The social benefits generated by providing safe, affordable housing for those in need have always been a priority for housing associations.
And the revolution in social value requirements that began with PPN06/20 and which will take a big leap forwards with the upcoming Public Procurement Bill, poses a lot of challenges for the ways that the social housing sector has traditionally measured and reported its impact.
But as organisations that are already very attuned to the ideas that underpin social value, these changes also represent opportunities that housing associations are well-positioned to take advantage of.
How Do Social Value Rules Affect Housing Associations?
The concept first entered law in the Social Value Act 2013, which required all public sector commissioning bodies to “consider” the “economic, environmental and social wellbeing of their population through their procurement activities”.
PPN/06 20 and the accompanying Social Value Model – published in September 2020 – brought about a key change. From then on, rather than simply “considering” it, central government bodies were obliged to give at least 10% weighting to social value considerations in awarding contracts.
The Social Value Model goes a long way to making this a far more measurable set of criteria, detailing policy outcomes under five themes:
While this requirement hasn’t become law for local authority commissioning bodies, it’s highly likely to include them in the near future:
- Many suppliers and local bodies are adopting the required standards or higher voluntarily
- The National Procurement Policy Statement, published in the summer, is clear that all commissioning bodies (including housing associations) will be expected to take the three social value national core priorities plus any specific local priorities into account
- The Public Procurement Bill announced in May’s Queen’s Speech is expected to take the NPPS forward
- PPN06/21 is clear that housing associations are expected to produce Carbon Reduction Plans when bidding on public contracts worth more than £5m – there’s no distinction between central and local tenders
- The government’s Clean Growth Strategy has challenged the sector to get all social housing stock – new and old – to EPC C rating by 2035
The direction of travel is clear. Social value is here to stay, and housing associations need to prepare themselves.
The Challenge Facing Social Housing
Housing associations provide homes and support for nearly 6 million people nationwide – but according to the National Housing Federation’s 2020 “People in Housing Need” report, a further 3.8 million are on waiting lists in England alone.
As the long-run economic effects of Covid-19 make themselves felt, that number is likely to grow, as people lose their jobs and eviction bans end.
And yet social housing construction is at an all-time low due to budget pressures. In 2019, only 6,338 new social housing units were built. How can the sector be expected to take on all these new social value responsibilities when it’s already so stretched?
Is Social Value Actually The Solution?
In fact – as we mentioned at the very start of this blog – housing associations are already highly aligned with the emerging social value agenda.
Had you realised, for example, that better social housing provision contributes to the majority of UN Sustainable Development Goals (1, 2, 3, 4, 6, 7, 8, 10, 11, 12, 13 and 16)?
The challenge housing associations face lies less in ensuring that their work hits the social value thresholds, and more in capturing and reporting the full extent of their impact under the new framework. Especially when budgets are tight, accurate measurement becomes critical.
And yet a recent Social Housing survey found that 80% of senior people in the housing sector believe that financial measures are given too much prominence in reporting and social value too little.
The same research found that a high proportion of housing associations depend on their own systems for measuring social value:
These in-house systems may no longer be up to scratch as requirements continue to evolve, and could be missing important aspects of what today’s social value regime is looking for.
The new social value landscape calls for a new approach to capturing, analysing and reporting the impact of housing associations’ work. That was something that Lewisham Homes – a major social housing provider in south-east London – came to realise.
The social value of their work is spread across a huge range of initiatives, including community investment activities, financial management support, welfare calls to residents, and apprenticeships – not all of which can easily be ascribed a financial value.
As a partner in the multi-agency “Lewisham Deal”, Lewisham Homes needed to come up with a system for quantifying those outcomes that made it easy to collect data from initiatives and assess them for impact – to hold itself accountable for what it achieved.
Using Thrive’s social value module, Lewisham Homes was able to develop a set of bespoke metrics that reflects the full value of their work. Due weight can be given to the inclusion of local voices, to community-level improvements, to decarbonisation, and more.
Over the last two years, Lewisham Homes has been able to demonstrate £8 million in social value generated within the communities where it works.
That proof makes a big difference when it comes to bidding for public contracts and securing funding.
What Should Housing Associations Be Measuring?
Social value is a broad topic, as the five themes presented in the 2020 Model show. Organisations that have become used to financially-focused reporting may need to rethink how they present their work:
- Are jobs being created for local people?
- Are residents’ voices being heard? Are they involved in decision-making?
- How is your work contributing towards carbon reduction goals?
- Are you creating opportunities for disadvantaged groups?
- Does your work take note of the need for green spaces and places to exercise?
- What contribution is it making towards Covid-19 recovery?
- Are you sourcing from local businesses? Do your suppliers deliver social value?
All these factors increase the social value your work delivers, but they need to be quantified in meaningful ways.
At Thrive, we use the Impact Evaluation Standard, a measurement tool that uses 52 metrics aligned with the Social Value Model, plus a further 50 important indicators.
Not only that, our framework can be customised to include your own KPIs – just like Lewisham Homes did – giving you robust, recognised measurements that capture every nuance of your community’s particular needs.
Social Value UK defines social value as “the quantification of the relative importance that people place on the changes they experience in their lives”.
As social value becomes embedded more and more deeply into every aspect of the social housing environment, the importance of measurement and quantification is going to become crucial to every housing association’s work.