Social value is set to transform the FM market, reports Martin Read.
07 January 2019 | Martin Read
Guy Battle, chief executive of the Social Value Portal, told an IWFM event last month that a 'quiet revolution' in social value is already leading to fundamental change in how facilities services are procured - and is about to turn the sector "on its head".
Battle told his audience, at the event held at Engie UK's London headquarters, that "something transformational" is happening in the marketplace - and that nowhere is this transformation more acute than in the world of FM. "Your industry is about to be turned on its head - and organisations that don't grasp this will get left behind."
The Social Value Act requires all public sector organisations to consider their economic, social and environmental impacts
when procuring services. Battle's service is an online portal that allows organisations to measure and manage the social value
that they generate.
Public sector organisations are fast expanding their commitment to social value. Two years ago, said Battle, the weighting afforded to social value in contract bid documents was at between five and no more than 10 per cent of the total consideration, and was dwarfed by issues such as price.
But now it's 20 per cent - and that's a standalone rating. If you're not carefully building social value into your bids, you will not win work in the future."
Moreover, the wider business world is following the trend with companies and private investors forcing the issue on to the private sector agenda. Battle cited the example of Legal & General, which is weighting social value activity at between 10 and 15 per cent on its multimillion-pound service contracts.
In the public sector, "what we are seeing is a kind of benchmark emerging," said Battle. "For every pound spent, the public sector now expects an additional 20 pence on social value as a minimum. And we're seeing that being delivered."
Why is social value increasingly important to businesses? "It's all about a sense of purpose," said Battle, "about people being able to show that they're doing more than just making their company money."
Battle, who has consulted on sustainability since 1993, compared the outlook for social value with how the traditional environmental sustainability agenda has developed over the past 20 years.
"These kind of headwinds - we just didn't see anything like this around sustainability."
Battle explained the Social Value Portal's existing TOM (themes, outcomes and measures) framework, detailing how its taxonomy of themes and outcomes allows clients to directly compare competing service providers based on quantifiable metrics such as, for example, the number of apprenticeships to be deployed contracts. In doing so, the framework addresses the problem of service providers seeking to offer their own, differing types of performance measures. On the Social Value Portal framework, "typically you might have anywhere between 15 and 20 outcomes.
"For example, more local people in local work support for free GCSEs, voluntary community activity, carbon reduction. We have two or three measures per each outcome, so every single measure has a unit, and a unit has a value. 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."
IWFM has played its part on the national social value task force set up by the Social Value Portal, and out of which the framework was devised. Councils are now adopting the framework across the country.
Although sector-agnostic, the Social Value Portal has begun developing sector-specific 'plug-ins' for its framework and is working with IWFM on just such a plug-in. A steering group is looking at the themes and outcomes specific to FM "to reflect what your industry can do and what you think you should be judged on," explained Battle.
A workshop in February will consider measures and discuss how the sector can come together "to develop a minimum standard that we can all report against".
Now is the time for social value - but measurement remains problematic
Jamie Quinn, corporate responsibility and environment director for event hosts Engie, described the problems identified in an IWFM forum event earlier in 2018. These were a lack of consistency in how people and firms defined social value; a lack of consistency in measurement methodology between competing service providers; and the understanding of social value varying between clients and procurers of service.
Said Quinn: "If you look at broader social legislation - on modern slavery, the living wage, the gender pay gap - there's an increasing expectation that business has a role to play in understanding how it can be an active player in addressing these social and legislative issues."
"You can talk about the direct measurement of employing people on local economic regeneration, and you can identify the fiscal impact - for example, we save the state X on benefits when we get someone into the workplace. But the tricky area is around indirect measurement: how do you qualify the fact that an individual now feels more confident to interact socially, to get involved in the world of work, and to no longer rely on benefits? How do you measure that? It's difficult."