This week, Social Profit Calculator, along with our partners Pagabo, Kier Construction, RLB and Akerlof, were delighted to take home the 2020 Offsite Award for Product Innovation for our Smart Construction Calculator, and although owing to “these unprecedented circumstances” we weren’t able to attend in person, we managed to celebrate nonetheless.

With our fresh success in mind, it seems like an ideal opportunity to introduce our Smart Construction Calculator in a bit more detail and explain why for SPC as a social value company, we are excited about the smart construction revolution.

Modern Methods of Construction (MMC, or ‘smart construction’) is a wide term, embracing a range of offsite manufacturing and onsite techniques that provide alternatives to traditional house building. MMC includes whole homes being constructed from factory-built volumetric modules, through to the use of innovative techniques for laying concrete blockwork onsite. It has been promoted as a way of working more effectively to achieve more without using more.

The Industrial Strategy Council recently repeated the long-known fact that differences in productivity growth and wellbeing across the UK are still shamefully large and regional imbalances continue to grow. It is a crucial time for the building industry and the dynamics are complex, but the government aims to “level up” the UK economy as it shifts from crisis management to recovery with the prime minister promising to “build back better”.

There are a number of problems within the construction sector that underpin the political drive to modernise the sector. Poor levels of productivity and delivery timescales, rising costs, declining workforce and greater carbon emissions and other environmental impacts.

In an attempt to accelerate momentum within the construction industry, we have developed a social value calculator tailored  to constructors and clients exploring smart construction approaches. It enables quantitative assessment and visualisation of social value, capturing the social impact beyond the site domain, including manufacturing within the supply chain. Our data is based on an extensive benchmarking exercise using historic data from previously completed projects in order to produce accurate estimates of the social value returns from a smart construction project. We have adopted a holistic approach that advocates design should be focussed upon wider considerations beyond manufacture and assembly to extend to broader outcomes, such as sustainability, social-economic impact, quality of life, operational performance and whole-life value.

Users of our tool will have access to functionality to, from a client’s point of view, assess the quality of submissions against the forthcoming procuring for value agenda, and from a constructor’s point of view, align with client needs and target areas in line with their expectations. It is our ambition for our Smart Construction Calculator to be a one-stop-shop for everyone in the sector looking to target their smart construction project’s social value offerings, as well as an understanding of cost, timeframes and whole life value.

The opportunity for social value then is about how a move away from traditional building methods opens the door to deliver social value in a broader way. Traditional building methods tend to create value that is limited to the project’s surrounding area. Smart construction has the potential to generate value in deprived areas in greater need with the strategic placement of project delivery sites by creating new employment opportunities and sustaining existing employment in the area. Offsite construction will result in longer comprehensive training for apprenticeships, creating stronger education and skills programmes, and in turn more social value. MMC has the potential to reduce the environmental impact of projects by reducing waste, reducing carbon emissions and allowing the delivery of low-impact buildings. Using smart construction techniques, we can come to expect that projects will begin to generate more social return on investment, and more economic impact while simultaneously lowering the level of environmental impact.

This is the smart construction revolution. We are delighted to be a part of it.

Delivering social value is the cornerstone of what we do as we continue to support our clients to enhance their contribution to society. Through our approach and methodologies, we enable our clients to capture the societal and environmental impact of their activities and operations.

Prior to the pandemic, social value was becoming an increasing part of corporate social responsibility, economic and procurement narratives. The post-COVID era, however, paints a very different picture. For many businesses what’s left of 2020 will be a question of survival, and few will be in a position to deliver the aspirations that they might have had at the end of last year.

The UK economy has experienced a significant shock since the start of the COVID-19 pandemic, driving the UK into recession. GDP has fallen dramatically, -24.5% below the level of February 2020 in May this year. Production, services and construction still remain well below their February 2020 levels. As of August, approximately 9.6 million jobs were furloughed in the UK as part of the government’s job retention scheme and the number of people applying for universal credit has soared.

