One of the benefits of developing brownfield land is often that the sites are already right in the middle of communities, because communities were built up around these factories and industrial areas. I live near Stoke-on-Trent and there's a few big factories been closed for years, but if you could invest in it would improve the whole area and lift perceptions.
Victoria Hills commented: “Valuing these things must be done holistically, which isn't just the GVA in a normal treasury sense, but it's the broader community benefits: employment, health outcomes, sustainable development goals, carbon credit. Getting that valued better would help create a business case, so the public sector might put their hand in the pocket and part-fund that, because local authorities are on the hook for rising adult social care. There's got to be something that actually makes sense for the broader public purse.”
Neil Murray agreed: “It’s knowing what the impact of the development’s going to be on the local population, for employment, for skills. What we try and do is give people data that shows that ‘if you do this and this, you're going to have much more chance for sustainable development’. Again, it comes back to having the holistic understanding of the potential impact of a development. It’s only by having that understanding that you can truly gauge and justify social value beyond simple calculations of financial return.”
Matt Chandler commented: “What we’re talking about is a social value calculator, which says for every pound invested by us, you’ll get £3 or £4 back into the public purse from business rates, council tax etc.”
Social value as a concept is maturing, the panel agreed, and Morgan Sindall as a Group has worked hard to achieve a leadership position in this area.
“You do see some really fantastic outcomes,” commented Pat Boyle. “In terms of whether it adds a cost on, we do have people with expertise in carbon forecasting and social value forecasting, working with communities. It’s not consciously something that we worry about, because it’s just the way we do business now.
We usually have people that work for us and build things in the communities where they live, dealing with a local supply chain. So, they’ve all got an investment in this, it’s not just filling in a form, there’s far more to it. And nowadays, employees want more than just a salary.” The panel concurred: authenticity is essential.
Pat Boyle reflected on the lengths Morgan Sindall has gone to in quantifying the social value delivered on any given project. The business uses a Social Profit Calculator that captures the social, economic and environmental value under two headings: Social Return on Investment (SROI) and Economic Impact. A broad range of benefits are measured to produce the final figure and go beyond the traditional measure of the Gross Value Added (GVA), which considers how project employment contributes to economic productivity and uplift of an area.
The fiscal savings to UK Government and taxpayers associated with reduced cost for welfare benefits, and health services are part of the holistic view. The economic impact is also considered in terms of Local Multiplier 3 (LM3) which accounts for how a project impacts upon local economies through spend on supply chain and employment.
For Duncan Cumberland, when it comes to brownfield, how the social value story is told may need to change. “We’ve focused too much on land value increase, but most of the schemes that I’m looking at now dream of a land value. We’re now working with authorities and partners, basically, we’re not calling it gap funding, we’re trying to find different ways and mitigations. What tools can we pool to do that? We’re talking about a position where we’re bidding into various bodies, the position of minus land values. That is really difficult.”
Duncan reflected that Newham is dotted with brownfield sites and is an exciting place to work, increasingly regarded as the epicentre of the next wave of regeneration in East London.
The Greater London Authority has underlined the point by moving there, to Royal Docks, and the area is experiencing rapid investment and change, driven by new infrastructure such as the Elizabeth Line and the availability of brownfield land.
Yet there are social challenges aplenty, including an acute shortage of affordable homes. In Newham Council’s own estimation, place-led regeneration has a huge role to play addressing complex challenges that exist across a borough which features some of the UK’s most deprived neighbourhoods.
“New homes are required to help overcome current challenges, which include a high rate of population churn and net out migration,” Duncan Cumberland explained. “Newham has some of the highest numbers of households in temporary accommodation and the second highest council housing waiting list. As many as 52 per cent of children in the area live in poverty, much higher than the London average.
We’re creating over 400 affordable homes at Manor Road Quarter, which equates 50% of the total number of homes being delivered, while driving social value in terms of jobs, apprenticeships and training. There’s significant spend in the local supply chain too, whether that be through labour or materials contracts. Relationships have already been formed with organisations such as Newham Works, an employment brokerage for local labour and local colleges.”
In this context, social value is critical. “The work in Canning Town, in terms of social value delivered, and social value reporting, is on a level I’ve never seen before. Morgan Sindall Construction are showing what can be achieved through brownfield regeneration. It includes meeting the first year’s apprenticeship target inside three months and much more besides. We have to talk about those achievements.”
To date, Morgan Sindall Construction has been focused on a broad range of social value outcomes, which includes significant spend in local supply chain and giving seven previously unemployed people jobs and awarding six apprenticeships. Other engagements have seen the contractor taking part in numerous careers and apprenticeship fairs, talks to Year 9 students, as well as being a key member of the ‘Moving on Up’ campaign that supports young black men in Newham. They have also taken part in practical advice sessions with students to help prepare for them for the world of work or education.
Richard Dobson of Morgan Sindall Construction reflected: “Creating employment supports the overall investment in the area, as does spending money with the local supply chain and community. All of the points can be monetized. The question we are asking though, is how do you use that data to access funding?”
Neil Murray commented: “If you take all these steps, you’re much more likely to achieve engagement with the local authority, you're much more likely to get support in the local community and then get them interested in the development. Success begets success, making any development more likely to have a sustainable future.”
From a Liverpool City Region perspective, Tracy Gordon said social value has moved up the agenda and is a bigger consideration in how they manage projects. “People have to demonstrate social value in every procurement. Policy has also been refreshed so more and more staff understand what we mean by social value. And we've had some lovely outcomes from some of the contracts we’ve been directly managing, particularly looking at apprenticeships for hard-to-reach groups.”
