There’s more to social value than cold economics, writes Steve Malone. The sector needs to think more about those intangible elements of wellbeing that help make people’s lives better
THE housing sector needs to rethink social value. For years landlords have been creating apprenticeships, buying from SMEs and investing in community projects. This is a great starting point with significant impact but it’s time to widen the definition and look at what else holds social benefit for the sector beyond local economics.
This starts with capturing the intangibles: those invisible things that we as a society think are important such as quality of life, job satisfaction, relationships, mental health, equality and happiness. These are all key to the ‘social wellbeing’ part of the Social Value Act – the bit that is about making people’s lives better in non-financial ways.
But at the moment, social value is defined predominantly in terms of local economic wellbeing. We all know that financial considerations – costs, savings and economic growth — are the basis for decision making, not just in housing but in public and private organisations right across the UK. So, if we’re going to change the way we make decisions, and base them on factors that matter most to housing association tenants and employees, then we need to make those invisible things visible.
Interestingly, the Office for National Statistics (ONS) has been doing just that for the past nine years — calculating the UK’s quality of life via its Measuring National Wellbeing Programme which assesses the nation’s health, where we live, what we do and our relationships. The ONS wants to extend traditional gauges of prosperity such as GDP, enabling policy-makers to make better, more well-informed decisions.
This is supported by a recent report from former head of the civil service, Gus O’Donnell and other politicians, who said Britain could lead the world by making personal wellbeing the central objective of government policy rather than economic growth.
Written for the all-party parliamentary group on wellbeing economics, the paper identified those intangibles I mentioned earlier such as happiness, fulfilment and the reduction of anxiety (as opposed to growth or jobs) as the main determinants of whether a government satisfied voters.
Procurement teams have an important role to play in helping housing associations satisfy their own residents and staff by creating broader social impact. They have a 360-degree view of spend across the business, allowing them to see the type of social value key performance indicators (KPIs) that are being knitted into every single contract.
I believe that procurement officers must start to question these KPIs. For example, if local jobs are created by awarding repairs and maintenance work to an SME supplier but the jobs are all zero hour contracts, then landlords must ask whether people’s lives are really being improved. The same scrutiny must be applied to the employment practices of a contractor tasked with a more implicit social value contract such as adult social care. If the workers providing care services are all on minimum wage, over-worked and under-supported, then how is such a scheme creating net positive change in people’s lives? The quality, not just quantity of jobs created must be considered when measuring social value and the procurement team must query these types of targets.
Housing providers also need to think about the social and economic outcomes that are right for their particular area. For instance, attaching apprenticeship targets to a roofing contract in a place which already has high employment and where 80% of tenants are over 70 might not be appropriate.
It’s critical that housing associations carefully consider the needs of their residents and stakeholders before they decide on the type of social value they should focus on. What is most important to their core demographic? Will it be employment in a key resident group, community cohesion, local environmental impact, childcare, social care or another issue?
The make-up of an area’s local economic structure should also influence the type of social value that is created. Supporting smaller suppliers in a locality with an already thriving micro business community might not always be the right policy. Housing associations must assess what proportion of the economy is micro, SME or large business; what balance they need to achieve and how sustainable the micro and SME businesses already are. They need to identify the fastest growing sectors; the declining sectors; what the local skill base is like plus figures on local unemployment and in-work poverty.
Last year the Government introduced new measures to reform public sourcing. Central government bodies must now specifically evaluate social value rather than just considering it. I hope this small change marks the beginning of a shift around social value which is eventually applied to local government and public bodies such as housing associations. I also hope it begins a transformation in how public sector organisations define social value.
A lot of important work is already happening through the creation of local economic growth. But more lives could be improved if organisations also address the less tangible, social wellbeing side of things.
Steve Malone is managing director of Procurement for Housing