How to Achieve More ‘Social’ Value for MoneyThursday 14 April 2016

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Welcome

Housekeeping

Fire exits – no planned fire drill

Mobile phones

Get involved

Follow us: @PellingsLLP

Tweet your questions using: #PELCPD

Cllr Jack Hopkins

Cabinet Member for Jobs and Growth, London Borough of Lambeth

@JackHopkins_Lab

Peter Holbrook CBE

Chief Executive, Social Enterprise UK

@peteholbrook

Indra Pooran

Manager, Black Training and Enterprise Group (BTEG)

@BTEG_LDN

Nigel Goddard

Director of Building Surveying, Pellings

@PellingsLLP

#PELCPD

Speakers

Cllr Jack Hopkins

Cabinet Member for Jobs and Growth

London Borough of Lambeth #PELCPD

Peter Holbrook CBE

Chief ExecutiveSocial Enterprise UK

ChairSocial Enterprise World Forum 2012-15

"There is one and only one social responsibility of business - to increase its

profits.“Milton Friedman

TRUTTrust in institutions to operate in society’s best interest

Profit Social

Motivation

UK State of social enterprise 2015:

78,000 social enterprises

>1 Million staff employed

39% based in deprived areas

53% grew compared to 28% of SME’s

57% predict growth next year

40% led by women, 14% by a BME leader

75% actively involve beneficiaries in governance

£36 billion to the UK economy

Examples of joint working co-commissioning and social enterprise

Coin Street Community Buildrers

Education

Social care services

Housing Charities

Health

Leisure and culture

Corporate Responsibility

Philanthropy and

investment

Consumer choice

What can the

public sector do

support social

value?

History of the UK movement – UK government

• Prime Minister Tony Blair commits to supporting social entrepreneurs in his first policy speech1997

• UNLTD* launched to promote and develop social entrepreneurs with £100m endowment2000

• Social Enterprise Unit formed as part of the Department for Trade and Industry2001

• Social Enterprise Coalition (now Social Enterprise UK) established2002

• Community Interest Companies (CICs) - legislation to create a new form of corporate entity introduced2005

• Social Enterprise Investment Fund - £100 million fund established for investment in new and existing social enterprises delivering health and social care services

2009

• Right to request introduced to support National Health Service staff establish social enterprises 2009

• All main parties manifesto’s have strong commitments to social enterprise –

• Social Enterprise features in the Queen’s speech.2010

• Government commits that 1 in 6 public sector employees will work for staff owned social enterprises and mutuals

2011

• Community Rights to Challenge, to Bid and to Build enshrined in the Localism Bill

• First ever Social Impact Bond launched2011

• Launch of Big Society Capital with £600m of investment for social enterprises and charities.2012

• Passing of the Public Services (Social Value) Act

• Prime Minister David Cameron launches the G8 Social Investment Taskforce2012/3

History of the UK movement – public policy

• European Commission establishes Social Business Initiative across 3 DG’s - a top EC priority to 20222013

• EU procurement directives amended - thresholds increased, health, social care markets can in part be pro-social enterprise / mutual, social value principles reinforced.

2014

• Social Investment Tax Relief - 30% personal tax relief for investors in CICs and charities up to £5m 2014

• Social Value Act review by UK Government, Procurement Reform Act enacted in Scotland2014

History of the UK movement – public policy

• Lord Young chairs review of the Social Value Act – central government guidance strengthened, a further review within 18 months2015

• All main parties manifesto’s have strong commitments to social enterprise –

• “the Conservatives will make it easier to set up and run a social enterprise”

• “the Conservatives will enshrine a ‘right to mutualise” for public sector workers”

• Housing associations

2015

• Dormant Assets Commission established

• Channel 4 future explored … is social enterprise an option?

• Is the social enterprise policy momentum beginning to fade? 2016

Public Services (Social Value) Act 2012

Establishing ‘social value’ principles in

public procurement

UK = £100bn per

year on Government

procurement

“Today, successful businesses must play a catalytic role, not only managing our own economic, social and environmental impact; but

creating value for all our myriad of stakeholders in collaboration with others...and responsible business and commercial success can be driven

simultaneously” Paul Walsh, CEO Diageo

“Any business that does not internalise social and environmental challenges is talking to itself and will, eventually, be rejected by its customers and its staff”

Paul Polman, CEO Unilever

Management is doing things right; leadership is doing the right things

Peter F Drucker

“Coming together is a beginning; keeping together is progress; working together is success.”

