COVID-19: “Social value needs to gain more relevance as a key policy objective that underpins future economic recovery”
The Covid-19 outbreak is having profound economic and social impacts with the prospect of the worst contraction of the economy in centuries, as warned by the Bank of England, looming on the horizon.
This includes the loss of jobs and income, the disappearance of businesses that may not recover, negative consequences of people not being able to continue with their education as planned, potential health and wellbeing impacts from social isolation, losing family members and friends, and the inability to receive medical care for non-Covid-19 related reasons.
The virus is having, and will continue to have, wide-ranging implications for communities and society. In this context, social value needs to gain more relevance as a key policy objective that underpins future economic recovery.
As we slowly come out of the current crisis, economic recovery should be prioritised in a way that promotes inclusive growth to maximise social value. This will require specific social value objectives that go beyond those promoted through the application of the Social Value Act and the National Themes, Outcomes and Measures (TOMs) Framework, the minimum reporting standard for measuring social value.
With significant progress being made in recent years in bringing the importance of social value to the forefront of procurement and numerous organisations through appointing ‘Heads of Social Value’, we are in a unique position to build on this and expand the role of social value from procurement to the focus of economic recovery.
While the focus of delivering social value so far has been on temporary impacts delivered through procurement – for instance, providing apprenticeship opportunities, engaging a diverse supply chain or community outreach events – it needs to focus on the wider long-term cumulative outcomes of future policies and investments.
As we move into the recovery phase in a post-Covid-19 world, central and local government should prioritise new measures of social value that truly reflect the value to local communities over the short and long-term. National TOMs, the key guidance for measuring social value delivered through procurement contracts, has been quick to update its guidance including new Covid-19 indicators focused on job retention, a more welcome and appropriate measure for the current circumstances where hiring has frozen across most businesses. However, there is much more to do in defining social value-related outcomes.
Focusing on social value, and expanding what we mean by it, will enable us to implement more inclusive policies that tackle the inequalities exacerbated by the current crisis. It has become clear that those in lower income jobs are being hit the hardest. Nearly 80% of workers facing job insecurity do not have a university degree, according to research by McKinsey. Jobs in the retail and hospitality sectors are particularly affected as well as those in the gig economy.
Economic recovery plans need to focus on this key issue and tailor the meaning of social value to local objectives to make sure that local communities are benefitting from any new policies and ensure that no-one is left behind. Stakeholder engagement and policy co-creation should be key tools for economic development policies. While the HM Treasury Green Book already offers a broad definition of social value including economic, social and environmental impacts, the interpretation of social value needs to go further and be developed at a local level.
Achieving greater long-term social value through economic recovery policies requires a greater understanding of the drivers of social value in each local context, including the interaction and synergies of cross-sectoral policies. Social value can be achieved through multiple drivers including education policies, provision of decent jobs, delivery of key infrastructure, energy policies that provide energy security and investments in accessible green spaces for all demographics, just to name a few. A wide range of options are available for local authorities and others. These should be considered as part of a programme that takes account of the interplay of different policies and schemes.
Finally, improving how we capture and monitor these policies and investments over time will be key. This will require enough resources as well as new approaches and indicators, which can be developed at a national level to ensure consistency. Monitoring and evaluation is the only way we will be able to assess our performance and, although budget is usually not prioritised in this space, it should not be forgotten to enable us to continue learning about the true value of different policies to communities and society.
I am also looking forward to the findings of the IED’s social value in the construction industry research project, involving Arup and other partners.
Adriana Moreno Pelayo is Associate – City Economics and Planning at Arup, a member of the Institute of Economic Development