The National Social Value Standard has launched a new social value measurement framework with the help of economists at social value software organisation Loop
A series of significant updates has been made to the National Social Value Standard, helping the measurement framework to set a gold standard of procurement.
New measurements are continually being added into the standard to stay on top of changes. The materials were included in the new HM Treasury Green Book wellbeing guidance, released in July 2021, and opened a new standardised approach to measuring social value.
With social value forming a key feature of the Construction Playbook and the requirement for central government tenders to give a minimum 10% of their evaluation criteria to social value, it is increasingly vital to understand how developments can offer the most to their local communities and industries.
The update includes social values into three impacts- social, environmental and economic – to create a clearer framework structure
The new measurement framework contains more than 800 metrics – 90% of which are monetised – which is increasingly important for winning works and for procuring works through frameworks.
To make the metrics more user-friendly and consistent, they have been reorganised under five headings of:
- Jobs, apprenticeships and placements
- Workforce wellbeing, training and skills
- Supply chain
- Community, charity and other stakeholders
- Environmental
The clarification of terms in the social value measurement framework has also touched on deadweight, attribution, displacement, discounting, inflation, duration and drop off.
Following the recommendation of the HM Treasury Green Book, a new factor of marginal utility of income has been added to the metrics. This considers that the value of an additional pound of income is higher for a low-income recipient and lower for a high-income recipient.
Loop, which uses the framework across its software, has used its expertise in the field into developing the standard. Every outcome and every grouping has been carefully reviewed by Loop’s economists in line with the latest academic and government thinking.
A number of monetised metrics have been developed specifically to capture the positive impacts that a greater use of MMC can bring
For example, under the environmental heading, the monetised waste metrics have been significantly built out, with changes in waste treatment between all levels of the waste hierarchy leading to specific values – 39 in total.
The standard also allows tracking of negative values, supporting the framework’s push to mitigate overclaiming.
Allowing users to use metrics that generate a negative value, such as the ‘made redundant/dismissed’ metric, and enter negative inputs for certain metrics, such as CO2e emissions, is a key step towards measuring a more accurate view of social value.
The update to the social value measurement framework will provide a more robust assessment of positive impact
Ken Chalk, principal economist at Loop who worked on the National Social Value Standard, said: “We decided it was time for the development of this new version as social value methodologies and understanding continues to mature. Whether that is new methodologies being developed or a more sophisticated and tailored use of existing approaches, the aim is increasing the robustness and accuracy of the framework.
“The changes made are vital to ensure a more accurate, HM Treasury Green Book aligned, representation of social value, that can then help drive more efficient creation of positive impacts.
“We are confident that the update to the framework has ensured there is a more comprehensive and diverse range of metrics and valuations available, and we look forward to hearing feedback.”
Gerard Toplass, group CEO of Loop’s parent organisation The 55 Group, said: “Social value is an ever-changing space that continues to develop to reflect the social, environmental, and economic world that we live in. It is vital that this continues to be the case in order to increase the robustness and accuracy of forecasts and estimates.
“At Loop, we are proud to use the National Social Value Standard framework as, with these updates, we believe it is the broadest, most robust, and most accessible framework available.
