More than £15bn of social value from UK developments is being lost each year owing to a lack of understanding as to how this value is measured and generated, according to a new report.
The report, produced by the British Council for Offices in partnership with Legal & General Investment Management and the Social Value Portal, says a focus on financial contributions under section 106 to mitigate a development’s negative effects on the community are leading to missed opportunities for social value.
Social value is defined as the delivery of goods, services, works and utilities in a way that benefits society and the economy, while minimising damage to the environment.
The report highlights several case studies which show that social value can be delivered at no additional capital cost, although it could have an affect on programming and procurement process for the construction and building management contracts.
One example was LGIM’s 245 Hammersmith Road, W6, where the opportunity for social value was figured at almost £40 sq ft pa, equating to almost £80m over nine years. By comparison, the total S106 contribution was £1m.
Social value may be created at every stage of a building’s life cycle, although the largest and ongoing contribution is made during occupation, through building management decisions and occupier engagement with the local community.
Where materials and labour are sourced during manufacture and construction is also significant, as is the design team and contracting team.
Debbie Hobbs, head of sustainability at LGIM Real Assets, said: “In the current context of diminishing local government grants, striving to unlock greater social value from development is a very important consideration.
“Collaboration is key to realising this unique opportunity, and can be a prosperous route to making public sector budgets go further. It can allow those involved in development to make a greater contribution to the environments in which they operate.”
The report also sets up recommendations for the property industry, including developers, building managers and occupiers. It also states the BCO has an important role in facilitating the discussion between the planning community and its members, and should set up a social value task force to initiate discussions between all the relevant parties.
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