Martin Read talks to Guy Battle, CEO of Social Value Portal, about his firm's widely-adopted measurement methodology - and how FM could benefit from social value's high profile.
04 March 2019 | Martin Read
Guy Battle is likely to look back on 2019 as a particularly busy year. The chief executive of the Social Value Portal (SVP), a private consultancy and social enterprise, has led the development of a methodology for organisations "to measure and manage the contribution that their organisation and supply chain makes to society, according to the principles laid out within the Public Services (Social Value) Act 2012."
It's described as the TOMS (Themes, Outcomes, Measures) framework, and here in early 2019 the audience for this methodology is growing exponentially, with Battle currently involved on several fronts to expand its reach and acceptance.
Battle and his colleagues spent 18 months developing the methodology before making it available in late 2017. It's essentially a tool that allows organisations to consider all aspects of their activity - environmental, economic and social - to identify the 'social value' derived from it.
Developed with input from the Local Government Association, which represents the local authorities now obliged to address the social value element of their service procurement, the methodology has been downloaded more than 2,000 times by local authorities and other organisations keen to add measurable substance to their sustainability considerations. The SVP is clearly offering the right tool at the right time.
Battle cannot fully explain why it is specifically now, six years after it first entered law, that the legislation's intent has taken such a firm hold in both public and corporate consciousness. But the collapse of service providers, a general mistrust of big business, a widening public interest in organisations 'giving back' and a younger generation wanting to be involved in meaningful work seem to be the elements coalescing into one overarching direction of travel.
We are likely to see more rewiring of facilities management service conversations as public, private and third sector organisations rush to embrace the potentially game-changing nature of social value.
"Whereas environmental sustainability took 10 years to be embedded properly in decision-making," says Battle, "I'll say that - as a good guess - social value will take just two. The key reason being that it's both easier to understand and it makes much more immediate sense to people. They can see the results of it being delivered."
Environmental sustainability's problem, Battle, explains, is that protecting the climate for generations to come is a difficult thing for people to envisage. Whereas "a service contract which involves giving a job to someone who is long-term unemployed, or embraces volunteering in the community, or involves a litter-pick in the local area - these are things people can see actually making a difference."
What's more, the nature of facilities management service means that it is perfectly placed to enable much of this social value activity. Battle told an IWFM audience last November that "FM is likely to find itself undergoing a quiet revolution. Your sector is about to be turned on its head, and organisations that don't grasp this will get left behind,"
That's quite a warning, but it comes from someone whose background means he understands the potential for FM in all of this. Originally trained as an engineer, Battle has amassed plenty of experience on a variety of corporate real estate projects, challking up more than 30 years as a consultant. He's also been lead partner for sustainability at Deloitte LLP.
The Social Value Portal is a relatively recent addition to Battle's CV, going live only two years ago. Prior to SVP, he set up The Sustainable Business Partnership, a sustainability-focused consultancy back in 2013. Battle has also worked with several FTSE 100 organisations developing sustainable strategies and social impact analysis (SROI) for major corporations. He was also involved in advising the Cabinet Office during the Public Services (Social Value) Act's initial development.
"I've known FM for a long time," says Battle, "and what excites me is that there's an opportunity at this very moment to redefine the role of the property / facilities manager."
FM's evolving role
Battle believes there are two ways in which facilities managers will increasingly engage in delivering social value. The first is through organising service provision through local labour and supply chains; the second is by working closely with their occupier or end-user client to deliver on social value commitments.
"That's kind of a new role for the facilities manager," concedes battle, who is convinced that FM conversations are likely to evolve from the resolution of traditional maintenance and physical environment concerns to become more about how FM can help its parent organisation, occupier or end-user client engage with their communities. FMs' role in developing well-being through the traditional standard comfort perspective - maintaining boilers, ensuring users' comfort, conducting repairs, and similar 'hygiene' issues - will remain; but successful FM will increasingly be assessed from a cultural outreach perspective as well - something that FM is already adept at. Witness, for example, the IWFM Awards success stories that talk of how local or economically disadvantaged people have been employed to great effect.
"The thing about your sector, and why it is so important to local authorities - and I should say that local authorities have been the key drivers of this - is that FM provides those really important entry-level jobs," says Battle.
"You can take on a long-term unemployed individual who can then move up to management or jump from industry to industry if they do well", says Battle, outlining one particular desired 'outcome' that's taken on real importance for local authorities.
"There are those who can get opportunities within FM that they can't get elsewhere. That's why I think FM has such an important role to play in working with local authorities."
Talk of the tom
Talk of outcomes is key to the structure of the TOMS framework, which at its core comprises a short list of five themes to which desired outcomes are appended. Specific measures are then aligned with each outcome and the idea is that these measures, once aligned to their outcome, are accepted by all as the means to demonstrate achievement of that outcome. Each measure can be assigned a financial unit value where the agreed value of, for example, employing a former young offender is taken from the government's own determination of what that should be. So in this example the theme would be 'Jobs', and among associated desired outcomes would be 'More opportunities for disadvantaged people'. The number of former young offenders employed would be the measure linked to this outcome, its associated financial value being the number of former young offenders times the value attributed to a former young offender. This would determine progress towards and achievment of the outcome that more opportunities for disadvantaged people are indeed being created.
