16 March 2021
Under Construction - Q2 2021 – 4 of 5 Insights
Publication of the Construction Playbook in December 2020 with its emphasis on increased collaboration between the public sector and the construction industry and the objective to embed social value in the procurement process is a sign of the direction of travel for the future. After all social factors are now starting to move up the ESG agenda and the focus on social value reflects the importance of this element. But in reality, it's the green agenda that is at the heart of the Construction Playbook.
Early on in the Construction Playbook we see the broad nature of social value. Social value is "a way of maximising the benefits of public procurement by encouraging employment opportunities, developing skills and improving environmental sustainability". This is backed up by new requirements to evaluate social value in all central government procurement and to apply a minimum social value weighting of 10%.
There are other examples in the Construction Playbook which impact on social value. For example, there is an increased recognition of SME engagement, voluntary and community sector organisations and social enterprises and the part they can play in improving opportunities. We are reminded that modern slavery should be eliminated from supply chains and that the safety of assets in operation, and not only in construction, should be taken into account in procurement choices.
The promise of profitable contracts for the industry rather than an emphasis on lowest cost should enable the industry to take a longer-term view of investment and innovation which is intended promote new skills – a key part in the Government's levelling up agenda.
Nevertheless, the Construction Playbook is really centred around how the government will work with construction to ensure that net zero greenhouse gas emissions are met by 2050. There are numerous references to achieving more sustainable outcomes "alongside the net zero commitment".
Contracting authorities need to produce plans to achieve net zero emissions by 2050 across their entire estate. Whole-life carbon assessments are encouraged and there is an emphasis on optimising long-term value and sustainable outcomes, reducing waste and minimising use of resources. When setting standards and specifications contracting authorities are to consider options that support the government's wider priorities which include achieving net zero by 2050. For tender evaluations, although cost remains important, quality will sometimes be weighted higher than cost if that means "meeting legal obligations such as net zero GHG emissions by 2050."
The green agenda is a key priority for government. The Energy White Paper, published alongside the Construction Playbook, suggest that decarbonising and improving energy performance in commercial and residential buildings alone would require £100 bn of investment in the 2020s. The Future Homes Standard and Future Buildings Standard (for non-domestic buildings) anticipate the move towards low-carbon heat technologies, such as hydrogen, heat pumps and heat networks through the uplift of Part L (energy) and Part F (ventilation) of the Building Regulations.
The Construction Playbook is designed to facilitate the emergence of new technologies through innovation for this green agenda. The focus of social value and in particular the minimum weighting of 10% of the total score for social value recognises that this element must not be dismissed. But while social value has clearly moved up the scale of importance the green agenda is the driving theme of the Construction Playbook.
To discuss the issues raised in this article in more detail, please reach out to a member of our Construction team.
by Rebecca May