Henry Ford

PwC

Johnson & Johnson

Interserve

Wates

Zurich

RBS

Santander

The £1billion corporate challenge:

£1,000,000,000 of procurement spend by 2020 through social

businesses

£1,000,000,000 of procurement spend by 2020 through social businesses

www.socialenterprise.org.uk

peter.holbrook@socialenterprise.org.uk

tweet @peteholbrook

Indra Pooran, Manager

Black Training and Enterprise Group (BTEG)

indra@bteg.co.uk

www.bteg.co.uk

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“Legacy Challenge”

Nigel Goddard MRICS APMP MAPM MIoD

Partner & Director of Building Surveying

Pellings LLP

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About Pellings – Who are we?

■ Integrated design, property and construction

consultancy that is passionate about making

a difference

■ Multi-disciplinary practice of Architects and

Planners, Project Managers, Building

Surveyors, Cost Consultants, and

Sustainability and Health & Safety advisors

■ Predominantly working in the Housing and

Regeneration, Education sectors

■ Equally comfortable in the new build and

remodelling/refurbishment arenas

Accreditations

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Key facts

27% - proportion of government’s reported procurement spending

that reached SME’s in 2014-15

£4.9bn - government reported procurement spending directly

with SME’s in 2014 – 2015

Number of SME’s working on government contracts Unknown

Source: National Audit Office report 9 March 2016

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SME Definition (confused.com)

■5.4 million SME’s operating in the UK

■EU commissions definition:-

• employs fewer than 250 people

• has annual turnover less than or equal to £39m

• has a balance sheet of less than or equal to £33m

Micro Business = less than 10 employees & turnover under £2 million

Small Business = less than 50 employees & turnover under £10 million

Medium Business = Less than 250 employees & turnover under £50

million

So depending on which definition you use an SME could have anywhere between 50 and 500

employees and have a turnover between £6.5 million and £50 million. One thing that virtually everyone

agrees with is that SMEs account for more than 99% of all UK business and that they employ over 12

million people.

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‘Theseus’ Paradox’

Theseus' paradox, is a thought experiment that raises the question of

whether an object which has had all of its components replaced remains

fundamentally the same object

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‘Triggers Broom’

A Personal Journey………….

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Project KPI’s or CSR commitments?

Project KPI’s

Evaluated project by project

■Waste Disposal

■Resident Satisfaction

■Time

■Cost

■Quality

Program ESP Commitments

All based on a per annum spend

■Work placements 14-16

■Work placements 16 -19

■Curriculum Support

■Apprentices

■Locally advertised employment

■Subcontractor NVQ’s

■Sub contractor training plans &

Support

Where is the connection?

What difference does this make at an estate level?

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Contractors viewpoint?

The “fears and concerns” around meeting Community Investment

Aspirations/Commitments

■ We don't currently understand the priorities and when we do, we need a Plan

■ We won't set up a Community Investment Group to drive the process

■ We won't see Community Investment as a priority, as there will be too much focus on the delivery the

works programme

■ The size and speed of the works programme drives the Construction Partners commitments

■ We haven't got a plan that balances cost/benefit of the investments we make or where we invest

■ We will not link to the needs (and constraints) that colleges have regarding training and apprentices

■ Delays getting projects to site, with cash flow constraints will hinder community investment

commitments

■ We are all competing for the same people in terms of training and apprenticeships - "fishing the same

pond“

■ We will fail to ensure that the Supply Chain buys into our Community Investment approach

■ Partner Contractors have over-promised in their tenders

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Supply chain viewpoint?

■Cash flow and payment terms?

■Who bears the costs of

apprentices and CSR?

■What does being local mean?

■Longer term view – historic

delivery

■Lack of consistent work flows

■All about price

■De-valued labour supply

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Consultants view point?

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Context for Social Value

‘‘What is critical is that every penny of housing investment is spent

effectively and in a way that delivers the most benefit for people, their

communities and society as a whole’’

Kris Hopkins MP Minister for Housing

Communities Count: The four steps to unlocking Social Value

Social Enterprise UK report June 2014

Measuring the Social Impact of Community Investment: A guide to using

the wellbeing valuation approach

HACT March 2014

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Lambeth ESP TargetsWelcome to HACT's Value Calculator. This simple excel tool will support you to apply the values

in the Social Value Bank to your community investment activities.

•the Value Calculator sheet is where you enter your data and the crunching happens behind

the scenes

•the Results sheet provides a handy summary of your impacts

•the Description and Evidence tab explains each of the values and the evidence you need to

apply them

•the Relationships tab lets you know which values you can apply together

•And the surveys are all here which you can do before and after your intervention to tell you

which values you can apply.

The Values used within this tool were generated with the generous support of Affinity Sutton

and Catalyst.

We hope this tool helps you to make the most of the Social Value Bank. We would love to hear

what you think of it and any suggestions for improvements.

Get in touch at:

020 7250 8500

info@hact.org.uk

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What does the delivery of £46m look like?

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■We are now monitoring these ESP based Contractual obligations using

the HACT Social value matrixes via Lambeth Livings Community

Investment Core Group, and which based on the 15/16 construction

spend of £46m within Pellings remit, should generate a potential Social

Value outcome of some £221k approx.

