Do we know what good social value looks like?
Social value’s purpose is to understand the impact an activity or service is having on its stakeholders and using this to inform decision making about the current or future activities or services. But how do we know if what we’re seeing is good, bad or something else entirely? In our recent webinars on the subject, we’ve discussed what social value is and how it can be applied the resources and waste sector, but based on various conversations I have been having with customers, others in the industry and internally at SUEZ recycling and recovery UK, this is question that is clearly on people’s minds. So to help take a closer look at what the answer may or may not be, I invited two leading figures in the social value and impact space to join the discussion, Emily Davies Head of Social Impact at Amey PLC, who operate a wide range of services (including waste and resources) and who’s far reaching social value plan cuts across the entire company, and Claire Watts, Future Generation Lead at East Riding of Yorkshire Council, who have embedded social value in key authority projects. Claire also played a key role in the development of the Social Value Engine, a sector leading social return on investment (SROI) toolkit.
It was a busy sixty minutes, with plenty of ground covered, including questions from the audience and of course a few poll questions threaded in throughout, but there were a number of key takeaways.
Social value is not just an evaluation tool
By applying social value from the very beginning of a project or service, it can be used to help make decisions about the activity itself, whether it will deliver the desired outcomes and how it should be monitored to determine if this is the case. By considering it early on in the planning process, it can add far more value than simply to determine if a project or a contractor has delivered what it set out to do – something Claire, and the East Riding team in particular, have experienced through their work on building sustainable communities. This has resulted in a multitude of impacts which they have been able to measure and understand using both qualitative and quantitate measurement. They have used the Social Value Engine to understand the social value being created, and this tells them that to date this has been over £3,600,000 and means that for every £1 the authority has invested, it has generated £2.60 of social value for its residents.
It can help us tackle the biggest issues facing us
There’s no getting away from the challenges we face, from climate change and biodiversity loss to economic inequality, mental health and wellbeing, and these are and will affect every community across the country, but in differing ways. Claire rightly pointed out we need creative solutions to these challenges, for which we can use social value to help make informed decisions not just about people, resources or procurement outcomes, but to help uncover solutions by understanding where the gaps are and where the biggest benefits could be.
This is also true through a procurement process, however how we do this was a matter of debate. With 65% of the audience agreeing that authorities should specify a measuring framework or tool to be used in the process, both myself and Emily urged caution with this approach, as in our collective experience this doesn’t allow a contractor to bring their experiences and expertise to help solve these issues and in doing so can stifle creativity. Restrictions that often come with the more popular used frameworks (such as the Themes Outcomes and Measures, or TOMS framework ) can be limiting, as contractors try to shoehorn in their responses into a specified KPI, rather than offering solutions that understand the local challenges, and how best they can respond to meet a genuine need.
Measure what matters
By using social value at the beginning of a project or development of service, you can create a clearer understanding of what it is you need to measure to determine if the desired outcomes are being achieved. These measures can then be embedded throughout a strategy, project plan and ultimately through your procurement process, by becoming part of the decision-making process.
At SUEZ, we’ve listened to what our customers have been asking of us and compared these with what we are delivering company-wide, to understand our strengths and where we can improve. By layering this knowledge with a social return on investment calculation, using our bespoke social value tool, we can translate these into monetary terms to understand and compare the outcomes of different activities, and use it as part of the narrative around social value, because simply telling people nice things are happening doesn’t give people a sense of scale and genuine impact. This is particularly useful when it comes to management and senior level buy in, as it allows comparison with the resources required to deliver these measures, allowing social value to be placed side by side with other critical KPIs which often are based on monetary costs and benefits.
However, for those looking to with such an array of frameworks, tools and approaches, it can easily be an overwhelming endeavour to find an approach that works for you and your organisation. So, would a standardised approach to measuring and accounting for social value be a move in the right direction? With 87% of the audience saying this is something we need, it certainly is an area that warrants further consideration, perhaps at a sector level to ensure its relevance to the services we provide, whilst also enabling creativity through procurement cycles.
So, what does good look like?
Well for our audience, they overwhelmingly told us that they would be looking for positive social, environmental and economic change, but this was closely followed by having measurable outcomes that would clearly show how much change has been generated as a result, and I would suggest that it’s a combination of the two that we need to be planning for and expecting to deliver.
With over £7 billion spent on environmental services alone each year, if the same social value ratio of £2.60 as Claire and the East Riding Team have achieved (where for every £1 spent, £2.60 of social value has been created), this would mean these services would be generating £18 billion of social, environmental and economic benefits up and down the country. And while some of this is already being generated (but not recorded), few services understand just how much they are creating and how they can improve, and fewer still are using social value as part of their planning process. But as we begin a period of significant change for the resources and waste sector as a result of the multiple legislative changes many of us are already planning for, the potential for social value benefits is huge and as such must be planned for and must be recorded.
But what we mustn’t lose sight of is that these services (from street cleansing to waste collection and treatment) are run fundamentally for local people, and not just to provide a sanitary service or to capture resources to feed a circular economy, because they provide employment, support for local communities and investment in local businesses. So, by adopting social value more broadly we can understand the deeper impacts of how that money is spent and enable more informed decision making to make sure that every penny counts going forward.