"Every measure has a unit, and each unit a value," explains Battle, "so when you want to sum the total social value, you look at everything you're doing across this framework and just sum up the information. It's as simple as that. (Many of the unit values assigned to measures come from UK government data.)
"What's important is that people shouldn't compete on how to measure, but on how well they're doing," he goes on. "From an environmentasl perspective let's not argue about whether a tonne of C02 saved is costed at £15 a tonne, or £20 or £54. Let's instead compete on how many tonnes of C02 you can save through energy-efficiency measures. Or from a social perspective, how many opportunities can we give young offenders? Let's compete on how many volunteering hours we can put into our community, not [someone else's perception of] the value of that."
Competition derives from the total units of each measure delivered. So should one measure be the employment of people from a given local area, for example, 50 such people will be a better figure than 40, notwithstanding any variation between organisations of the financial value attributable to each individual in that number.
Licence to operate
"You're given a licence to operate by society when they trust you," explains Battle of an organisation's relationship with the public. It's about establishing a level of trust that arguably has been removed from some large providers by the public and others in recent years.
Battle talks of some firms' reputation being tainted "because people no longer trust them or what they say; and other big organisations have become terrified about getting into the same position."
In the private sector, firms like Legal & General are investing in social value reporting because they want to build trust in their own 'communities'.
"It's the community that buys their pensions and other products. It's all a virtual circle."
A market-specific methodology
A workgroup of key stakeholders has been set up in recent months to develop a specific TOMS 'plug-in' for facilities management. The group, which includes the IWFM, has the aim of developing a series of measures to provide an FM-specific industry baseline. (See more about measurement on p.26.)
"We need to agree a common minimum and get everyone delivering to that, because then we can compare performance. They [authorities, service providers] can all get better once we have a common measurement framework in place."
The impetus has certainly come from local authorities whose duty it is to maximise the value of every pound they spend for the community. Battle reckons a 20-30 per cent boost in additional social benefits can be obtained for every pound spent, at no additional cost to the authority.
Interest in the methodology is booming. Says Battle: "Since the beginning of the year we've seen a massive ramp up of local authorities adopting TOMS. We've so many incoming enquiries from local authorities wanting to sign up we can barely keep up with the pace."
What's more, the weighting that local authorities allocate to social value in the contracts they're bringing to market has also been growing.
"Organisations that want to work with some local authorities are seeing weighting within the tender process of at least 10 per cent and in some cases 20 or 30 per cent around social value," says Battle. So basically, if a firm is not considering social value in its offer it will not win that job, no matter the overall cost.
"Businesses working for the public sector are, as a competitive necessity, having to get on to this bandwagon and deliver."
While local authorities may have been responding to a legislative stimulus, the private and third sectors are now latching on to social value's potential. Battle cites financial firms Aberdeen Standard and Legal & General have adopted TOMS, while CRE firms including Land Securities and Argent are also working with it.
Investors in these firms are driving the change, says Battle, because they are seeking a return on their investment that goes above and beyond the financial. The pension fund managers investing in firms such as Legal & General, for example, are increasingly concerned to be seen reporting their activities having an impact that goes beyond a commercial one.
This, says Battle, is where talk turns to the widening issue of trust in business, or an organisation's 'licence to operate' (see box). Increasingly, businesses see a need to do more than just pay their taxes in order to earn the trust of the constituency for which they provide or within which they operate.
So, what's next for the SVP and TOMs?
"The original Social Value Act was very broad," says Battle. "But it did define social value as comprising environmental, economic and social well-being. It outlined that triple bottom line, and a framework within which environmental sustainability could fit - which is as a subset of social value."
As central government joins local government in forcing social value into procurement decisions, there's a sense that the greater visibility of social value can do more to make FM's overall value visible. But is there sufficient procurement expertise to make it happen? "Within local government the answer is that they're learning," says Battle. "But then local government is a million miles ahead of private sector procurement. I think the public sector has something very important to teach the private sector."
Interestingly, the Chartered Institute of Purchasing & Supply has just joined the Social Value Task Force, the open network of organisations comprising local authorities, the Crown Commercial Service and others to promote the social value service agenda. The involvement of CIPS adds to the sense that the procurement landscape, both public and private, is shifting to accommodate social value metrics.
At time of going to press, Guy Battle was meeting with the FM plug-in development group. If all goes well another such meeting will happen this month before the nascent plug-in is put to the test with stakeholders. If all goes well - and there is much to flesh out - the plan is for the TOMS framework's FM plug-in to become freely available this summer. Clearly, for Guy Battle there is no let-up in the ongoing social value revolution.