■Pellings view however is that the ‘ESP commitments’ alone do not go

far enough in establishing a lasting focused community based

legacy in the areas where construction activity is undertaken at estate

level.

“Construction activity should be the catalyst for a more connected

Social Value Chain, that exists well before works are on site, and

continues well past its completion’’

What is the reality?

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Throwing rocks in a pond?

What of the Local Impact!

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“CBS” – or Community Business Support

‘..the growing value of the private sector in creating social value in

supply chains becomes as critical as direct delivery…’

Partnerships to deliver projects increasingly involves the private sector, with

respondents reporting that work with the private sector tended to have greater

business and or/employment focus. Examples included:-

■ Delivering social enterprise assistance programmes

■ Increasing the capacity of local SMEs to become part of the supply chain

■ Creation of apprenticeships

■ Providing business support and start up advice

■ Advice to organisations in regard to social value, social enterprise and

innovation

■ Providing sponsorship for social value schemes

Communities Count – Social Enterprise UK 2014

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Developing a Social Value Chain….

Local Business/Social Enterprises with

capacity for growth

Corporate CSR ££ commitments

related to construction

activity

Access for Local Business to a full range of low cost business planning

resources, skills and potential funding for

local employment and CSR strategies

Employ more staff

Training & apprentices

Further localised

CSR

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Community Business Support (CBS)

Local CBS Hub

Community initiatives

Contractors ESP Plans

The Local CBS Hub is the driver of, and can be driven by,

a) the specific Contractors ESP plansrelated to individual construction contracts, and

b) the current and proposed local Community Initiatives on the ground, such as incubator support, youth and employment engagement etc.,

with the aim of having a wider impact and delivering longer term sustainable outcomes for local business and residents, measuring key outcomes against social impact criteria

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Pellings objective is to see how collective CSR pledges and cash

value contributions can be used to engage more widely with the local

communities, and enable a much more diverse set of business support

and capacity building exercises in line with Lambeth’s strategic growth

objectives

Pellings Solution……Lambeth Pilot

LegacyChallenge

Creating a long term and sustainable legacy of business and jobs growth to develop thriving local communities

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‘All good men and women must take responsibility to create

legacies that will take the next generation to a level we

could only imagine’ – Jim Rohn

Our Aims

■ Using the HACT Social Value matrix as a benchmarking vehicle, we will

endeavour to provide a 400% return of ‘social value outcomes’ to every

pound of financial contributions into a Legacy Challenge Fund, with key

deliverables focussing on local business growth, job creation and

retention of staff

■ To establish a ‘physical and scalable hub facility’ for the long term benefit of the

local community

■ To support a diverse group of business and social enterprises meeting the

needs of the residents and business

■ To be a fully established and self sustaining umbrella C.I.C.

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Each challenge - Outcomes focused

■4 new social enterprises or new businesses established and supported

over a 12 month period, and with sustainable business plans in place

and 3rd party funding brokered

■Up to 8 local business supported over a 12 month period with the

agreed and deliverable target to improve turnover/profit by 10% p.a.

■Of the above

■ At least 1 initiative aimed at supporting young people and/or led by

Young Entrepreneurs

■ At least 1 initiative aimed at supporting the BME Sector

■ At least 1 initiative aimed at supporting Women in Construction

■ At least 1 initiative aimed at supporting Ex Military and service

personnel

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CBS ‘HUB’ – Member Structure

Clients

Construction project commissioners

PellingsConsultants

Specialist service providers

Assist with Solutions

Construction Partners

Delivering works on site

Sub-contractor

supply chains

GATEWAY PARTNERS

Social Investment and Community Engagement

Other potential partners

• Santander Bank

• Specialist finance providers

• Auditel

• CIOB/RICS

• Local FE Colleges

• Business in the Community

• Social Enterprise UK

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Gateway Partners – Co-ordinated activity

Legacy Challenge

hub

Supporting young people

Supporting the BME sector

Supporting Women in

Construction

Supporting Ex Military

and Services Personnel

www.londonyouth.org.uk

www.wishgb.co.uk

www.heropreneurs.co.uk www.bteg.co.uk

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‘Step on or step-up’ – Providing solutions to any journey

Enablement

Aspiration building and getting people work ready through CV support, life skill coaching etc

Apprentice

Coaching/mentoring and project management to capture and support an entrepreneurial intent

Start –up

Developing enterprise through incubator support to achieve the first £100k p.a. turnover

Growth

Working with business to achieve a high margin £1m p.a. turnover business

Quest

Increasing the valuation of £1m -£100m turnover business by £1m over 1 – 3 year duration

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James Dublins’ Story…

Tick a box or make a difference??

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Thank you

Any questions?

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