New research has revealed that the UK construction industry delivered £1.1bn ($1.3bn) of social and local economic value in the first half of 2022, providing a 30.33% return on investment (ROI). Published by public sector procurement authority Scape, the new report highlights how social value delivery is evolving and becoming more sophisticated across the construction industry.
A total of 520 construction contracts with a combined total value of £3.6bn and ranging from £12,000 to £130m, were analysed to establish the scale and scope of social value delivery across the UK. The findings show that ROI is up by more than 10% compared with 19.55% last year, suggesting that the construction industry is committed to investing in (and bringing about) positive societal change. The result is a tangible impact on people’s lives.
At its core, social value is about listening to communities, understanding what they really want and fostering meaningful dialogue rather than simply pushing one-way communications that offer people no real opportunity to respond or push back.
“The [report] highlights how the construction industry is proactively delivering social value in the UK, which in turn is having a positive impact on society,” says Mark Robinson, group chief executive at Scape.
“Scape is proud to be leading the way in unlocking social value through public sector procurement across the UK by generating significant returns year on year and more value in the regions in which we operate. However, there is more to be done – at a time of economic uncertainty it is imperative that the sector works together to drive social value delivery for the benefit of both local communities and economies.”
The leading regions for social value investments in construction
From the figures, it is evident that the best-performing regions are those in which Scape has an increased number of live projects on site.
Areas in the north and east of England are outperforming the south, with the median social and local value added for projects at just over 25% compared with just over 10% for projects in London.
London has delivered high social and local value by utilising a broad range of measures, suggesting these organisations are seeking new and bespoke ways to meet their communities’ needs. However, projects in the capital are not delivering the highest economic value in terms of percentage of contract value.
The research also shows the difference in social value delivery by contract size. Larger projects with more time and resources to implement social value initiatives go on to create more opportunities for its delivery. It is more difficult for smaller contracts to achieve the same level of social value measures.
However, there is more to be done to ensure that social value delivery continues to grow across the UK. Government and local authorities need to be bolder in their social value requirements to encourage consultants and contractors to continually improve.
The report suggests that greater collaboration between organisations is key to maximising social value delivery. Research shows that the impact is magnified when the effort is shared – this is especially pertinent for smaller contracts where social value delivery is constrained.
The report also recommends a greater focus on community initiatives such as apprenticeships and jobs for offenders as they have a more significant impact on local people compared with local spending. There is clear room for improvement through a greater industry focus on collaboration and community.