These current figures are only the tip of the iceberg, with the British Chamber of Commerce (July 2020) reporting that 29% of UK businesses plan to cut jobs in the next three months as the Coronavirus Job Retention Scheme is wound down. This would be the highest percentage of companies making redundancies since it began tracking employment intentions in 1989. The government’s OBR has forecast this could lead to at least 10% or as much as 20% of jobs furloughed on the scheme to be lost, with the unemployment rate reaching 12% before the end of the year. It is, therefore, not surprising that job insecurity is on the rise, with more workers saying it’s likely they’ll lose their job. Almost 6 in 10 say their financial security has become worse since the pandemic, with many furloughed workers having little indication of when they can return to work.

COVID-19 has exposed the weaknesses and inequalities in every society

Although we are seeing a gradual easing of lockdown, the virus has ruthlessly exposed gaps between the haves and the have-nots across the country and we are witnessing only the beginning of the economic and social implications. 

The people who have been worst affected by the virus are those who had worse health outcomes before the pandemic, including people working in lower-paid professions, those from ethnic minority backgrounds, and people living in poorer areas residing in overcrowded accommodation with limited access to personal outdoor space. Whilst it’s been known for years that these groups typically have worse health outcomes, shamefully, it has taken a global pandemic to draw attention to these deeply entrenched health inequalities, and it will continue to discriminate against the most vulnerable as the socio-economic effects will be with us for some time.

Time to get serious about social purpose

While the economic landscape is testing, we have witnessed the strength of collaborative action between business, the public sector and charities working together. It is crucial that we do not lose this venturing into “new normality”. 

The government has a number of key infrastructure and construction projects to come over the next ten years, with a total construction spend of £500 billion by 2030. Buildings have a direct impact on quality of life and long-term emission reduction goals. The construction sector is, therefore, at the core of a post-COVID recovery that can catalyse a transition to fairer more sustainable economies and must strive to make more sustainable local economies and healthier and more enjoyable places to live.

Fundamentally, buildings need to meet the needs of those who use them. Contractors bidding for work, or developers looking to become a development partner, will need to deliver more social outcomes. They will need to do more to capture and measure the social value of their initiatives to secure commercial success. This calls for the big corporations to be transparent when setting out their corporate purpose and to translate this into a strategy and real action.

A recent report from Social Enterprise UK summarising in-depth research across local government found 82% of councils believe spending public money focusing on social value, rather than cost alone generates higher levels of growth. So, it is now more important than ever to get serious about delivering real social value in partnership with communities, successfully incorporating local employment and ‘building back better’. 

Building back better means doing more than getting economies and livelihoods quickly back on their feet, but instead triggering investment and behavioural changes that will reduce the likelihood of future shocks and increase society’s resilience to them when they do occur. Doing this well requires a meaningful commitment to equality and inclusion, alignment with long-term emission goals, factoring in resilience to climate impacts, slowing biodiversity loss and increasing circularity of supply chains across the project lifetime from inception to long-term legacy impact. If adopted faithfully and based on local need rather than simply a checkbox exercise, this will create a very strong social purpose with the potential to enhance community resilience. Along these lines, social value will become a vital priority on the back of which we will hopefully see the creation of a whole new social contract.

We have an opportunity to evolve. As the need for social value-driven projects is made more and more apparent, it is time that we all, practitioners, contractors and clients, stop thinking of social value as simply something that must be demonstrated. In the past, social value has often been seen as a “tick box” exercise: you must create five new apprenticeships, for example, to win a project, regardless of the specific needs of the community. We can start to move away from this standardised approach to social value and think instead about delivering the social value that is right for each project, and each community in which the project sits. This is part of the Construction Leadership Council’s Procuring for Value Toolkit and promises to become an influential part of our industry in the coming months and years. This means that social value can meet the community’s real, as opposed to perceived, needs and ensure that the work that is being delivered offers real impact.