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Bringing social value to building work

Business Advisory

By Robert Gibson, Grant Thornton NI

Construction companies bidding for public sector contracts will have noted the increased focus on ‘social value’ deliverables within recent tender processes.

Already we have seen the Northern Ireland Housing Executive (NIHE) include social clauses within its procurement, and likewise recent awards of contracts worth £1bn over the next 10 years to four local contractors have included obligations for the successful organisations to establish a social enterprise in the area in which they operate. 

Locally, social value has also gained traction in the political arena and, over the past number of months, it has become prominent on the agenda of politicians and the wider community.

Following the introduction of social value legislation in other regions in the UK, there is a desire, indeed demand, in many quarters to bring forward local legislation in the form of a Social Value Act. The Finance Minister has recently added weight to the debate, commenting on how he would like to see such an Act on the statute books of Northern Ireland.

The Social Public Services (Social Value) Act 2012 in England and Wales requires those who commission public services, including construction contracts, to think about how they can also secure wider social, economic and environmental benefits.

Commissioners are therefore required to consider whether the services they are going to buy, or the way in which they are going to buy them, could secure such benefits for their area or their stakeholders. 

Typically contractors have sought to add social value by hiring constructionapprentices, using environmentally-friendly products and processes, or carrying out community consultation or organising community events.

Here, debate has evolved to consider how public contracts may contribute a social benefit beyond the lifespan of a given contract. Social enterprises are widely recognised as having a major role since they typically use their profits to fund their social mission, and to reinvest in the local communities.  Social enterprises already tick many of the ‘added value’ boxes. 

For local construction companies, the shape of future procurement is becoming increasingly clear. Those firms that can create models and partnerships that deliver tangible sustainable social benefit are likely to be at an advantage.

For many, it will seem like another ‘hoop’ to jump through to secure public sector contracts. For those that seek out specialists such as Social Enterprise NI and advisors that understand the evolving procurement regime, the prize is the potential to be more successful on public tenders, without necessarily sacrificing margins.

  • For further information, Robert Gibson can be contacted at Robert.gibson@ie.gt.com or visit http://www.grantthorntonni.com/
  • Grant Thornton (NI) LLP specialises in audit, tax and advisory services

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