must be fair and equal. Add to this, the introduction of PPN 06/20 in January 2021, meaning that a minimum 10% mandatory weighting for social value needs to be included in public sector procurement processes.
It’s not just about sectors
The extent of social value embodiment is more complex than just the type of sector; geography also comes into to mix, as well as the individual ethos of the company. Additionally, social value maturity in all sectors is different; for example, the shift is more intense for councils and Local Authorities.
“Equality is of huge importance to Generation Z, with 91% believing that everyone is equal and should be treated that way. Issues surrounding diversity, equity, and inclusion are more salient than in any other generation.”
Also worth considering, is the different processes and priorities for these two sectors. As mentioned, the ‘public purse’ is at stake, so proof and demonstration of what is being done to further social value are key. Within the private sector, whilst this is not a consideration, there is a focus on proof of care and diligence for reputational reasons, not doubting there is also a genuine desire to make a difference. The private sector has more opportunity to be flexible; not being confined in the same way by legalities and politics, and there is more of a freedom of scope to shape a way forward that is right for them.
Talking the right talk
An additional essential element is having a common language. ‘Social value’ isn’t always a phrase that resonates within each industry, or it can mean slightly different things. As a company, Atkins must, therefore, establish how businesses talk to their communities, and help with this process, using our expertise from each area we have worked within.
Everyone describes this ever-increasingly important concept in a slightly different way, so connections aren’t always made, and opportunities may be missed. In order to move forward cohesively, there must be aligned messaging, implemented in the projects of any company.
Embedding the future of social value
To date, construction and engineering, and their impact on social value haven’t always been offered as a key subject area within schools, or at the forefront of careers advice. More recently, the private sector has helped illustrate this importance by demonstrating the value and future of engineering, which is something that is very important to young people who are increasingly socially aware. Engineering is the future, and many companies are helping spread this word to schools and as a result, shaping the engineers of the future. As a by-product, it is reputationally beneficial for businesses to lead in this area.
Due to the social consciousness of the younger demographic, businesses will also attract new talent into their organisations because of a focus on areas like social value. Equality is of huge importance to Generation Z, with 91% believing that everyone is equal and should be treated that way. Issues surrounding diversity, equity, and inclusion are more salient than in any other generation (Barnes, 2021).
Gen Z are also passionate about solving the world’s problems. In the words of McKinsey & Company, they “mobilise themselves for a variety of causes. They believe profoundly in the efficacy of dialogue to solve
conflicts and improve the world.” They want to work for environmentally conscious companies. This underlines the importance of employers having a strong sense of meaning in what they do, enabling employees to feel as though they are benefiting society. As the World Economic Forum stated: “For this new generation, it is not enough for their employers to simply have a compelling purpose. They want to see purpose lived out authentically through bold actions.”
In other words, there must be a demonstration of why and how they are adding social value, with evidence throughout, taking into account the needs of the community they are serving. For example, creating local youth clubs, serving the area and age groups that need the most support, and importantly, allowing the community to shape it and be involved at every stage. There are only benefits for all when this position is undertaken, no matter what the sector.
