Shifting current practice to include reporting on societal value
- There is a need for a fresh impetus across the industry to create accepted methods to define societal value and to embed a wider understanding of societal value into the training qualifications of the industry’s professional bodies. Accountants and the RICS in particular, are well placed to use their considerable influence and expertise to accelerate the acceptance and use of societal value. They can do this by issuing guidance that societal value should feature as a standard chapter in every report that members of professional bodies produce. Commissioning new research, cross-discipline debates, and working with HM Treasury on new guidance would contribute to this aim.
- A review of the Green Book led by HM Treasury would enable the industry to revisit the advice on non-market valuation methods. The Green Book could add to the technical advice on how to monetise social and environmental change and suggest that all appraisals of proposals should include an attempt to report on societal value before committing funds to a policy, programme or project. An evaluation mechanism that confirms whether the value was actually created once the project is completed should also feature in this advice.
Improving techniques to understand how people feel about their surroundings
- Skills, training and qualifications could be developed for valuers, planners and designers to understand the experiences of stakeholders and what is important to communities so that an accurate assessment of the societal value of projects can be made. There are differing views on who should provide this training, but there is consensus that there is a need for a formal accredited programme which is accessible to all parts of the industry.
- Funding for continuing development of both financial and non-financial valuation methods for the property and development sector could be made available to higher education and research establishments.
- A review of how public consultation is carried out during the development process could result in a more effective partnership between communities and developers.
- The nature of information required by planning authorities could include a report on the existing socio-economic and social infrastructure of the receiving area, and an accurate and representative understanding of the community’s aspirations for themselves and their area.
What can be done by central government?
- A Green Paper on Societal Value and Development could be commissioned and published by the Ministry for Housing, Communities and Local Government. This could set out a new approach on how to establish the viability of development and regeneration projects, so they conform to the inclusive growth model. The Green Paper could also cover proposals on how to reform planning law and the Social Value Act to ensure societal value is incorporated into every planning proposal.
- Develop a common framework on how to forecast and evaluate societal value. Encourage or legislate for this to be an accepted industry practise in the way that BREEAM and LEED have been adopted for environmental performance.
- A programme to reform planning law (S106, best consideration etc.) and the Social Value Act could be tabled to ensure societal value is incorporated into the development process at the earliest opportunity. This includes a new interpretation of viability where both financial and societal value are considered in the determination of what is deemed a viable project.
- Develop a standard approach to forecasting potential and measuring actual societal value created by development. Consider how to introduce accountability and reward for investors for under and over performance in terms of the creation of societal value.
- Consider expanding the UK Guarantees Scheme and the Home Building Fund to include support for developers and social impact investors who are funding high societal value projects.
What can be done by developers and local authorities?
- Those involved in establishing development could ensure that they fully understand the need to maximise societal value in every project.
- All parties in the development process should carefully and meticulously align the community’s views with the aspirations and ambitions of other stakeholders.
- Work should be done in association with central government to explore ways of improving, standardising and mandating pre-application consultation regarding the integration of societal value. There are examples of this in design panel review processes and opportunity areas which could be encouraged to areas beyond London.
- Widely adopt the concept, language and ambition of good growth set out in the Draft London Plan across other areas in the UK.
- All parties to agree on the preparation of an inclusive design statement evidencing how proposals meet the needs of people with protected characteristics (including age, race, gender, disability, race, religion, pregnancy, etc.). The definition of protected characteristics should be extended to include people experiencing social and economic deprivation.